Thursday 13 February 1992

Budget process

Canadian Tax Foundation

Douglas Sherbaniuk, director

Evert A. Lindquist


Chair / Président(e): Hanson, Ron (Lincoln ND)

Vice-Chair / Vice-Président(e): Sutherland, Kimble (Oxford ND)

Carr, Gary (Oakville South/-Sud PC)

Christopherson, David (Hamilton Centre ND)

Jamison, Norm (Norfolk ND)

Johnson, Paul R. (Prince Edward-Lennox-South Hastings/Prince Edward-Lennox-Hastings-Sud ND)

Kwinter, Monte (Wilson Heights L)

MacKinnon, Ellen (Lambton ND)

Mahoney, Steven W. (Mississauga West/-Ouest L)

Phillips, Gerry (Scarborough-Agincourt L)

Sterling, Norman W. (Carleton PC)

Ward, Brad (Brantford NDP)

Substitution(s) / Membre(s) remplaçant(s):

Fletcher, Derek (Guelph ND) for Mrs MacKinnon

Murdoch, Bill (Grey PC) for Mr Sterling

O'Neill, Yvonne (Ottawa-Rideau L) for Mr Mahoney

White, Drummond (Durham Centre ND) for Mr Christopherson

Clerk / Greffier: Decker, Todd

Staff / Personnel: Campbell, Elaine, Research Officer, Legislative Research Service

The committee met at 1009 in room 230.


The Chair: We will resume our meetings on the budget-making process, consultations and secrecy for the standing committee on finance and economic affairs. We will start off with a gentleman from the Canadian Tax Foundation. For the purposes of Hansard, would you mind identifying yourself, sir, and we have approximately one hour.

Mr Sherbaniuk: My name is Douglas Sherbaniuk and my position is that of director of the Canadian Tax Foundation. The foundation is a non-political, non-partisan, disinterested organization whose role is to keep the Canadian tax system under review, which we do through the commissioning of research projects, the organization of conferences literally from coast to coast and an extensive publications program that involves a bimonthly tax journal as well as conference reports, monographs and finance handbooks on revenues and expenditures for all three levels of government. Shall I proceed?

The Chair: Yes. I forgot to welcome you here this morning. I welcomed you earlier, but I would like to welcome you here also. You said to me earlier in a conversation that you did have a large, intensive brief I believe the research clerk has here. All of that will be gone through by the research clerk and will be put into the report. I think there were four areas you wanted to address to bring the members up to speed on them. Perhaps you would not mind going through those items and we will have the question period after.

Mr Sherbaniuk: At the outset let me reciprocate your welcome. I am very pleased to be here to address this committee on a subject that has been of continuing concern to the Canadian Tax Foundation over a period of about 15 years.

Let me refer to the published material to which you adverted in your initial remarks. Copies of those materials were provided to Mr Decker about two weeks ago. Copies doubtless can be made available to members of the committee to peruse at their convenience.

The first of the items we submitted was an article entitled "Budget Secrecy," which I wrote and which was published in the Canadian Tax Journal in 1976. The purpose of the article was to examine the significance of the convention of budget secrecy, which Canadian legislatures inherited from British parliamentary practice. At least at the time there was very little published material about the origins of the doctrine of budget secrecy, how it had evolved over the years and precisely how it applied in varying circumstances. We were able to extract from British documents two instances where budget secrecy led to the resignation in one case of a member of the British cabinet and on another occasion of the Chancellor of the Exchequer on what seemed to be relatively minor infractions of this so-called convention of budget secrecy.

In his budget speech of 1976 -- this will lead us to the second document, copies of which I have provided to you -- the Honourable Donald Macdonald devoted one page to expressing his dissatisfaction with the procedures that were pursued in preparing tax changes, and second, he was dissatisfied with the way those tax changes were dealt with by Parliament after they had been announced in a budget.

At the request of the Department of Finance, the Canadian Tax Foundation struck a committee to examine the tax legislative process. The committee met for almost a year and submitted its report in 1977, after Mr Macdonald had left office and had been replaced by the Honorable Jean Chrétien. The report did not evoke many changes in the federal tax legislative process, but that report, published in the Canadian Tax Journal in 1977, remains one of the most comprehensive reviews of the shortcomings of the then federal budgetary process.

Third, in 1982, after the much-maligned MacEachen budget of November 1981, the Department of Finance asked the Canadian Tax Foundation if we would prepare quickly a report on how the tax legislative process could be improved. A report was prepared in a month, and many of the recommendations in that report were adopted in a green paper issued by the Department of Finance under the name of the Honourable Allan MacEachen. In that green paper, as I say issued in April 1982, the framework for opening up the budget process, for constraining the importance of so-called budget secrecy, was all found in that green paper, which became, as I say, the framework for the current method for dealing with tax changes on the federal scene.

The next major event was a discussion paper that was tabled in May 1985 with the first budget of the Honourable Michael Wilson. That discussion paper noted a number of deficiencies in the federal tax legislative process and suggested a number of ways of remedying those deficiencies. The Canadian Tax Foundation struck another committee to review the discussion paper and prepare a report, which was published in the Canadian Tax Journal in 1985 and examines in some detail Mr Wilson's proposals in general and in particular the suggestion that there should be adopted a so-called provisional collection of taxes act, patterned on a similar statute that had been in force in the United Kingdom since about 1915.

That is the listing of the four documents, copies of which were provided to Mr Decker, the article on budget secrecy, the report prepared in 1977 and published in the Canadian Tax Journal, a report responding to the MacEachen budget difficulties in 1982 and a further committee report in 1985 responding to the proposals by the Honourable Michael Wilson.

There have been numerous changes in the tax legislative process at the federal level, and by reason of the green paper published in April 1982, the process is a far more open one. In particular, dealing first with the pre-budget period as distinguished from the time when a budget announces tax changes and they wend their way through the legislative mill, in the pre-budget period, whereas the prior practice had entailed the preparation of tax changes behind green-beige doors on Parliament Hill by a small group of officials, the practice now, since 1982, entails consultation on a fairly broad basis by Department of Finance officials.

In the case of major proposed tax changes, the practice now is, and certainly should continue to be, the issuance of a discussion paper, which may have different coloured covers depending on the significance of the proposals and the Department of Finance's seriousness about adopting them. A green paper, as you know, is simply a set of proposals published for debate with no necessary commitment by the government to adopt those proposals. A white paper, on the other hand, indicates some degree of commitment to the proposal discussed in the white paper. A brown paper, which is used relatively infrequently, really is nothing more than a report on some issue of public concern in the realm of fiscal policy.

As far as representation from the public is concerned, the problem was discerned to be the lack of opportunity of members of the public -- widely conceived, the man or woman in the street -- industry groups, members of Parliament, the provinces; none had the opportunity to be heard before the tax proposals were formulated and introduced as a fait accompli in a budget. The practice now at the federal level, and I believe increasingly at the provincial level, is to seek public consultation on tax changes through various ways.

For one thing, the department can invite persons who have an interest in the proposed tax to be heard. I will call this the private consultation. Industry groups may be invited to prepare a submission, even to contact finance officials and discuss the proposals. It is important that this be done in order that the ramifications of a proposal can better be appreciated by officials before these changes are introduced as a formal budget measure. It is beyond the wit, I think, of any group of bureaucrats, however skilled and experienced, to understand all the ramifications in an environment and with an economy as complex as that of Canada or Ontario. The ramifications of a proposed change are important to understand before the change is introduced.


Second, the design of the tax measures are almost bound to be better with the input of informed persons, usually tax professionals. There are many instances that could be cited where a measure had been introduced and adopted only later to be found to be unworkable. It then involves changes in those measures to make the provision administratively workable and possible for compliance by members of the public. Understanding ramifications of a change is important and understanding how best to design a tax measure so it works is likewise important.

Third, by extensive consultation there is a much better chance that the public, even though they may not like the tax measure, will be more prepared to accept it if they have had an opportunity to have some input into the formulation of those measures.

For all of those reasons, consultation on as wide a level as possible is to be applauded.

Consultation by invitation: Private discussions are certainly in order. The Department of Finance -- I believe it is increasing the practice in Ontario -- engages private consultants, that is, experts in a particular field. They may be from chartered accounting firms or law firms, they may be seconded in some cases to the Department of Finance for a period of a year, 18 months or two years to work on a particular project so that the ultimate product will be as satisfactory as possible. A case in point is the review of the interest deductibility rules the Department of Finance has been wrestling with since the Supreme Court of Canada decision in 1987, the Bronfman trust case; they had two experienced lawyers from the private sector for a period of 18 months or two years serving with the department to give the department the benefit of their expertise from the private sector and their expertise in doing financings. Hiring or engaging private consultants is certainly one way for consultation to achieve desirable results.

Another possibility -- these suggestions, I might add, are to be found in one or another of these documents to which I made reference at the beginning of my remarks -- is for the organization of an ad hoc committee whose members would be specialists in a particular area. For example, to take one illustration, if changes were to be made to the treatment of financial institutions, possibly life insurance companies or trust companies, brokerage firms or the petroleum industry, it would be helpful to have a committee of specialists not necessarily from the industries, although representatives from the industries might well be in order, but from accounting firms or law firms that have clients in the fields who are familiar with the rules, and maybe even members from the staff of the Department of Finance. Such a specialist group would be much better equipped than the man in the street or the woman in the street to give sound advice on that particular targeted area for review.

Neither of these suggestions, that is, hiring consultants from the private sector or striking an ad hoc committee on a particular narrow area where specialized knowledge is required, will suffice as far as permitting the man or the woman in the street to be heard. May I add one other possible type of committee that is referred to in one of these documents, that is, a standing committee or a permanent committee of tax advisers. The model might be the advisory committee that has been struck to provide advice to the Deputy Minister of National Revenue. The committee meets at the call of the chair and issues that confront the Department of National Revenue are put on the agenda which is prepared by the deputy minister. The members of the committee then provide their views to the deputy on these various issues.

There seems to be no reason why a comparable committee could not be struck at the provincial level to advise the Treasurer on issues he may have in mind, not necessarily for consideration at an early date but perhaps over a period of months or into another session. That would be as distinguished from the ad hoc committee struck for one purpose to deal with one issue and then disbanded. This other committee would be a standing committee to which the Treasurer or Deputy Treasurer could refer matters for input from outside government.

What about the man or woman in the street? They may have to be encouraged to come forward to present their views. They may be diffident about taking what may appear to them to be quite a major step in appearing before a committee such as this one to make their views known. Certainly one way for the public to be informed of what the Treasurer may have in mind, either for immediate consideration or for consideration at a later date, is a consultative document. It could take the form of one of these coloured papers I referred to earlier or it could be simply a press release of three or four pages if it is a narrow issue. In that way the bedrock rationale for budget secrecy I think is averted. The only rationale, or certainly the only significant rationale, for budget secrecy has to do with the opportunity for private gain from prior knowledge.

Apart from that consideration, this tradition of budget secrecy has taken on a significance that far exceeds the role it ought to play in any parliamentary democracy. We are all familiar with the events within the last decade or so, really trivial events that led to the call for the resignation of a Minister of Finance or a Treasurer. We all recall the event of the picking over of the garbage behind the printing house that was preparing the Treasurer's provincial budget back in the mid-1980s in Toronto. The hue and cry came up from the opposition that the minister should resign because a few pages were found in the trash.

You may also recall the episode involving the Honourable Marc Lalonde when a cameraman with a zoom lens was able to take a photograph of one page of the budget as he leafed through it. Again the call came up that he should resign, although there was nothing on that page that could possibly have been exploited for private gain. It is a knee-jerk type of reaction founded on this so-called invention of budget secrecy whose magnitude far exceeds the significance it ought to have.

One cannot argue, however, with the need for secrecy if prior knowledge of what is in the budget is likely to lead to private gain. A consultative document dissipates private knowledge of what may be on the Treasurer's agenda for some time in the future. If everyone knows, there is no opportunity for private knowledge to generate private gain. Hence the use of these consultative documents, as frequently as possible, as early as possible in advance of serious consideration of an issue, will provide the man or woman in the street with information that enables him or her to consider the measures and, if sufficiently interested, to have an opportunity to write a letter, submit a brief or, if invited to appear before this committee, to do so. That is one way for the ordinary citizen to be heard.

The other way is to have a parliamentary or legislative committee -- it may be this one, it may be a subcommittee of this committee -- whose role will be to address tax and fiscal issues. Since the 1982 green paper from the Department of Finance, as you know, the House of Commons standing committee on finance now holds public hearings. It invites briefs and it invites the members of the public, industry groups, the man or woman in the street to come and be heard. I am not aware of whether this committee holds public hearings so as to permit those who are sufficiently interested in an issue to present a brief to you and come and be heard or be invited to appear. I would be interested to know what the answer to that question is.


The Chair: Yes, we do.

Mr Sherbaniuk: They do?

The Chair: That is correct.

Mr Sherbaniuk: As a matter of course, are consultative documents in the realm of financial affairs referred to this committee automatically for consideration? Would proposed tax changes be automatically referred to the committee for consideration?

The Chair: Yes, they would be.

Mr Sherbaniuk: There is another means then by which the ordinary citizen has an opportunity to be heard. That is really all I have to say about the pre-budget consultation process. There are opportunities to sum up by which the treasury can invoke a range of outside assistance. By outside I mean outside the department of the treasury or outside government: from private consultants; from ad hoc committees; as far as the man or woman in the street is concerned, through the widespread use of consultative documents, and by having a legislative committee that will hear representations from the public.

Turning to the post-budget period, on the notice of ways and means motion or draft legislation or whatever form the tax changes may take, consultation again is very much to be desired. There has been literally a sea change in the decade of the 1980s in the way some legislatures in Canada, certainly the federal government, deal with the post-budget period. As you are aware, the budget addresses the major tax changes. The technical details often are contained only in supplementary accompanying documents.

The tax changes are referred, in the case of the federal government, to the House of Commons standing committee on finance which reviews either the notice of ways and means motion, which often takes the form of draft legislation or, if Parliament is not sitting, the tax changes may be issued simply as a press release. But they are structured in the form of legislative provisions. It was, through most of the 1980s, the so-called Blenkarn commission. Initially I think the members of that committee were tyros, initiates and novices in the realm of tax change and public finance. But one budget after another referred to this committee soon educated them in some of the ramifications of tax change. That is an essential element of having an effective standing committee to deal with tax matters.

It is as complicated a subject as is to be found in the statutes, federal or provincial, in this country; that is the tax laws. It is expecting rather much I think for an elected official appointed to the committee to be able to deal certainly initially with some of the technical details of those tax measures. One can take a leaf from the experience of United States committees, the Senate finance committee or the Rostenkowski committee in the House of Representatives, where the chairman certainly and members of the committee frequently serve for a period of many years. That experience should be emulated in this country, federally and provincially.

Draft legislation is frequently circulated through the summer months to enable the professions to study the technical details of the measures. They were invited to send briefs and submissions identifying the warts and carbuncles in the legislation so that it could be repaired before that draft legislation receives formal parliamentary attention. It is undoubtedly true that the quality of the legislation is enhanced by reason of this opportunity that is permitted the private sector, whether it is industry, charitable groups, if that happens to be an area that is affected, the professions, to make their representations so the finance officials can repair the bill before it proceeds to formal reading in the House.

I should add, when we are dealing with this post-budgetary period, that an enormous advance in the tax legislative process was the adoption by the Department of Finance of preparing explanatory notes with the draft legislation when it was made public. Indeed, in retrospect it is difficult to understand how the public in general and the professions in particular could have coped with the avalanche of tax changes that had been issued at the federal level through the decade of the 1980s. It is not an exception to have 100, 200 and 300 pages of tax changes issued each year. Without the explanatory notes which are keyed to each section of the tax changes, it is hard to appreciate how the professions could have coped with that mass of material.

I note that Ontario tax legislation likewise has at the beginning of the legislative provisions a summary of notes that is keyed to the sections. These are fairly brief, two and three lines, not full explanations as one finds in the federal bills, but certainly a good start for helping the public to understand what the technical changes in the legislation are intended to do.

If one were to examine some of the deficiencies in the tax legislative process today after all the changes we saw adopted in the 1980s, and they are myriad, I think one could note that the significance of budget secrecy is certainly much reduced from what it was before 1982. The kinds of consultations that take place now at the federal level and I believe at the provincial level are far greater than could have been tolerated prior to that watershed decision on the part of the Department of Finance and the green paper to open up the process.

There is one festering sore that remains both federally and provincially. It appears in representations to both levels of government and it has to do with the, in the view of many, unwarranted length of time that elapses before the announcement of a tax change, either in general form in a budget or in a draft notice of ways and means motion in a technical way, and the final passage of that change, federally or provincially, with royal assent forthcoming. In the case of the 1991 Ontario budget, tax changes were announced in April 1991 and those changes were not adopted until just before Christmas 1991. That is actually not bad when one looks at the record federally and provincially in previous years. Is eight months warranted to pass a relatively small packet of tax changes?

Mr Phillips: There are some that still have not been passed.

Mr Sherbaniuk: Still have not been passed?

Mr Phillips: Yes. The gas bills.

Mr Sherbaniuk: The significance of course is that commerce is often impeded, deals are not done, transactions are not consummated because frequently the significance of a tax change will make or break the deal. While these tax changes are outstanding, the parties to a contemplated transaction cannot be sure whether the change as announced will in fact be adopted, or whether some revised version will be introduced and adopted, or whether it will abandoned completely. Because of the significance of the tax impact on the transaction, deals frequently are put on hold.

Eight months, as I say, for these changes seemed an unwarranted length of time for legislative consideration. There are instances at the federal level where the changes have taken well over a year to be adopted. If one is to gauge the seriousness of that delay by the representations that are made certainly at the federal level -- I am not privy to what representations you have heard at the provincial level -- it is a cause of great concern on the part of the private sector.


The suggestion was made in the last report of the tax foundation's committee, the one that reported in 1985, that every effort should be made to introduce the technical legislation incorporating the budget announcements either at the time the budget is delivered or within a very short time thereafter, and that there should be every effort made to deal with that legislation expeditiously rather than leaving it over a period of several months or a year or more. Mr Wilson, in his discussion paper, was acutely aware of the deleterious effect those changes have on commerce. In his discussion paper of 1985, he proposed that there should be adopted in this country, at the federal level, a so-called provisional collection of taxes, which in effect would provide for a guillotine to be applied to the legislation introduced in a budget if it was not passed within a stipulated period. That is the rule in the United Kingdom and has been since about 1915. For whatever reason, the federal government chose not to proceed with the provisional collection of taxes act, and that deficiency that has long attended federal budget tax changes persists.

I have one final point to make on the concept of budget secrecy. I refer to that because in Mr Decker's letter that seemed to be the jugular this committee was going for at the request of the Treasurer. The Economist, the weekly news magazine from the United Kingdom, in the issue of June 28, 1982, dealt in a page with what they called the big myths of the budget secret. Many of the comments I have made to you today are adverted to in very summary form on this one page, but there is one paragraph in particular that I would bring to your attention.

One of the concerns that had been raised in the United Kingdom about abandoning the tradition of budget secrecy was that members of the public, if they were aware that the tax on alcohol or tobacco were to be increased, would immediately run out to the nearest store and stock up their larder with tobacco and their wine cellar with booze. That, to my mind, would have fallen under the rubric of private gain by advance knowledge. I put to you, for what it is worth, the views of the editors of the Economist who exploded this idea as having not very much merit.

I am aware of no empirical information in this country as to what the reaction of members of the public is when they expect a tax change affecting liquor or tobacco, whether they do run out and stock up large quantities or whether that is a highly inflated explanation of what in fact happens.

Let me read the words of the Economist:

"The second argument for secrecy is that if the public is told in advance that, for instance, alcohol taxes might be raised, they may try to beat the budget by stashing bottles away under the stairs. But people already build some pre-budget stocks because they expect indirect taxes to be adjusted annually, even if only to make up for inflation. The drink and tobacco lobbies all agree that publishing forecasts would make little difference to their business. Britain is the only country in Europe to make its indirect tax changes effective immediately they are proposed, and experience elsewhere suggests that this is not a major problem."

So even in cases where there may be a change in the tax Ontario were to levy on these commodities, it may not be a sin as far as budget secrecy is concerned to even make that kind of knowledge available.

The last point I make is connected with the length of delay in the passage of tax changes. The effective date of a tax measure varies as you read a tax bill. Very frequently the effective date is the date of the budget or the date of the announcement. Without getting into all the details of what is a complex issue, as described in that green paper of Mr MacEachen, serious consideration should be given to making tax changes generally effective as of the date of royal assent rather than making them retrospective in effect of a year or two before royal assent has been given. It is a complex issue, and I think it is beyond the scope of what I want to say today, but if the committee is going to address both the pre-budget period and the post-budget treatment of tax changes, I would respectfully request that the issue be addressed.

That concludes any prepared remarks I wish to make to the committee. I would be pleased to entertain any questions you may have.

The Chair: Sir, this is the first time you have been before the provincial government briefing us. Would you mind maybe for a minute or so just a little bit of background? Not that we doubt your credibility, but maybe some of the newer members here would like to hear your background in this particular area. We know your foundation, and if you could just do it in a minute --

Mr Sherbaniuk: You mean my own CV?

The Chair: Yes.

Mr Sherbaniuk: I am a graduate of the University of Alberta in honours modern languages in 1950, received a law degree from the University of Alberta in 1953, was admitted to the Alberta bar in 1954, did a year of post-graduate work at the University of Toronto in 1954 or 1955, joined the faculty of law at the University of Alberta in 1955, where I taught until 1960, when I went to Columbia University to earn a master of law degree, focusing particularly on the field of taxation. I resumed teaching in Alberta in 1961.

In May 1963, I joined the research staff of the Royal Commission on Taxation, the so-called Carter commission, became a member of the senior staff and was affiliated with the Carter commission until the release of the report in February 1967. I taught at Alberta until 1965, at which time the dean of the faculty of law at the University of Toronto invited me to join the faculty. I have been a professor of law at the U of T since 1965 and am still so today.

In 1967 I was appointed the director of the Canadian Tax Foundation and serve in that capacity still. I have served on a number of committees and commissions over the years, several Ontario committees and commissions, some involving the overhaul of your corporation laws in 1967 and a number of federal task forces. I have written and published fairly widely in the tax field. I am a member of the Canadian Institute of Chartered Accountants tax courses committee and a member of the Canadian Bar Association and CICA joint taxation committee that prepares briefs for the Minister of Finance and the Minister of National Revenue annually. I think that about covers it.

The Chair: It is quite a record there. We are going to go to Mr Kwinter to start off.


Mr Kwinter: Mr Sherbaniuk, I would like to get your reaction. I was very interested in what you had to say about the whole issue of budget secrecy and pre-budget consultation. We have had for a number of years a pre-budget consultation where people come in. They are either invited or they ask to appear before us. They usually come with their particular interests at heart, and they give a pitch as to why they should be given some kind of consideration in the budget.

I think that leads to a lot of frustration. For example, yesterday we had the Ontario Trucking Association. They come every year saying that the tax on diesel fuel should be reduced. Invariably the budget comes out and the tax goes up, so not only have they not had their request honoured, they have been given an additional burden. It seems to lead to the feeling that this is an absurd kind of situation. "Why do we bother? We go there, we tell them what we want. Nobody listens, and not only do they not listen but they then go out and add a tax to even compound our problem."

Because the budget is a political document, it would seem to me -- this is what I want to get your reaction to -- that if you really are going to have consultation on the budget and if you can do away with this budget secrecy, the initiative for the consultation should come from the Ministry of Treasury and Economics. They should lay out some of the areas that they are looking at to increase revenues or to reduce taxes and then call people in to discuss that with them to give them input as to whether they feel this is a good move or a bad move. Then, at least, you are dealing with something that has some semblance of reality as to what is going to happen. When you spend your time listening to people come in and they just initiate this on their own, most of it is irrelevant because it has nothing to do with what the Treasurer is going to do anyway. They are just coming and espousing their particular point of view. Do you have any reaction to that?

Mr Sherbaniuk: Yes. The assumption I was making throughout my remarks was that the treasury was in control of the budget, that it laid out the framework of what was of interest to the Treasurer in preparing his forthcoming budget, and that his consultations, whether they were done in a private way, that is, by talking to an interest group or to professionals who were knowledgeable about a particular issue, had to do with what was ultimately to appear in or might appear in the budget, not a scattergun discussion of everything in the realm of public finance.

When an ad hoc committee was appointed, it was because there was a particular industry or a particular issue. "Should we have a wealth tax?" might be suggested to a special committee, and that is because the Treasurer holds the reins and has the agenda for what he considers appropriate for that year's budget.

Similarly, it was my understanding that this committee would have referred to it items that were under consideration for possible adoption in the 1992 budget; that you would have referred to you the draft legislation for this year; that this was not just a sounding board for anybody who wished to talk about any aspect of the tax or expenditure system. I quite agree that may very well be a waste of your time. If it is not on the Treasurer's agenda for consideration for the immediate future, it seems to me that is not an appropriate role for this committee to play, to hear simply anyone from the street who has a complaint about the tax system.

Mr Carr: I have numerous questions. I enjoyed it very much, but as usual, I have to scale it back to whatever -- how much time do I have?

The Chair: We have about five minutes. One thing I want to note: The material that has been handed in is quite intensive, and I think you have to sit down for a few hours, but a lot of the information is in there.

Mr Carr: I want to go off on another topic along the same lines, something you did not touch on too much, and that is the Fair Tax Commission. In that regard, what the government has done has been very good. They are outlining very specifically. They have taken certain areas. They have, so-called, both sides of it, corporations. What has come out of it now, as I understand, is a lot of dissension about what needs to be done, and then presumably they will report to the Treasurer, who will then incorporate that into the budget. A very good process, I think, although a lot of people say that, with the date, it is nothing but a pre-election gimmick. I guess that will remain to be seen.

What is your feeling with regard to the process of the Fair Tax Commission? I even shudder to use the name Fair Tax Commission, because it may not result in that. How would you like to see that work, and specifically, what role could this committee play in that function? For example, last Tuesday night I went to a group, the Taxpayers Coalition, that wants to be involved in it and does not know how, and we are trying to get it involved. How do you see that working so that we can broaden this whole discussion of taxes in the various areas that they are looking at?

Mr Sherbaniuk: It is probably premature to pass any judgement on how the Fair Tax Commission procedure or process is going to work. I think it is certainly novel in the experience of this country to have a commission appointed, as the Fair Tax Commission has been, and then have, at the same time, working groups addressing a number of issues, and then have a number of consultants appointed to prepare studies and then, as I understand it, to have so-called town hall meetings. I am not sure whether those have actually come off or whether they are still at the incipient stage or are being planned. There will be a very interesting paper, I am sure, prepared after this is all over to see how this unique approach to a major review of a province's tax system actually works out.

I think many were surprised when they heard that there was a Fair Tax Commission that would report in three years, after the extensive review had been completed and, at the same time, that there would be working groups making reports to the Treasurer for possible adoption in budgets during that three-year period. What comes to mind is the problem that he would face if the Fair Tax Commission said, "We disagree with such and such a measure," only to find that it was adopted somewhere during the three years.

Also, I think there was certainly surprise at the size of the working committees. I am not sure there is a finite number for efficiency and effectiveness, but in counting the names of some of the committee lists, it seems to me that we were exceeding 20 or 25. I have not been present at any of the committee deliberations so I really cannot speak as to how those committees function, but there seems to be an impossibility for each member of that committee to have very many minutes on the agenda of a meeting to be heard without the process running on indefinitely.

I believe the first report of the working group is imminent, the one on the corporate minimum tax. I understand it is in the very final stages and may be tabled towards the end of this month. One does hear, because there are such different polar views on some of these issues, that consensus of such a group may be difficult to arrive at, and accordingly, I am not sure whether there will be dissenting views or whether it will be a very bland report, or just what the result will be.

Certainly from my point of view, it is premature for me to pass any kind of judgement on how effective this very unique process is going to be. I can speak of the process that was followed by the Carter commission, with which I was intimately acquainted. It worked extremely well. The interplay between the commissioners and the research staff, the studies that were done and how they were dealt with, the preparation of the report, I think was probably a model for the period 1967 and following. It may be that the Fair Tax Commission will set a new model. Again, I cannot really speak to that.

Mr Carr: Just on that point, I think it is right to regard -- time up?

The Chair: I have to say that if we give each one five minutes, and then there will be 55 minutes for --

Mr Carr: Okay, let them go on then. Thanks very much. I enjoyed it.


Mr Sutherland: Thank you for being here, Mr Sherbaniuk. Yesterday, we had a presentation from the C.D. Howe Institute about opening up the process. Their focus was a bit different in terms of commenting on the fiscal outlook, both that the Treasurer had released and that we released back in January.

I was wondering if you would care to comment on that. Some of the comments heard yesterday were that while it was initially a good start, they thought the information you were presenting for the public to see what options the government had should be consistent with the type of information that was going to be in the actual budget document. Rather than being as selective as maybe the Treasurer was, the budget information should be out beforehand.

I was wondering if you could comment on the suggestion about consistency and just make some general comments in terms of the concept of a fiscal outlook document like that, showing what the decisions and dilemmas facing the government are.

Mr Sherbaniuk: I would be very much in favour of as much openness and provision of information to the public as possible. Therefore I would favour the kinds of statements we heard by the Treasurer earlier this year. A similar event occurred, as you may recall, shortly after the new government took office at the federal level in 1984.

Mr Wilson, as one of his first steps, gave us a state of the nation address as far as the economy was concerned. I think that is very helpful. It gives the public some idea of where the government proposes to go, and the more detailed the Treasurer can be in his statement the better. He has both the spending side to consider and the tax side. If he can deal with taxes and spending roughly at the same time, then certainly ministers of the various departments will have a better idea of what the revenue side looks like and may be prepared to constrain some of the demands they are going to make on the expenditure side.

One of the alleged deficiencies of these early announcements of what government intends to do is that circumstances change and you raise expectations on the part of the public as to what is going to be done. To take a case in point, the revenues realized by the government this year are much below what had been anticipated a year or so ago. That point is referred to in this extract I read to you from the Economist. Their point is:

"The first argument for secrecy is that the fiscal position can change very quickly. For instance, government revenue from North Sea oil taxes can swing widely in response to shifts in oil prices."

I think their point was that the public should be prepared to expect, in an economy as complicated as ours, that times will change, that revenues may not be realized and that there must be a continuing consultation and dissemination of information to the public as these changes occur. It used to be that the budget was the great theatre for the year. Great expectations were built up; the nation focused on budget night and the minister had the nation in the palm of his hand. That day has gone. Take yesterday's developments, for instance, when the Minister of National Revenue announced that certain high-tech items were going to be brought in tax-free and that there would be an export tax, I think, of $8 on a carton of cigarettes leaving the country. That was not a budget and we have come to expect these announcements as circumstances dictate.

Accordingly, it seems to me, the argument that is raised here is that you raise public expectations. If Mr Laughren were to deliver a State of the Union message and said, "These are roughly the sorts of spending plans we have in mind; these are roughly the sorts of revenues we expect to have; circumstances change," it seems to me the appropriate step to take is then to go back to the public and explain that circumstances have changed and that these are now the new objectives of the government. My answer to your question is that I would favour those sorts of economic pronouncements in the course of a year.

The Chair: We have run out of time. Sir, I would like to thank you for appearing before this committee. Your wealth of knowledge and your past experiences that we heard have brought some answers to this committee.

Mr Sherbaniuk: It is my pleasure. If the Canadian Tax Foundation as an institution or I as an official of that institution can be of any assistance to this committee in any way at all, you have only to request. Thank you for the opportunity to be here.


The Chair: The next presenter is Professor Lindquist. Maybe you could start off in the same way with just a little bit about your background. This is the first time I am meeting you as Chairman and maybe it is for some of the other members here also.

Dr Lindquist: I am currently assistant professor of political science at the University of Toronto. My teaching specialties and areas of interest for research are public policy and public administration. In particular, I am interested in organization theory as it is applied to problems of public policy and public administration.

I attended Carleton University at the undergraduate level in the area of economic and political science. I attained an MA in economics from the University of Western Ontario and then I went to the University of California, Berkeley, to the graduate school of public policy to do my PhD. While at the school of public policy, I was commissioned by the Conference Board of Canada to produce a study entitled Consultation and Budget Secrecy, which looked at many of the problems with the federal budget process during the early 1980s. It was a comparative study. I looked at Australia, the United States and the United Kingdom as well as the province of Ontario.

Since that time I have continued with an interest in tax policy process matters. One of the chapters in my dissertation, which looked at the organization relevance of Canadian think tanks, used as a case study the tax policy process. I am quite familiar with the very good work of the Canadian Tax Foundation.

I should also note that there is a group of us in the department of political science at the University of Toronto who are quite interested in these kinds of matters. We set up a workshop on public administration and governance. We will be having representatives from the Fair Tax Commission come in to speak to us about how they are organizing themselves to conduct their affairs, and following that we will also have members of the budget secretariat of the Ministry of Treasury and Economics come in to speak to us about their first shot at a more open process.

I suppose my other qualification is that I assisted a small consulting team that helped the Ministry of Treasury and Economics to think about how to open up the process for the purposes of consultation.

First of all, I would like to thank you for your invitation to speak to this committee. My understanding is that the Treasurer has asked you to consider the following topics: what the modern consensus on budget secrecy ought to be; how legislators can be involved in a more meaningful way; in what ways the budget-making process can be made more open, more accessible and more meaningful to people outside the corridors of power.

On the first topic, I was aware that Professor Sherbaniuk would be speaking to you today and so what I want to do is to say as little as possible on the topic of budget secrecy. I have several reasons for this: In part I think that the conventions in Canada are quite clear on what constitutes a breach of budget secrecy, and even if you may want to codify some of those conventions it seems to me that there will still be great incentives on the part of members of the opposition as well as the media and various interest groups to claim that there has been a breach of budget secrecy.

I note, as probably Professor Sherbaniuk did, that in fact very few treasurers or ministers of finance have ever had to resign over breaches of secrecy. They have had to withstand controversy, storms in the media. My view on this is that kind of controversy just serves to take people's attention away from what is important about the budget or about the action that is causing the breach.

The worst transgression we have ever had in Canada that I felt was worthy of debate was the 1989 budget breach, the Doug Small affair at the federal level, and even then, as you know, the Minister of Finance did not resign. In my view it is very difficult to see how the Minister of Finance could have been responsible for someone who took the actions he did at the time. The only circumstances under which I can see a breach of budget secrecy to be very important is if insider information has been traded or if there are clear actions that have been taken by the Minister of Finance or by the Treasurer, or non-actions, that resulted in the breach of budget secrecy. But that rarely, rarely happens.

I do not want to say this is a non-issue but I think the conventions have served us well. It is not clear to me that this may be the most productive area for the committee to pursue.


What I want to spend most of my time discussing today is consultation. I want to begin by just noting that consultation is not only about government seeking advice; it is about individuals and groups outside government wanting to give advice. A third definition that is not ordinarily noted is that consultation can also be about the exchange of views. I think that is very much where we are going in this province. I would also like to point out that consultation does not necessarily mean generating consensus. I raise these definitional notes not because I am an academic, but because I think it suggests that the responsibility for good consultation does not just rest with the government; it rests with all actors who want to be part of the process.

In an earlier work I suggested that there were three kinds of consultation. The one that has dominated most budget consultations in this country today is what I have termed speculative consultation. It is the one with which you are most familiar. It is a closed process. The groups that are consulting with the Treasurer and the Minister of Finance have little to no information. They tend to meet with the minister one on one. Increasingly, these occasions are simply used as a photo opportunity for the press. The briefs of these groups consist largely of demands, usually a few solutions that involve a group's giving up things it no longer feels are necessary and, I might add, it involves a tremendous overload on the Treasurer or the Minister of Finance.

The other form of consultation is really reactive consultation -- here I have in mind the November 1981 budget -- where there is a decisive shift in policy. It takes groups by surprise. There could have been speculative consultation beforehand, but no one knew what was right around the corner. That kind of consultation is after-the-fact specialist pleading.

What I want to discuss today is what I call agenda consultation, which involves these discussion papers, which involves parameters that have been set out by the government before the consultation is undertaken. I think there have been tremendous strides in this area at both the federal and the provincial level here in Ontario, but it seems that it not really enough. Clearly the current government is interested in opening up the process.

I might also add that when you see people like Professor Sherbaniuk, as well as officials inside the Ministry of Treasury, as well as a variety of groups out there calling for more open processes, there seems to be somewhat of a consensus that simply producing discussion papers indicating that certain things are on the agenda and still using these traditional consultation processes are really not enough. What I as a person who has looked at the literature and followed some of these events over the years personally find interesting about this is that no one has really tried to change the consultation process.

This is new ground. It is exciting ground. If the committee wishes to make recommendations in this area it will not have too many other examples to fall back on, and Ontario could be seen as a leader.

What does a credible consultation process look like? This I think may address some of the questions you were raising earlier. I think a credible consultation process has to involve consultations that feed into the decision-making process of the government. Right now, and particularly this year, we have consultations under way where many of the insights are just going to come too late.

A credible consultation process should contain a fiscal framework set out by the government that recognizes the fiscal prerogatives of the government, but that framework must also anticipate contingencies. This is a point I want to make later; it is one that I do not think Mr Sherbaniuk made. I think we need to find a way to let people know, in the documents beforehand, that there is the preferred scenario and there could be a better scenario and there could be a worse scenario. Given our contingent world we all have to begin to think more along those lines, because if we consult following one scenario and things change, then that is all for naught. We may be in that situation right now.

We also need reliable data people can count on. Again this brings me back to the question of scenarios, but also various groups need data that is specific enough for them to be able to talk about the issues at hand in a meaningful way. It seems to me that some of the broad budget totals and forecasts may not really help good consultations.

Good consultation should also involve the affected line ministries. One worry I have here in Ontario is that right now there seems to be a centralization of -- there is an attempt to open up the process, and we can discuss that later. But this still involves a concentration of responsibility in the hands of the officials at the Ministry of Treasury and Economics, yet many of the decisions that are going to be made involve line departments and their constituencies, not the normal people who deal with Treasury and Economics. I think a good consultation process somehow has to bring those departments, as well as their constituencies, into the main.

Finally, I think a good consultation process needs to force outsiders to think about consensus and tradeoffs and also in terms of coming up with their own policy innovations to solve problems. It is not clear to me the current process is doing that all that well.

A good process also has to protect the Treasurer. I realize not all of you have a vested interest in that. But for any of you who know people who have been Treasurer, and I am thinking of ministers of finance as well, sometimes we expect too much of them. We expect them to endure all of the special pleading. It is not clear to me whether that is a productive use of that person's time, nor the time of his or her senior staff.

Very briefly, I would like to set out three different models you might want to think about in terms of the consultation process. All of them could use a more contingent way of thinking. Is the economy going to stay on the same trajectory? Is it going to lurch off in one direction or another? Is the deficit going to be up 10% or down 10%? That is contingent thinking.

The first model would be to retain the traditional petitions, either to the Treasurer or to this committee. The idea here is to see as many groups as possible, give them their day in the sun, allow them to present their brief and allow them to show their constituencies they matter and they have been heard. That really is the status quo, but I think by providing different kinds of information that process can be improved. The important thing is to get those groups to speak to the agenda the government is considering. I realize the agendas of the groups may conflict with that.

A second possibility is the current embryonic process that has been launched by the Ministry of Treasury and Economics. What they are trying to do is have several round tables -- I am sure you are familiar with this -- to bring in various stakeholders, so to speak, to collectively discuss certain issues in different areas. Again that could be done on a fairly contingent basis.


A third possibility would be one that is more elaborate. For people who doubt the possible effectiveness of the round table approach, I would urge them to reflect upon the current constitutional conferences and the very interesting dynamic that has been occurring. A lot of the experts, a lot of the people who were steeped in constitutional affairs, felt that those conferences could not be very effective. What I would suggest is you may want to consider a more elaborate conference approach where you get many more people in the room to discuss the issues of the day, rather than have these round tables that might involve no more than the number of people around this table in proceedings where the dialogue never really makes it out into the public domain.

I think people need to see that there are a lot of competing agendas, that there are serious constraints everyone is dealing with and that people can talk. The problem with the current process, in my view -- it is not clear to me the round table approach will necessarily solve this -- is it exacerbates our tendency to talk past one another. At this point in our economic cycle I do not know if that is the best thing to do.

What about the role for the standing committee? There is always a problem thinking about the role of committees like this in parliamentary systems. You are much more familiar with those problems than me. The simple reality is that standing committees in a parliamentary system are not transformative in nature. You cannot do too much with the legislation. There are always a few proposals out there to suggest that you get involved in a more meaningful review of tax legislation, that you hold more and more hearings. That is part of the Nixon paper and proposals. My response to that is, unless you have a lot of staff resources, how can you really change the agenda? How can you really analyse all that material well and make a distinctive contribution?

One possible role in a more open process is to really position the committee as a catalyst and as an agenda-setter, so that your role would be more as an instigator of certain themes that would be the focus of pre-budget consultations by various outside groups. You may even be able to set up an alternative agenda to that of the Treasurer. I also have in mind things like perhaps you could be the custodians of tax expenditure review and look at the tax system that way and perhaps shed light on some dubious tax policy.

I think I will leave it right there for now because I realize time is short. I urge you to think along those lines because I believe a more open process contains a lot of opportunities for the committee itself. It is not clear to me that the 1985 proposal, which was adopted here, which involves just having people again coming to the committee to present their views, is really fulfilling the potential of the committee. I urge you to think about the Blenkarn committee during the early years in Ottawa. I think it was enormously effective that way. You may not all have liked Don Blenkarn, but I think they really did open up the agenda in Ottawa.

Mr Carr: Thank you very much for participating. I have numerous questions. I want to start by getting your comment on a couple of areas. I agree we need more consultation, and you touched on the constitutional conferences. One of the good ideas that came out of that is with regard to the televising of those debates and really getting consensus. We are in a crisis right now economically that is going to drive the standard of living down if something is not done. Much similar to the constitutional crisis, we seem to wait until we hit a crisis before we do that. Along the lines of the discussion on the economy, as we are doing with the Constitution, in order to participate we have these great conferences and you get three lines or one little, tiny report that is filtered by the media in the newspaper. Do you think we could have some type of economic discussion similar to the constitutional committee that could be televised? Then the public could really try to understand the problems and hear all sides of it. They can make informed decisions about what they feel needs to be done. Do you think that would be something we could look at, or would all the time and effort be more than it was worth?

Dr Lindquist: That is a good question. I think there should be such an activity. As I noted earlier, one of the concerns I have about the round table process is that many of us have not heard too much about it. There could be some really wonderful, meaningful events occurring at those meetings, where people from all sides of issues really come together and determine what the priorities are. But that is sort of lost to the public. What they tend to see are the media bites being hurled back and forth by various groups. I really do not think that is constructive. I also think it continues to play into the view that if we keep on making our demands just for us, one day we will be served, and it does not matter what other people are dealing with.

I will tell you one reason I am very interested in this idea of having perhaps a larger event or two or three events, and I would not have said this three months ago. But when I look at the constitutional conferences I see they created a dynamic of their own, a dynamic that the organizers never anticipated. What that allows to happen is for Canadians to be quite reasonable, which I believe is the case. I believe that of Ontarians too. When confronted with the same information, when you sit across a table or in a hall with someone who is a welfare mother and you have a corporate lawyer there, I think they can begin to talk and decide what really is important. We need a lot more of that.

How can we set up a good process? I have not thought about that in great detail. I think we would need more than 20 people; we would probably need 100. We need to have a good mix of people from all walks of Ontario society, particularly from rural and urban Ontario. One criticism of the round table approach is that because it is trying to create an aura of intimacy it is an élitist process: You can only invite so many people to these round tables. A larger conference would have the salutary effect of bringing more people there.

Mr Carr: That is always difficult. People have said the way we did the Constitution before with the 10 premiers was really élitist. You are never going to be able to satisfy them. The reason I mentioned the TV aspect is because in speaking to people I was amazed at the number of people who actually watched. I know there is a lot of debate saying no, that should just be for Parliament. We should save the TV that is piped into virtually every home that has cable across the province for Parliament. I am also amazed by the number of people who actually watch that station and watch the debates. I have always thought it would be helpful along those lines.

I want to get specific now because this afternoon when we do our report I would like us all to start thinking about how we would make a recommendation to the Treasurer along those lines, because we are in an economic crisis.

With regard to the Fair Tax Commission, which again is a very good process, we are getting minds together and we are probably going to have minority reports. You may have heard some of the comments when you were here earlier from the previous person. It has been a fairly good cross-section. But again, that report will come out and I guarantee that the average person going to work will not know very much about the process. I spoke to people from the tax coalition the other night who you would think would know a lot about it. While they have heard of it, they really do not know the process. The government, in all fairness, has attempted to get it out, but it has not.

How do you see us publicizing that? Again, could any of those so-called experts be used in a televised event? Could it be those people who we look at, who talk and debate their two sides, now that they have had their go-rounds on, for example, the corporate side? Do you see any worthwhile point in doing that with those groups of people?


Dr Lindquist: It is not clear to me that having the proceedings of the Fair Tax Commission televised would necessarily be constructive, because there is a lot of arcane work that goes on. But at some point it would make sense to me to perhaps have a number of the proposals that the Fair Tax Commission is working with put out on the table and to have some kind of public forum to discuss this with many of the stakeholders that they have worked so hard to bring into the process.

One thing I am really concerned about in Ontario, but also in Canada, is the discipline of various groups and outsiders. What I can see happening is that even if we were all to agree that the Fair Tax Commission was a wonderful process that produced some well-thought-out ideas, that all the participants really had touched the various proposals and shaped them, there is a very real possibility that as soon as that thing hits the public, it is just going to be blown right out of the water, just like the Carter commission. Doug Sherbaniuk could have told you, and some of my colleagues at the University of Toronto who were involved in the Carter commission can tell you, about the pain and suffering that some of the researchers as well as the commissioners had to endure.

That kind of vicious debate seems to be one that is right around the corner. You just have to think about the current budget difficulties that the government finds itself in. I am not defending the government here. I am not interested in specific proposals. I am interested in the poor quality of the debate on all sides, and in the end I do not think taxpayers are being served well. We have to find ways to make sure that people out there on all sides can talk about these issues in a reasonable way so that citizens can have a bit more confidence in what our policymakers are doing.

Mr Carr: I agree with that. Unfortunately, the way it is now, without it being televised, what we get down to is 30-second clips. All sides use it and whoever can best get the one little bite gets on, and that is unfortunate.

Along the Fair Tax Commission idea, one of the proposals people have talked about is, as has happened in Nova Scotia, almost these open forums. Again, you always get special-interest groups that come to those, but the theory is that the average person can come out and have his say. I am thinking now of what happened with the New Directions consultation. I went to one the other night on our health care, and basically nobody was there to preach to them. They had an open forum and recorders who took some of the ideas back. Very constructive ideas came out.

How do you see that process working? Do you like what has happened in Nova Scotia with these open discussions, and how would you see that structured both on pre-budget and on what the Fair Tax Commission is talking about? Because, again, we are not talking about what you talked about earlier like the Constitution where they tried to get a consensus. It is just basically putting it out on the table. I guess Monte earlier said that sometimes that is not helpful because people go away frustrated. Do you think there is anyplace for the open forum, for the average person to come out and say his feelings with regard to the tax and the budget?

Dr Lindquist: I am not familiar with the Nova Scotia process, but I understand the point you are making. My sense of the constitutional conferences is that even though there is tremendous pressure to create consensus of some kind, what it is really doing is sort of narrowing the range of possibilities, and there are some general tradeoffs being made. I do not think most of those participants think that an agreement is going to come out of those conferences that gets handed to the government and then they will just sign on the dotted line with the provinces.

So too with budget consultations. I certainly would not advise the Treasurer or a committee to try to generate a consensus. I think the idea is to educate and to give citizens who want an opportunity to speak a chance to speak. That is fine. It is also for them to speak with other people and think about the implications of some of their arguments.

One big problem is that you can have a very open process but, let's face it, most of us do not think about writing to a commission and taking the time out to present to a forum. Most of the involvement of citizens in these kinds of processes is passive, but I think it is a very important form of participation.

TV is serving us well. I think a lot of people who watch the constitutional discussions now have a better idea of what the issues are. I think that will show up in the opinion polls down the road. They will be more receptive to certain ideas. I do not want to suggest that these consultations are instrumental in softening up the public. They do have a dynamic of their own, but I do not think we should necessarily see it as a way for the public to present all of their views. That just will not happen, and they certainly will not come to a consensus.

Mr Sutherland: You mentioned that you were part of a group of consultants that talked to the Ministry of Treasury and Economics about how they could open up. I was wondering, now that you have seen a first step, whether you could comment on what you think about the Ontario Fiscal Outlook document, where you think they should go next year in terms of doing this process, maybe a better sense of the time line they need to do this in advance of the budget, and then also maybe comment on the comments we heard yesterday from the C.D. Howe Institute about the consistency of information in a pre-budget document being somewhat inconsistent with what is actually in the budget itself.

Dr Lindquist: Since I am not really a professional economist, I am not in a position to evaluate the content of the fiscal outlook document. I leave that to the Tom Kieranses of the world.

In terms of the other very important parts of your question, I think that, first of all, information has to be available to people before these discussions take place. Second, the discussions have to take place early enough to feed into the deliberations of the Treasurer.

There is no doubt in my mind that this year consultations are taking place too late. The risk is that a positive step or a step with, in my view, the best of intentions would be looked at in a very cynical way. The big decisions about the budget will already have been made by the time most of those groups start talking to the Treasurer. Even if that is not true, it looks that way. There are certainly people in the ministry who are aware of that, and for a variety of reasons that process started late this year. I would urge the committee to suggest that these consultations take place in December and early January to feed into the runup to the budget.

The problem is that the earlier you start the consultations, the less likely any of those numbers in the document are going to be valid by the time you get to the discussions with the various stakeholders, and they most certainly will shift three or four months later when the budget has been presented. The concern of Professor Sherbaniuk and myself is simply what happens when you have consulted, based on certain assumptions, and those assumptions change dramatically. Whose fault is that and what does it mean to all the people who participated in, say, the round tables? Do you just throw that out the window? That is why I have been suggesting that there need to be some contingent figures in those documents, and I do not think they go far enough in doing that.

The other thing is that, although I did not mention this in my demiprepared remarks, it seems to me that the most fruitful discussions take place in various sectors. We could talk about health; we could talk about skills training development and so on. One way to make those consultations more meaningful is for the government to say, "Look, we have these parameters of the budget set out, but we have a pot of money over here we don't know what to do with and we want your input on what the priorities ought to be there." It could be $10 million if the $10 million could be found. Then the groups come to the table knowing they are involved in discussions on something that has not been sealed in stone. Those numbers could change, of course, depending on the fiscal situation, but I think more thought has to be given to it.


That creates other sets of problems, though, because the government has to have its act together. The government needs to have made some basic decisions about how large certain pots of money will be, and it needs to stick by those decisions and allow the process to work itself through. It is not clear to me that this would easy for a government to do, but it is only under those circumstances that I can see consultations being really meaningful. People need to see that there is something up for grabs. Interestingly enough, even though we do not like to see our governments being indecisive, people need to know that the government has not made up its mind in particular areas.

I find it hard to believe you can have those kinds of discussions on macroeconomic policy, because I think we expect our governments to have their minds more or less made up on basic expenditure and revenue targets.

Mr Sutherland: This committee did its pre-budget discussions on the so-called MUSH sector -- municipalities, universities, schools, hospitals -- a little differently than in other years. Rather than each organization that wanted to come in, we asked certain organizations to come in. They came to the table at once, and we set aside a little extra time. We allowed each of them time to make an individual presentation and then we questioned them as a group, having them here beside us and allowing them to comment with each other and respond to the other comments, somewhat in the hope that we would get some type of consensus. When we did that, we did not really, as I think you have suggested and maybe Professor Sherbaniuk also suggested, set any parameters. We did not ask them to respond to three or four specific questions in their brief. Is that the type of format you are suggesting for round table processes?

Dr Lindquist: I would suggest that format for any of the three paths I suggested, whether it is one-on-ones, a round table or more of a conference format. Consultations are useless otherwise. Certainly my own research indicated that the groups that get listened to the most are the ones with the best briefs, and the best briefs are usually produced by groups that have the most resources and are also usually from professions that are used to doing professional briefings, so that is very helpful to all concerned.

Even with those professional briefings, I might add, unless they are dealing with questions that really interest the government or the round table, it is just wasted effort for all concerned, except that the media gets another bite. So I would think it is a very good idea for the government to delineate what it wants to hear about and to be very clear that it has not mind up its mind on those issues, because I think people sense very quickly when something is a charade. Even if they do not sense it at the time, when dramatic decisions are made later that do not seem to be keeping with the spirit of the consultations, they are very cynical for the next round of consultations.

Mr Sutherland: So it has to be setting parameters with questions, but the questions are being presented more in an option type of form than a specific "This is what we're planning to do"? Tell us what you think.

Dr Lindquist: That would depend on how thoroughly the government has thought through that issue. Again, I would say that parameters should be set and that the government ought to feel it can live with various ideas, perhaps consensus, that would come out of these processes within those parameters. In a way we would almost be delegating some authority for policymaking there. I realize that may seem a little idealistic, but I have been asking myself what meaningful consultations would look like, and I know that in my dealings with various people I do not want to be consulted on things I cannot change.

The Chair: You have about two minutes. Mr Jamison.

Mr Jamison: My experience has been that if you carry on consultations and you do not listen to the particular group you are talking to, and this is a reality, obviously afterwards they say that the consultations were useless. Consultations are there to gather information. Some of the information we already have and some we do not, and that has to be weighed and factored in, so I do not necessarily agree that consultations are useless.

You run into the problem of a group or groups that come forward and put forward their impression of the way the world should be economically. You either agree with them or you do not, and if you do not, then the groups tend to go away and say that the consultation process was a sham. You are not going to get away from that unless you do everything that everyone wants you to do. So I have some difficulty with that particular statement.

Dr Lindquist: Let me think about how I want to respond to that. I agree with you that information can be mined from a series of one-on-one presentations or written briefings. I might say for a new government the first round of budget consultations is always very informative, but if you have been in power for two, three, or four years, you find yourself getting the same briefs. You hear the same things, and then it becomes increasingly a bit of a charade unless there are really different issues on the table.

Based on various interviews of officials I have conducted over the years, these same people would not say not to have the consultations, because there are some good things that come out of it. But what they are saying is that in 95% of the content of those consultations they could have told you what those groups would say before they walked through the door. Based on that, it does not seem to me that there is a lot of value added.

A lot of the groups feel good because they have produced a brief and they get some recognition for doing that. Maybe we just need to do it for symbolic purposes, I agree. But I am not saying that we dispense with it. My sense is that if the committee were to think about enhancing the round table process or perhaps going with a more elaborate process -- I am in no way suggesting that you dispense with the one-on-ones. You may have to retain that. You have to give individuals and groups their voice, but I just do not think that in the current fiscal environment that really helps policymakers deal with the problems at hand.

Mr Kwinter: Professor Lindquist, I was really interested in what you had to say because it reflects a lot of my feelings about this whole consultation process. I have been saying for a couple of years now I think these hearings are far too late to make any impact on the budget, and second, there is not really a mandate to give advice to the treasury people that is going to be meaningful.

What happens, as you say, is that people come forward and you can almost predict what they are going to say just by where they are coming from. It is useful certainly from their point of view, because they can tell their membership that they prepared this brief and they can circulate it to their members to say, "Here's a brief that we presented to the standing committee of finance and economic affairs at the Legislature." It gives them some credibility that they are out there working. They are doing their thing and they are making their voice heard, and whether it is being heard or not is irrelevant to them. They have done their job and they have satisfied their membership that they have done it.

You talk about these two agendas, and it would seem to me that the only way these consultations can really be meaningful is that there has to be initial input from the Ministry of Treasury and Economics as to what they would like to get some input on. They say, "Here are the issues that we think are kind of critical this year. You, as the standing committee, go out and get us some input from various people who are going to be impacted by this as to what we should do." It should be done early enough so that it can have some relevance, and it should be pointed enough that we get the right people who can respond to it.

I will give you an example. It is just a typical example, and every government has the same problem. Last year in the budget a gas-guzzler tax was imposed. Again, without being partisan, I think it was poorly conceived. It did not do what it was supposed to do, and the Treasurer had to retreat after he announced it because everybody was upset with it. Even his normal supporters were upset with it.

There was an issue that could have been resolved if someone had taken the time to say: "We're kicking around this idea of imposing a tax on cars that use a disproportionate amount of gasoline. What are the impacts of that going to be? Let's get the auto workers in. Let's get the car dealers in. Let's get some road associations in. Let's get all these people in and let's kick this thing around to see what it is that is going to be the result of us imposing that tax."

If they had had that kind of consultation, they would have heard all of the things they heard afterwards. They would have said: "Okay, now that we've heard all that, this is what we think is the way to do it that is going to cause the least dislocation for all of the parties concerned." Everybody would have felt they had some consultation. Maybe not everybody would have been satisfied, but they would have felt they had their position made known, the budget would have reflected that, and you would have had a decision that, as I say, would not have satisfied everybody but everybody would have felt at least they had a chance to have some input into the decision. I just bring it up because it is one that comes to mind.

But every budget -- and again, as I said, it has nothing to do with a particular government -- and every government brings out a measure that immediately draws a lot of flak because people say: "There was absolutely no input and they did not think the thing through. It sounded like a great idea from one perspective, but if they had taken a look at the other side it would have created some additional problems. Why was this not addressed?"

I think it really is a difficult situation. As you say, it may be idealistic. How do you get people who do not have political responsibility to craft a budget? How you do that I do not know. But I think the only way you can even begin to do it is to have more directed consultations, where you know exactly the areas that you want to get some input on, and also more timely consultations. Any response to that?

Dr Lindquist: Really just to add to your comments that my sense of many officials in the province, but also at the federal level, is that they are quite receptive to this line of thinking. Many of them are part of the new age of openness and so on. They are sick and tired of being told they are secretive and that they like to spring policy surprises on the public. But no one has told them how to go about consulting with the public. It is not a problem with just your committee. There are lots of officials in the Ministry of Treasury and Economics who would like to figure this one out.

The only advice I can give is, perhaps it is time to dare. It is time to try something out and see whether it works and make it very clear in your report that this is an experiment, and put "experiment" in block letters. "We're trying to deal with these problems. We're on new territory here. We're dissatisfied with the status quo. We're not quite sure what will work."

I think the public is more receptive to that willingness of policymakers to admit some vulnerability there. Perhaps we should just try another process to find out what works. I do not think the outcome can be worse than the example that you just mentioned or the November 1981 budget brought down by MacEachen at the federal level. We certainly want to avoid that at all costs.

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

The research clerk here has draft report summaries that she is going to hand out now, so if anybody over lunch has some extra time they can read them. Make sure you have them back here at 2 o'clock. We have only so many copies. This committee is adjourned until 2 o'clock sharp.

The committee recessed at 1155.


The committee resumed at 1431.

The Chair: The committee will start again with debate on the draft report preparation. We have a letter here from the Ontario Public School Boards' Association. There are some areas of their report which seem to be not too clear and I believe some mistakes on the short forms that have been used. If you could wind up maybe reporting on the letter, Anne, since you were here on the writing of the report, if there is a mistake compared to the final draft.

Ms Anderson: The Ontario Public School Boards' Association is correct. There is an error in the draft that went out. The error is in the attribution, as they say. In the first bit, in the quote that they give, the Ontario Public Trustees' Association should in fact be the Ontario Separate School Trustees' Association. The other inaccuracy they cite is also the Ontario Separate School Trustees' Association.

I apologize for the inconvenience this has caused. It came about from the summary of recommendations, which lists the recommendations the different groups give and gives an attribution to them. There was a wrong attribution in that because both the summary and the draft were done in fairly short deadlines and the error got repeated into the draft.

Mr Sutherland: The one thing I want to do is a little bit of follow-up with the public school boards. It is not so much in those areas, but the comment made in the second last paragraph.

The Chair: This is on page 3?

Mr Sutherland: This would be on page 3, I believe: "Clarification of the role of the standing committee as adviser to the Treasurer of Ontario." Also in the last paragraph: "As well, we would suggest that the `round table presentation format' should perhaps be reviewed."

It implies to me that they have some ideas as to how to do it differently, but they have not elaborated on it. If we are sending them any formal response to this letter saying that we have recognized that the attributions were not correct, I would also request that, since they are suggesting it be reviewed, we ask them that they send us what they think a better format would be.

The Chair: What about Mr Carr? Do you have any comments on this? Do you agree with Mr Sutherland's comments? If you have some ideas, send them along.

Mr Carr: Yes, I agree with Kimble.

The Chair: I will be talking to the clerk and we will send a letter off to them.

Now a little bit of direction from the committee members on these pre-budget consultations with our summary.

Mr Sutherland: I thought that this afternoon's discussion might focus on the issue about opening up the budget process. In terms of us getting a report to the Treasurer, I have had it indicated that they would like to have the report by March 1 in order to be able to put it into serious consideration for overall deliberations. Since this committee will not be meeting again before that, this implies to me that we need to have some type of format.

My suggestion would be that we have Elaine as researcher do the normal background stuff and do a summary of what we heard from the forecasters in terms of that as background, and that we then establish an appropriate date that each of the three parties submit our recommendations on what should be done in terms of fitting that into the time line of March 1 being an appropriate date to have this to the Treasurer.

The Chair: Would we not be getting back together one more time to go over the draft the researcher has given us?

Mr Sutherland: My sense would be that so far this committee does not have a mandate to meet again. But maybe a subcommittee meeting could be organized to do that between now and then. That would probably be appropriate just to go over some of it.

The Chair: Maybe we should ask the researcher what would be a time line for preparing this to give us a better indication of when we could meet before March 1.

Ms Campbell: I would like some clarification as to what is wanted in the report. Just a summary of what the forecasters presented to us or a bit of an overview of what the other presenters said to the committee?

Mr Sutherland: That could certainly be part of it, I think, if you wanted to highlight the issues that were raised, some type of summary like that. Then we could get together. I do not know about your schedule, Gary. If we could arrange for a subcommittee meeting some time on Monday, February 24, that day is good for me.

Mr Carr: It is for me.

Mr Sutherland: If it is good and if we get one of the Liberal representatives here, I know I am going to be here in town that day for sure. If we use that as a day to go over it, I guess that would give us a little over a week. I do not know if that is the most of amount of time but unfortunately --

Ms Campbell: I am sure it is more than --

Mr Sutherland: I am sure that all researchers are getting used to the fact that they never have enough time to write reports in the way they probably should be written. But if we set that as a date for going over that and if we also set that as the date that we should be able to have our individual reports ready, it would make it easier. Would that give enough time at least to put it together to get a copy to the Treasurer for the March 1 date?

Clerk of the Committee: Yes.

Mr Carr: I think that would be a good idea. As you know, we have already put a document together, New Directions: Blueprint for Economic Renewal, a lot of which the Treasurer has got and the Premier has got. That is the one that 11,000 people have called in for. I think that shows there are a lot of people out there who do want some discussions and some talks. If anybody wants copies I can get them to you. I have passed them out to some of the Liberals.

In terms of some of the things we would like discussed, that lays out everything right from training all the way through to the pre-budget, post-budget consultation. We can have ours pretty well ready any time. I am going to be in Toronto on the 24th anyway so I can meet --

Mr Sutherland: If we leave it for the Chair to call that meeting for that day or find a time along with the clerk and all the members, that would probably work out the best.

The Chair: Let's see if we can call it for 10 o'clock as it is right now so everybody can put it in their schedules.

Mr Sutherland: That will not be good for me.

The Chair: Let's talk about it now.

Mr Sutherland: Probably 12:30.

The Chair: Okay, perfect, 12:30. I guess Mr Kwinter would be --

Mr Sutherland: Mr Kwinter or Mr Phillips, as long as there is at least one representative from there at 12:30. If not, then it probably would have to be 3 o'clock for me.

The Chair: Looking at the groups that were presenters and just looking through here, since we do not have the Hansards -- I do not know whether you have the rough Hansards or not -- there might be some additions that want to be made. I see no reference at all to the group Project Economic Growth, which had a good presentation.


Mr Sutherland: It is noted here that Hansard was not ready when the report was prepared.

The Chair: Okay. There are areas that have to be looked at.

Mr Sutherland: Perhaps we will get them as well. Once we get a Liberal representative back, if that is satisfactory for that aspect in terms of having some more discussion on the opening up of the processes, I certainly think we should be able to do that this afternoon.

The Chair: Mr Phillips, at least two thirds of the parties here, the subcommittee, have agreed to meet again on February 24 at 12:30 with recommendations for the final draft. We just want to make sure that either you or Mr Kwinter could be available there that particular day.

Mr Phillips: I am pretty sure.

The Chair: The Treasurer is looking for it on March 1, so we are giving the research staff enough time.

Mr Sutherland: March 1 is Sunday, so March 2.

Mr Phillips: Yes.

The Chair: The other thing is that we could possibly get a rough copy of Hansard out to each of the subcommittee members so that they are able to make some notes for the 24th.

Mr White: I think it would be helpful if it could be sent to the other committee members as well.

The Chair: We can see that each member of the committee is mailed a copy.

Mr Phillips: I am sure that will be fine with one of us. You can count on one of us.

Mr Sutherland: Elaine will do a summary of what the forecasters told us and also highlight some of the issues of the presenters. Then each of us will come forward with our recommendations to add them to the report. Hopefully by that date we will just go over the background material if there is anything we notice that we want to change. Then it can be put together?

The Chair: Mr Sutherland wants to carry on with opening up the process. Do you want to make a statement?

Mr Sutherland: There is only one statement I want to make in terms of having some discussion this afternoon. I think we heard some good comments and some good suggestions. I do not know if we can place in stone what needs to be done; certainly anything to open it up.

The Nova Scotia approach is rather unique or novel in terms of ministers going out. I do not know whether it is any harder to do there than it is here, because they have less cabinet ministers and they have less people and places to get to. Even if we had the type of background document that all 130 members of the House could have so that they could go back and do something in their ridings to get some input on what people could do with the budget, that would certainly seem good. If we could get some type of handle on what the actual material is that they are taking out on their road show in Nova Scotia, that would be helpful.

It certainly seems something of that nature, either town hall or whatever, maybe in some senses the Ontario Fiscal Outlook in a revised form, either with more information added or specific things, would be the only document you might need to take out with you to do that. I think we heard from the C.D. Howe Institute that you should have evaluations of all the programs that are going on.

I think Ms Ip has given a lot of thought to it. I still see that document piling up very, very thick in terms of some of the things she was suggesting. But maybe you could have it so that you could review the programs from the previous year or new programs initiated from the previous year and have some type of evaluation based on that. Those are just a couple of thoughts. I would certainly be very interested in hearing what other members of the committee think.

Mr Phillips: I will make a few comments, one in a slightly partisan way. I think the Treasurer in his comments earlier said that more information has been released this year than ever before or that it is unprecedented. I look back over the stuff that has been released over the last three or four years and there is very little difference. I do not know where they got off on the "unprecedented release" of it.

On the secrecy stuff, my own instincts are that there is virtually nothing we need to worry about on secrecy, apart from the point at which the Treasurer begins to make decisions. Then it has to be secret because that becomes something people can profit from. But up to that point I do not think anyone would mind it being wide-open. In fact, it essentially is wide-open. I think everybody assumes any tax is possible for change and any program might be cut or increased. I happen to believe the reason for budget secrecy has more to do with treasurers not wanting to get into huge spats with the public, the opposition and their own caucuses, maybe their own caucuses first because if there is ever going to be a tax increase, the thought of that came out. I think budget secrecy has as much to do with that, at least more recently, than anything else for all treasurers.

I think the Treasurer wants some comments from us on opening the process up. I at least think virtually everything should be open, up until the point the Treasurer says, "All right, I appreciate the input. Now we are going to put our document together," and the process then has to close because the decisions are begun to be made. That would be one piece of advice I think we should pass on. The second one is, what is the process? There are three possible processes. Bureaucracy can drive the process, this legislative committee can drive the process or it can be driven by the government. The Nova Scotia model, I think, is a government one. If you are in government it is a neat one because my suspicion is in the Nova Scotia one there are not opposition members at those things.

Realistically, this committee has been pre-empted by the round tables, like the Ontario Federation of Labour. I must tell you that I am really offended by the letter they sent us saying, "We don't even want to come and talk to you." If you read the letter, I have been asked to let you know by the OFL -- Wilson did not even have the courtesy to send us a letter. It was from someone like the research director. There is nothing wrong with the research director, but "I have been asked to respond to you." In the OFL's mind this committee is irrelevant.

I think we have to make some determination on that. If you are the governing party, you might very well want to ignore the committee because it is easier to run your own process. That is what Nova Scotia has done. That is a big issue. I happen to think -- I am rambling here -- it is in vogue right now to not use the traditional political process. That is the Constitution now. I think the debate has gone out of the traditional political realm into these five constituency assemblies or whatever you want to call them.

My own instincts are that the committee should debate that. We can say, "All right, do your thing and this committee will essentially be irrelevant in the budget process," or we can say we may want to drive the process in future years. On secrecy, I think my recommendation and advice to the Treasurer would be that I see virtually nothing that needs to be kept secret. In fact, the Fair Tax Commission is already looking at every possible tax. The treasury board is looking at every possible expenditure. There is not much more that is not being looked at.

On the process, I think we are in danger of the legislative committee being irrelevant. If we follow the Nova Scotia one we become even more irrelevant. As an opposition politician, you can say: "Fine, then they can take all the blame too. We won't have to take any of that responsibility." I think we need to debate that. I am not sure we can do that all today. So I guess we want to talk about the secrecy stuff. That would be my own instincts on it.


Mr Carr: I talked to a couple of the NDP members before, and what I was going to throw out is the suggestion that has come forward regarding the Constitution committees. Some of you may know we had that here in Ontario. It took a couple of days. Each party took about 20 people in. It was very effective and got quite a bit of media attention.

I think we are in a crisis now in the economy. I think all sides are trying to be non-political. I would suggest that we think very seriously about it. I have said that the conference came off very well and seems like it was fairly easy to organize. I will probably be told it took eight months and millions of dollars to do it. I have no idea what the cost was or the amount of time. It was very effective because it was what was being done with the Constitution.

You had round table discussions, you had focus groups, you had facilitators just like we have seen on TV. I think we could do that. It would give the opposition parties a chance to come in with constructive ideas. Amazingly enough, I think over the last year as a result of the crisis we are coming closer together to a consensus. I think back to these hearings last year and see the different directions everybody was at. I think it would be very worthwhile to do that, again not knowing the cost involved in it because if it was expensive and took a long period of time -- my sense is that it did not take a long period of time to set up and that it was not that expensive. I may be wrong.

I would even suggest we should go so far as to televise it as the House of Commons has done with the federal Constitution. It would be a bold step. I think we all recognize there is a crisis as a result of the Premier's speech on the 21st; everybody out there knows that. That would be this committee's chance to say, "This is what we recommend to do."

I mentioned it just before lunch to the other group. I do not know where the government is from its standpoint. I think it would give them a chance to again say we are listening in a non-partisan manner, because we had equal representation. The Conservatives could pick 20 of the specialists who would come and talk, and the people who would come would be some of the ones whom we from our standpoint have been talking about as having some of the solutions, and the same from the NDP and the Liberal sides. We might be very surprised at the consensus we get.

I throw that out for people to talk about because I think somehow we need to get out to the public more. On the subject of the Fair Tax Commission, we had the chap come in there and with the resources is doing the best job he can to try to get that message out to the public. They have had some of the ads. They give you those brochures that tell about the process, all very well. They give you the steps, "This is what we're doing to communicate to the public."

The fact of the matter is I do not think it is their fault but I go out to the public and they do not know anything about it. They have heard about it but they do not know about all these processes. Even to the point I talked to my municipal politicians, saying: "You'd better be ready because property tax is going to be discussed on -- " I forget what the date is. "Think about what you would like to see." Every time we all talk to municipal politicians they say: "What are you going to do on our property tax? It's all your fault." They did not even know that there was a process that is part of the Fair Tax Commission. They heard about it. They are not preparing for it. At least Halton is not and Halton historically, not being prejudiced, has been fairly progressive in terms of planning.

Something like the Fair Tax Commission that we have attempted through the old means to try to get out the public, it just has not happened. What will happen is that when the report comes down and all hell breaks loose when the recommendations come to the Treasurer, as I understand they are, then people will say, "Oh, my goodness, what is this thing all about?" Maybe ultimately in the end the public is going to find out about it. That is why I suggest the television standpoint.

The Constitution one we had, if you remember, kicked off with the Premier speaking to opposition parties. It got a lot of press, a lot of media and gave everybody an opportunity to throw their ideas out. I say that for us all to take back and think about. I think it would be an excellent idea. I have not talked to anybody else in my caucus, although when you are in the opposition you do not need to because ultimately the final decision will not fall on us, but I throw it out as a practical solution that may be helpful.

The Chair: Just a comment from the Chairman here is that the point is: Has it ever been televised, just the procedure going on here at Queen's Park, or has it always been untelevised, so the people had no idea what we were even doing at this point?

Mr Carr: Yes, they do. They view the committees, for example --

The Chair: Yes. So this committee is --

Mr Carr: This one probably has not been on yet.

The Chair: It has never been on so they do not even know what we are doing at this point. You make some good points, Mr Carr.

Mr Sutherland: I think there is some potential to hear the work that someone suggested. For example, when I suggested Nova Scotia I did not mean necessarily following its exact model. For example, potentially if the fiscal outlook book came out some time before Christmas you could use that as a basis for province-wide hearings for this committee. In terms of this committee continuing to have a valuable role in terms of what people are saying, that would be a combination, because whatever is in the fiscal outlook the government is setting, but then it is still allowing all members in all parties to respond to the options that are put forward and to hear what people say.

There is potential there to mesh them and ensure that this committee still has a role. I know Mr Jamison had a question earlier this morning about the value of the information-gathering this committee has done in terms of its pre-budget hearings. I think there is a great deal of value. Being a new member, I think I have probably learned more in this committee than I may learn on any others just in terms of all the different groups and the different aspects you get. Potentially you could go out and do that if that document can be prepared much earlier out to the public, those who want to participate, and then we use that as the basis of the groups or individuals coming forward and responding to the issues outlined in a fiscal outlook-type document.

There certainly is room to get more input into the entire process. This time we are a little limited because our committee was not necessarily given the priority for committee hearings. In some ways that has been good too in terms of not sitting as many weeks as other times. The budget is, as people have said, probably the most important document that comes out each year on where this government is going. We could do something of that nature: have the fiscal outlook book out, I do not know, late in November or early December, give people time to look at it and think about it and then we could do two or three weeks around the province and people could come in and give their specific comments on that.

That would certainly help the Treasurer a great deal in terms of getting a much broader feedback on the specific document. I like the idea of round tables. I think there has been some good comment made in the last day or so that they need to have some focus rather than just individuals coming in and doing their type of thing. The fiscal outlook book could be the thing to give them that focus.

The Chair: The other thing is, I know Mr Phillips had stated that there is a lot of discussion in this particular area. We studied cross-border shopping; maybe when the House is sitting again this could be an issue we could be studying and bringing other expert witnesses in to assist us in this particular area.

I know there are some very good facts in, say, the Nova Scotia system and some European governments. The country of Denmark has certain ways it does things, Denmark having five million people -- we have 10 million people here in Ontario -- it would be just a little smaller than our province but yet it has certain ideas it can take a look at. They have a date that the budget has to come down on, different areas of this where that budget comes down so all the planning is done up to that date and every business and everybody knows that is when the new budget comes in.

As it is now, we have an idea approximately when the budget is coming in. So it will be a better planning process for business out there. I am just throwing that in since I do not see any more questions from the floor. Yes, Mr White. I am sorry.


Mr White: Just a couple of comments: I am struck by a couple of things in terms of the process the budget preparation goes through, and I think it is important for us to make some comments on that.

I am also a little mystified about the process we have been through. The groups that have presented have ranged widely in terms of their focus and the stakeholders involved. We have had a number of groups such as People Against the NDP Budget, the ABCs etc and specific interest groups that had some interest in funding issues. Then we have had more general discussion, such as this morning, which has spoken of a larger range. It is difficult for me to get a sense of the focus we as a committee are proceeding with. That is something we should be looking at.

I also agree wholeheartedly with Mr Carr that, despite the lack of focus of the proceedings we have been through, there has been through all that some really genuinely non-partisan creative thinking engendered. I was impressed, for example, by the women from Project Economic Growth, who came up with some very creative thinking in terms of how we address budgetary and financial issues, job creation and economic development issues. I was quite surprised by that and I hope we can have that kind of stimulating discussion again.

What I am concerned about here is that we should be looking also at our own process. The range of groups has been quite phenomenal, and somewhat dissonant, I suggest. We should be looking at who we are inviting, what our process is and how that fits with the entire budgetary process.

Mr Phillips: Just as a comment, I think there is some proof in the disjointedness. I think each of them served a purpose. We tried to do it all in two weeks. We have four big chunks we are dealing with. The economic outlook was what we dealt with in the first couple of days. Then we had a combination of the kinds of people who have a huge interest in the fiscal economic stuff, then a smattering of people who had a narrow interest. For me, at least, it was useful to hear from the children's aid society and the food banks, to put the human dimension on it. I think we would have been faulted if somebody had looked at our witness list and said, "Oh, these are just all the big, established groups." Then the latter ones are some suggestions on how we deal with tax.

We have been dealing with huge areas with relatively few witnesses. I personally do not mind the sampling of them and I think we can defend that against people who will say: "Why wasn't I invited? You heard from the children's aid society. We are just as important as they are." I think we can say we were hearing from a cross-section. We did not purport to hear from everybody. Now it is up to us to come to conclusions about how we see the economy, the fiscal situation and the process.

The Chair: I agree with what you are saying. We saw the Victorian Order of Nurses Home Sharing Program. They have a different perspective on how to save money, so actually when they are asking for money they are coming across the traditional way; this is a new way. People want to call them special interest groups. They do have a special interest. They have a special interest for our seniors out there. We have to listen to a lot of new ideas coming up and new ways to do things. This is how we wind up changing the direction of government, not following the old ways and the old steps because we did it that way last year. I think it is very important that members of the public are able to come forward with new ideas so that we are a progressive government, not an old-style government.


Mr Sutherland: There you go. You could certainly explore that idea. I have noticed one thing with the constitutional conferences, that as the conferences went on each conference became less and less an average-person conference. I do not know if anyone saw any highlights of the last one on the weekend, but boy, there were not a lot of what I would consider to be average-citizen people at the last one. There were a lot of important or allegedly important people, or certainly people who were very representative of organizations etc, or maybe that was just the press reports. There is no doubt there is a growing sense of some success. Ms Ip from the C. D. Howe Institute talked about the sense of developing a consensus of the parameters. "Now you go back and worry about how the specific details work out and having some input into that."

In terms of where we should go with this, I am not sure if we are going to come up with any specific details, but for the short term the best thing may be just to send a copy of the Hansard of some of the different ideas that have come out in the last day or two in our discussions for now, and then maybe when the House comes back we can give it some more focus as to what we would like for specific recommendations to pass back to the Treasurer.

The Chair: I have to say as Chair that I thought I was sitting at a round table. I stepped out of that Chair position. That is why I was commenting. We have this new process here.

Mr Phillips: When you referred to the Conservatives as old-style, I thought I had to defend them.

The Chair: Is there any more business to be dealt with here today? I guess it is the committee's desire to adjourn until the subcommittee meeting on February 24 at 12:30.

The committee adjourned at 1507.