Monday 17 January 1994

Underground economy


*Chair / Président: Johnson, Paul R. (Prince Edward-Lennox-South Hastings/

Prince Edward-Lennox-Hastings-Sud ND)

Vice-Chair / Vice-Président: Wiseman, Jim (Durham West/-Ouest ND)

*Caplan, Elinor (Oriole L)

*Carr, Gary (Oakville South/-Sud PC)

Cousens, W. Donald (Markham PC)

*Haslam, Karen (Perth ND)

*Jamison, Norm (Norfolk ND)

*Kwinter, Monte (Wilson Heights L)

*Lessard, Wayne (Windsor-Walkerville ND)

Mathyssen, Irene (Middlesex ND)

*Phillips, Gerry (Scarborough-Agincourt L)

*Sutherland, Kimble (Oxford ND)

*In attendance / présents

Substitutions present/ Membres remplaçants présents:

Jackson, Cameron (Burlington South/-Sud PC) for Mr Cousens

Clerk pro tem / Greffière par intérim: Bryce, Donna

Clerk / Greffière: Mellor, Lynn

Staff / Personnel: Campbell, Elaine, research officer, Legislative Research Service



The committee met at 1414 in the St Clair Room, Macdonald Block, Toronto.


The Chair (Mr Paul R. Johnson): The committee will come to order. The business of the day is dealing with the draft report on the underground economy, but I'd like to inform the members that there is a need for a subcommittee following this meeting today so we can address the issue of people who would like to be put on the list to make presentations during the pre-budget consultation process.

As I said, the draft report on the underground economy is our business of the day. I believe everyone has a copy; if not, please let the clerk know. I'm assuming that the members have had a chance to review the research officer's report. As indicated in that report, there is still some direction to be given on some aspects. The Chair is open to any comments at this time.

Mr Gerry Phillips (Scarborough-Agincourt): It's always difficult to write these things by committee. Maybe the easiest way is to go through it section by section.

On the introduction, I wouldn't mind a paragraph indicating that this wasn't meant to be the definitive study of the underground economy. People reading this may not realize we spent a total of five days on it, and I don't think we ever thought this was going to be the final study of it. I wouldn't mind a paragraph in here indicating that it should be recognized by the readers that this was an attempt by the committee to deal with a very complex matter and that it wasn't meant to be...etc. One paragraph I think would be helpful to all of us so that people don't think we spent millions of dollars on this report only to turn out a fairly small report. That would be my comment on the introduction.

Mrs Elinor Caplan (Oriole): I also think it would be a good idea if we could go through it section by section.

The one thing I didn't see -- and if it's here, please forgive me, because I only had a chance to very briefly review the report -- was the behavioural nature of the workings of the underground economy. Some presentations particularly talked about this, and we talked about it, as a symptom of unrest within society, whether it was the euphemism of "the taxpayer revolt" or people responding to governments they didn't like, that kind of thing. But it seemed to me that in explaining the concerns about the underground economy, the fact that you had people bragging about or openly admitting to this kind of behaviour was significant enough to be mentioned in the report, and I didn't see it here.

The Chair: Would the research officer like to make a comment?

Ms Elaine Campbell: I think there are a few references to it, but in not much more than a superficial way. But I could certainly add to that, especially under any social aspects related to the issue.

Mrs Caplan: Either under the social aspects or under "Reasons for Concern" at the beginning, because one of the things we were concerned about was the societal breakdown as people's behaviours and attitudes crossed the line from tax avoidance to tax evasion and outright flagrant participation in the underground economy. If we want to understand that as lawmakers and legislators, then I think it's important that we let people know we understand it in reports such as this.


Mrs Karen Haslam (Perth): I remember this being raised at one of the first meetings, but after that, every time I asked the question there weren't any answers. I remember time after time asking about the social aspects, and that was something I wanted to have answers to. I know it was raised once by Ms Caplan early on in the committee meetings, but in subsequent presentations I never found any answers. So I would be concerned that we were supplying answers that weren't supplied to us. I know there were some recommendations about writings that were available, and it would be an area I wouldn't mind exploring. I just have a concern that it didn't come from these meetings, because when we asked the questions nobody had the answers.

Ms Campbell: I think there was more in the briefs than I have summarized in here. I certainly wouldn't go beyond what appeared in the information presented to the committee.

Mr Gary Carr (Oakville South): I'm just going to echo what Gerry said, that the way we should proceed is to go through as was suggested. I'd have no problem supporting his comment about the report, saying that this isn't the final be-all. I think that's the way we should proceed.

The Chair: Indeed, Elaine Campbell has indicated that this isn't the final draft, and it will be revised. I just wondered if anyone had any general opening comments after having had a chance to review it. I think it's reasonable, and I was indeed planning, as I expect all members were, that we would go through it section by section to review or clarify anything.

Given that we are going to go through it page by page, we should probably start with the first page, the introduction. Recognizing that the table of contents is accurate, we should go to page 1 and start with the introduction. Does anyone have any comment on the introduction?

Mr Phillips: That's where I would have a paragraph, somewhere in there, indicating that the reader should recognize that this was a study done over a five-day period by the committee and that it wasn't intended to be the definitive study on the underground economy.

The Chair: Any further concerns to be raised with the introduction as it appears in this report?

Mr Monte Kwinter (Wilson Heights): I apologize for being late. I didn't hear the discussion that took place just before I got here.

When I read this, I got the feeling that it was really an overview of the problem without too much emphasis on solutions. I also found, and it didn't seem so at the time, that most of what we heard during our deliberations were definitions of the problem as seen by various people, and everybody had a different idea about it; from such things as even a definition of what the underground economy is, to the extent of it.

I think what should be coming out of this committee are some recommendations to the government about how it deals with this problem. It would seem to me that it would have been helpful had we had some definitive suggestions from people that we could then weigh and pick and choose what we thought were the most practical. It doesn't seem to do that, yet at the very end of the document it gives a list of some of the concerns and the corrective actions.

Who's going to determine what those corrective actions are? Is it just that each of us is going to say, "I think this is how we should do it"? What sort of validity will that have, with all due respect to all of us? I wonder whether that should somehow or other be reflected in the introduction, the problems we have with that particular issue.

The Chair: I hear what you're saying. It's true that many of the decisions that will be made under the heading "Corrective Actions" would obviously be political. We may not all agree on what we think should happen with regard to those.

I also think, though, as Ms Campbell has indicated on the front page, that this is a first draft and will be revised as directed. It was my understanding, as I believe was probably the understanding of everyone in the committee, that as we read through this brief, when you get to "Corrective Actions" there needs to be more said about that.

Obviously, as you read pages 18 and 19 of this report, it gives some headings that need more explanation or more direction. If indeed this report is to direct the present government with regard to the problem of the underground economy and how it can mitigate some of the problems, then certainly we have more to do in that regard.

Mr Carr: My suggestion would be that when we get down there -- and I think Elaine has done a good job of putting the headings together -- each of the three parties can put forward what its suggestions would be. If we have agreement, then away we go, and it goes in there. If we don't, we can decide what we want to do. That's how I think we should proceed: Just keep going through it, and when we hit those headings, each of the three parties can throw out their suggestions and we go from there. If we can come to a consensus, great.

The Chair: It seems like a reasonable way to go. I guess we should continue from the beginning, and eventually we'll get to the point when we will deal with the corrective actions that need to be taken.

The second page is "Definitions," and it's already been indicated by some of the members that this is a complicated thing to arrive at. Mr Phillips?

Mr Phillips: I always thought that the definition we were using of the "underground" economy was quite different from the "informal" economy. To me, the closest definition was the one the Ministry of Finance provided us, that that would be as close a definition of the underground economy as I could find. We heard a lot of comment throughout, and I think we should point it out in our report, that the informal economy also looks like it's growing quite dramatically and no doubt is having some impact that is as yet undefined, but for the purposes of our study, we were dealing with people who were not avoiding taxes but were evading taxes.

To get the debate going, that's what I would say we should be focusing on, a definition something like the one at the bottom of page 2. We should be pointing out that we seem to hear a lot of talk about a very quickly changing economy that's different from the economy we've seen in the past and that's where this informal economy comes in, but that the purpose of this study and our recommendations is to deal much more with the definition from the Ministry of Finance.

Mr Kimble Sutherland (Oxford): On that point, are you then suggesting a reorganization of how the points are presented from the different people on this page? Would you start with the Ministry of Finance and then add what the other definitions are?

Mr Phillips: Personally, I would. If I were writing it, I would say: "It was the intent of the committee to deal with the underground economy, which involves things such as tax evasion much more than tax avoidance. Therefore, while there is no perfect definition, the one that came closest to the committee's interpretation of the underground economy is the one the Ministry of Finance provided." Bang. That would be more at the top.

Mr Sutherland: And then you'd reference the other --

Mr Phillips: I would say that it's important to recognize that we seem to be facing a rapidly changing economy that may also be impacting on the way revenues come in, with what appears to be a growing informal economy, but that isn't what we decided we would investigate.

The Chair: Any further comments on the definition pages? If not, then we come to the heading "Size of the Underground Economy" on page 3, a pretty substantial part of the report, given the number of pages.

Mr Cameron Jackson (Burlington South): As one who didn't participate in the earlier committee hearings, it would appear that this section bases all of its details on estimates of how the ministry would calculate this phantom number. To what degree was there inquiry into the whole area of investigations and collectibles and what portion of a given investigation, that may have occurred either with legitimate businesses in terms of avoidance or with persons who are violating the law and are caught, and amounts seized etc -- was there a thorough examination of the known sources within the given ministry?


The Chair: It is regretful that you weren't here during that time, because I think when the ministry representatives were here giving their explanation of how they were trying to arrive at an unknown entity, that being the underground economy, I believe they -- some of the committee members may disagree, but it appears that the Ministry of Finance representatives looked at those things they would be responsible for in the real economy and tried to extrapolate from that how things they have no record of might have grown or might exist, that being the underground economy. It is a very difficult thing, as I'm sure you understand, to actually measure the underground economy.

Mr Jackson: Perhaps, Mr Chairman, I wasn't clear enough. I accept the report's conclusions, which you're now sharing with me. What I was asking -- for example, Harper's Wholesale, which is responsible for half the distribution of cigarettes in Ontario outside of major grocery stores, was recently investigated and audited by the ministry and it couldn't find a single penny -- the ministry's perception and belief was that Harper's was obviously doing something with its books, and it sent in teams of auditors and took up considerable weeks, almost months, of time. They found absolutely not a single penny out of order, but they were from that experience able to quantify how much volume was still occurring and therefore how much was being missed, through what was a rather good system of accountability by Harper's. The ministry ultimately acknowledged it; in fact, the ministry is on side working very closely with Harper's, as an example of cooperation.

But the experience, I am led to believe in talking to the principals, helped to quantify the amount of illegal activity. Parallel with this is cooperation with the RCMP to quantify where the surfacing of these cigarettes is, which is what we're talking about in this example. Harper's has given to me a substantive amount of information, just informing me as an MPP, and the principal owner of Harper's is a constituent of mine. My question really was, to what extent were all the known sources of investigation pulled together to help quantify the numbers, as opposed to what I'm reading here, which is -- and I don't mean this in a negative way -- a simplistic formulated methodology rather than a careful assessment of where all the elements of an underground economy surface?

The Chair: To be fair, the ministry representatives have made the presentation, and as I said earlier, it's unfortunate that you weren't here to hear what they had to say. However, you've mentioned Harper's and you've mentioned cigarettes, and that's one aspect of the underground economy. But if you look at the whole of the underground economy, there are many other factors that have to be taken into consideration, and once you examine as many aspects of the underground economy as you are aware of, then it becomes quite an undertaking. I would suggest that the Finance ministry has done absolutely the very best job it could in trying to determine what the underground economy is. Obviously, they don't know all the aspects of the underground economy, but certainly within the parameters of their knowledge of the economy and what they believe to be the underground economy, they've extrapolated and come to some conclusions.

Mr Sutherland: I don't know how long this audit of Harper's went on. It may be that the audit was in process at the time they made that presentation and hadn't concluded, and therefore they obviously would not want to comment about an ongoing audit on the specifics. If, from the information you're providing, that audit has been completed, maybe a request could be made to the ministry about whether it has updated information. On the cigarette issue alone, if they have updated information based on the significant audit of the company Mr Jackson referred to, maybe we could have that information forwarded to the committee.

Mr Phillips: In this section, I listened very carefully to everybody who presented, because this is the area I thought we might be the most helpful in, in trying to define the size of the problem. My clear recollection from the presenters was that we could draw two conclusions.

The first is that the underground economy is growing, and probably growing significantly. Virtually every presenter -- and by the way, we heard from a lot of the thoughtful people in the area, the economists and professors who've spent a lot of time on it. Second, the number that seemed to be the most conservative number was around 7.5% of the gross domestic product. We heard some others ranging way up there, but as I listened to the presenters who seemed to be looking at it in the most comprehensive way -- and we could almost list the 20 people who gave us the estimated percentage of the GDP -- I formed an opinion, maybe not based on a detailed analysis, that conservatively, we're talking about 7% or 7.5% of the gross domestic product in the underground economy, but, as I say, some estimates range higher than that. So if I were writing this, I would say that clearly, almost by definition, this is difficult to get our hands on.

By the way, the Ministry of Finance officials were going to attempt to get back to us with a number, if you remember. I don't think they ever did, or did they?

Ms Campbell: I had a conversation with a ministry staff person a few weeks ago. They were going to have something ready to give to the committee within the following two weeks, a response to the question you asked during their presentation.

Mr Phillips: I think it would be helpful if we had that. But if I were writing it, I'd say we've had many estimates of the size of it etc, and exhibit 1 shows the various people who presented and the range of estimates. The thing we can conclude is that all the presenters believe it is growing, and most believe it's growing significantly, and that we are talking about a sizeable problem, ranging from 5% to 22%, but in my opinion it would be in at least the 7.5% range. If that is the case, then the revenue losses for the province are in the $3-billion to $4-billion range, I believe.

Mr Carr: We've got the figures and the percentages, and what I suggest I would like to see in here is the bottom-line total it's costing the province. Mr Brandt and the tobacco people were in, and I believe -- Elaine, correct me if I'm wrong -- we probably have a pretty good indication, knowing the percentage of GDP and so on, what the revenue losses are, bottom-line. I think it would be very helpful if we put it in there, even if we are, as Gerry said, being conservative. That is an excellent idea, that we say we believe the provincial government is losing x amount as a result of this.

I think it can be done. I don't know what the figure is now, but I would look for some guidance from our legislative research to do that. I think that would have a big impact, primarily because when it comes to the average citizen, when you talk about percentage of gross domestic product and so on, their eyes glaze over. If you can tell them that the underground economy is costing the provincial government however many billion dollars it is, I think it would be very helpful. That would be my suggestion, that we put in there, "It's the committee's belief that the Ontario government is losing x amount of tax revenue as a result of the underground economy." I don't know what the other parties feel, but I think it could and should be done.


Mr Kwinter: Page 6 talks about the estimates of the size of the underground economy, the fact that professors Mirus and Smith, in collaboration with Professor Karoleff, updated their figures to 1990 and arrived at the range as being from 15% to 20%. Then we go on to say, "The results were said to be consistent with other studies."

I was listening to the radio last week. Unfortunately, I just got the tail end of it, but I got the impression that Mirus and Smith have now updated their figures, and the figure I heard was 26%. If all their studies were only up to 1990, at which point they said it's between 15% and 20%, when you consider that what we have heard is that one of the great initiators of the underground economy is the GST, which didn't come into effect until January 1991, there is a very good possibility that this 26% figure is closer to being correct. If that is the case, that's a very significant number.

To go on to page 11, and I know I'm jumping ahead a little bit, under "Reasons for Concern," you say, "When Canada's underground economy is put in an international context, it is not that large." I don't think that has any relevance. The relevance is what is it to the Canadian economy. I don't care if 90% of Thailand's economy is underground. The idea is that in Canada, if our underground economy represents 26% or a number of that magnitude, that is a huge cost to the taxpayers and to governments.

I think it's important that we come up with a figure that has some kind of relevance. To be using figures that are three or four years old doesn't do anybody any good. I think one of the major responsibilities of this committee is to use the best information available, to at least try to quantify the size of the problem, and I don't think we've quite done that by just putting down the range of views. I think we have to come to a determination about who has the best handle on this issue and what is a realistic size. I think that's one of the major things our colleagues will want to know: How big is this problem and of what magnitude should the response be based on the size of that problem?

The Chair: I was wondering, as I've listened to comments being made, whether it would be worthwhile to include in this report a graph to indicate the magnitude and how it has grown so dramatically over the last, say, five years -- we could even go to 10 years, but certainly in the last five years -- as many of the people have reported the changes they believe they've observed over the last little while. Would that not be worthwhile for someone who wanted to get a very quick view?

Mr Sutherland: Mr Phillips's suggestion was to put in an exhibit or chart indicating the presenters who came forward and what they estimated the range was, and we might even want to add what year their study was done to give people some handle on that as well.

The Chair: But as Mr Kwinter said, and I've heard these things too, the reports are that it's grown even recently, that even since we did our first hearings on this, there's been significant growth.

Mr Sutherland: But that's the whole problem, and we're all recognizing it. The main point that needs to be made is that we can't put a handle on it. I would accept the fact that yes, it is growing, but to try to estimate what that is without any updated information -- maybe we can contact Professor Smith and get an update and see what he has to say.

Mr Kwinter: I was going to make that suggestion. As there was a report in the media -- I didn't see it in the print media but I heard it on the radio -- maybe it would be worthwhile to contact Professor Smith and ask him if he has come out with an updated report.

Ms Campbell: I was given a copy of a newspaper article that appeared just prior to Christmas. They were quoting Professor Smith in there and making reference to projects that he had done with Messrs Mirus and Karoleff, and I was left with the impression that it was the report that was released in August of last year at a European conference on the underground economy. I think the figures that appear in that form the basis of their 1990 report. I could confirm that information with Professor Smith's office in Edmonton, but my suspicion is that the figures that were being cited were those contained within the report released in August, which would be based on figures from a few years ago.

Mr Sutherland: It's worth checking, anyway.

The Chair: If the research officer would care to look into that, we would appreciate it.

Mr Carr: One quick, small point: When we're doing this and we do the percentage of the GDP, I think it would be helpful if we include what Ontario's is so that again we come into hard numbers. If Elaine can make a note to do that, I think it would be helpful.

Mr Sutherland: When we talk about percentages, while there did seem to be some consensus, I was struck by Professor Vaillancourt's comment that we need to keep this in perspective. Obviously, in certain areas it's very large -- tobacco, alcohol, possibly even home renovations -- but you have to take that out and say, "What percentage of the overall economy is that?" and keep that in perspective in terms of balance. I just want to ensure, and I think that's reflected here in the comments, that we keep that in mind. I guess it reflects the problem that we had a lot of experts in, and even they were having a difficult time getting a clear handle or a sense of where it was. I think most of the presenters indicated that there are a lot of variables associated even with the models they were putting forward, which means it could be worse or it could be better.

The Chair: Any further comments on the topic, the size of the underground economy?

Mr Sutherland: Yes. Under the construction sector, there's reference made to the Ontario Home Builders' Association. I wasn't here for the presentation, but I did read through it. I don't know whether it has to go in the actual report -- maybe as a footnote somewhere -- but some details about their survey. When I read through their presentation, if I remember correctly, it said they mailed out questionnaires and received back a very small number. Given the number of members and the very small number received back, I didn't think it gave us very accurate information, so I would like at least some reference to how their survey was done. Whether that's done simply in a footnote so that people can see that -- if I look at those numbers, they seem very high. I'm not an expert on survey methodology, but it didn't seem it was the most complete or accurate process for surveying.

The Chair: I have a question for the research officer. Ms Campbell, I noticed that footnote on page 9 about the LCBO and the report about bottles seized. There was a recent communication, I believe, from Mr Brandt. That's what that refers to? Okay, that answers my question.

The next heading is "Reasons for Concern."

Mr Phillips: This is another place, Mr Chair, where it would be useful to have some estimate of the size of the revenue losses as a result of the underground economy. I'm repeating myself a little in what I said earlier, but when we discussed graph 1 with the ministry officials, they indicated they would try to get us the numbers.

In terms of the 10% drop, I think we all know the old nominal thing was that you get 90% of nominal GDP revenue coming in, and we saw nominal GDP steady for about three years but tax revenue dropped 10%. So there's the potential for a $2-billion to $3-billion number in there as a result of something happening, and that's where, if we can get the ministry officials' estimate, I think that should be an important part of it.

I agree with Mr Carr that people's eyes just glaze over unless you say: "Listen, you pay another $500 or $1,000 a year in taxes to make up for what somebody else is not paying. If you get a $4-billion revenue shortfall as a result of that, it's about $500 or $600 a taxpayer that somebody else is making up."


Mr Carr: To follow up on what Gerry said, I think that's one of the problems we've got with the whole issue: A lot of people think it's okay to do it so they turn a blind eye; they know somebody's who's got renovations or whatever. I don't know how much impact our reports can have on the public, but if the public realized what Gerry said, that when this happens it means you pay more, I think it would be very helpful. One of the things I think we can do with this report is to help highlight the issues, and I would just encourage that we do it and be very specific in what we're laying out.

The Chair: So under the "Social" part of "Reasons for Concern," there should be a further explanation of what some of the social implications are. I believe that's what I heard.

Mr Phillips: I meant that when we talk about the economy, what is a reasonable expectation of lost revenue as a result of the underground economy, and therefore --

The Chair: What does that mean for an individual?

Mr Phillips: Yes.

Mr Sutherland: On "Reasons for Concern," in some ways we've made reference to it where it mentions health risks of illegal alcohol, but maybe lack of warranties and those normal consumer protection things should be highlighted a bit more, maybe in a separate paragraph.

Mrs Haslam: Following up on that and on what Mr Phillips said and going back to what Mrs Caplan said, in the same vein, when you talk about seeing it as a health issue, perhaps we should draw attention to another area and talk a little more about the social aspects and how programs are hurt to a great extent. If we're going to get this information out, then let's have that in the report, that programs like health care and education and post-secondary education and other programs we have are in jeopardy because of the lack of revenue because of the tax falling off on some products. Somewhere within the social aspect I'd like to see some mention of the hurt it's going to cause certain of the government programs if the revenues are not there, and those are health issues and education issues.

Mr Carr: I'm going to throw this out for people like Mr Cleary and so on with the situation in Cornwall, because it wasn't included. I don't know whether the committee feels there should be any specific recommendations in light of the problems there. I just throw it out because if we want to do that, this would seem to be the place to do it, as we are talking a bit about crime; if there are any recommendations, this would be the place. I don't know whether they just want to reinforce some of the government initiatives by putting it in here. I wanted to make note of that in case anybody had any thoughts on it.

Mr Sutherland: Issues of public safety obviously affect Cornwall, as they do other areas. The one area we don't have any comments on is what existing enforcement mechanisms are. I don't know whether reference to that fits under any of the headings we've developed so far. Most of this was trying to identify the problem, but maybe we should have a separate heading somewhere in the report. We talk about enforcement compliance as part of the corrective actions, and maybe we should highlight somewhere what the existing enforcement is.

Ms Campbell: That was actually a question I asked in the body of the paper.

Mr Sutherland: Okay, sorry.

Ms Campbell: It concerned the updates that were provided by Ministry of Finance personnel as well as people from the LCBO and the OPP: Did the committee want to include the initiatives that were described to the committee during the hearings inserted in the report?

Mr Sutherland: I think it would be positive, again for people looking at it, that there are some things being attempted right now. They should be highlighted, and if people think there should be more, then in the recommendations they should be put forward. Somewhere in the report and I'm not sure under which of the headings it would go, I think some of that would be helpful.

The Chair: Any further comments on "Reasons for Concern?" I know we're looking at all aspects of the underground economy, and cigarettes and alcohol were two aspects that were raised and certainly are of a lot of interest because of all the associated problems with those two commodities.

One thing that wasn't raised in "Reasons for Concern," and I don't know how relevant it is or if this is the place to raise it, is the fact that particularly with cigarettes, and I guess this is applicable to alcohol as well, there has always been the issue that taxes collected on that particular commodity are collected to help pay for the health care of the people who smoke. That's a very general comment. Maybe Ms Caplan, who was previously the Minister of Health, would have a comment on how taxes collected on cigarettes in particular go into general revenues and help pay for increasing health care costs for those people who are afflicted with diseases as a result of having smoked.

Mrs Caplan: I'd be happy to make a comment. In fact, there are no designated revenues. I think it would be unfair to let anybody assume that taxes raised from cigarettes are directed to pay for cancer-causing illnesses. That's not really what happens.

Where tobacco taxes have been effective was presented I think particularly well here at this committee by the Addiction Research Foundation, which presented all kinds of evidence that said that taxation policies have done more in the prevention of smoking and therefore the lowering of costs. That's where taxation policies have been more effective in the relationship between tobacco and health.

The reality is that you couldn't put enough taxes on tobacco to pay for the devastating effect on the health of the individual, as cancer, heart disease, emphysema, respiratory problems and so forth have a huge cost to society and we know that there's a direct link to tobacco use. While we might like to justify tobacco taxes on the basis of increased health expenditure, the reality is that today we're spending $17 billion on delivery of health care services in the province, and in my view, as a former Health minister but also as a legislator, our best defence against future rising costs is to do what we can from a public policy point of view to encourage people to not smoke, to not start or, if you do smoke, to quit smoking. The use of taxation policy is just one tool to see how you can accomplish that. I think we would be misguided if we just assumed that we could raise enough revenue to pay for the damage that tobacco does to the health of the individual. I don't know if that's quite the answer you expected, Mr Chairman, but I think it's a reasonable and realistic answer.

The Chair: That's very good. I'd just note that recently in the media, I'm sure we've all heard the reports about Quebec lobbying the federal government to reduce significantly the taxes on tobacco. I don't know whether that's worthwhile, but certainly that's going to put pressure on the province of Ontario as it applies taxes on its tobacco here.


Mrs Caplan: Just as a further comment to that, again I refer to the brief from the Addiction Research Foundation. I think the evidence that they present as to the impact of taxation is very important, and I hope the province of Quebec would have a chance to review the material from the Addiction Research Foundation, which is considered a national resource.

The point the Addiction Research Foundation made was that while it might appear easy as a solution to reduce overall taxes, the solution it recommended was looking at the excise tax, because it was the differential, the cost of export cigarettes that were being smuggled back into the country, that was a significant part of the problem. The other was to encourage the United States actually to look at a healthier public policy by increasing their tobacco taxes so that the profit in smuggling would be reduced.

While I understand those who would argue that smuggling and the effects of tobacco sales on the underground economy are easily fixed by adjusting the taxes, my concern is that that's a very simplistic response and that in fact that's a symptom of a much greater problem which we were discussing here at the committee for a few days. I would hope that we could solve the smuggling problem and that it would take the cooperation of both levels of government to be able to do that.

One of the concerns I've had is that the provincial government recently has just been doing finger-pointing and saying, "We can't do anything without the federal government" or "It's the federal government's problem." In fact, I think it's everybody's problem. It's not just a question of collecting additional revenues; it really is the behaviours that people are engaging in which are so destructive in our society. The concern that I have about tobacco use in general is that we've been very successful in Canada -- and I'm now talking about Canada, not just Ontario -- in having the trend in the right direction, which is through policies at different levels of government and governments across this country. Canada now is the leader in the world in seeing a decline in smoking.

If we were to do anything that would reverse that trend, I think we would be doing a disservice to the public interest and ultimately to the cost of health care. So I would caution those who would suggest that it's as simple as reducing taxes, although that seems to be an attractive solution at first glance.

Mrs Haslam: I agree with you fully on that. I was trying to find it here among my papers, because I'm doing a lot with non-smokers' week in a while. But I remember reading something from the Non-Smokers' Rights Association or something in my notes that said the taxes from tobacco fall billions short of what we spend in health care in related illnesses; not just in the cancer, but they took into consideration all of the other illnesses that result from firsthand or secondhand smoke. We are billions short in the health care budget according to what we bring in on our sin taxes or our smoking taxes.

So I agree fully that that's not the solution. I would hate to see us go back to previous levels of smokers and seeing it increase in the young people. I think there are many ways we can address this, but I have a concern that this would be a simplistic way of doing it.

The Chair: If there's no further discussion on that topic, then we have "Contributing Factors" on page 15.

Mr Kwinter: At the bottom of the page we have the same situation that I've been commenting on throughout these hearings. I think the intent, certainly at the hearings, was that the idea that we had technological developments and globalization was viewed as facilitating tax avoidance through intercorporate transfers. I don't think anyone was implying that these companies were doing anything that was illegal. They were doing things to minimize their taxes in any given jurisdiction, and to suggest it would facilitate tax evasion is to imply that the companies were doing things that were illegal. I don't think that was the intent of the comment or the situation that took place at the committee hearing.

Ms Campbell: So you would like the wording at the bottom of page 15 changed so that it does not --

Mr Kwinter: Just change "evasion" to "avoidance."

Mrs Haslam: Yes, but it was viewed as facilitating. It didn't say it did; it just said it was viewed as facilitating tax evasion.

Mr Kwinter: No, it wasn't. That's the point I was making. My interpretation was there was no hint that it would facilitate these companies doing illegal things. What it would do is allow them to pay taxes in a jurisdiction where the taxes were lower as opposed to paying taxes in a jurisdiction where the taxes were higher, but that is not illegal. If they can do it and if they can do it legally, then it's tax avoidance. That's what the comment said, that with the new technology and with the globalization, it allowed companies to organize their affairs where they could pay the least tax that they had to, but there was nothing illegal implied in what they were doing.

Mr Phillips: On another matter, the thing that struck me when I was listening to all the testimony was that I had this feeling in the pit of my stomach that the reasons for the underground economy growing are not clear. For example, a lot of people said that the GST coming in has driven the underground economy up dramatically. I had this feeling in the pit of my stomach that that merely somehow or other gave an easier way to participate in the underground economy as opposed to necessarily driving people into the underground economy. If I were writing this personally, in the opening paragraph under "Contributing Factors," I'd say that, based on the testimony, we don't know the reason it's growing dramatically and we can only speculate. What you've got is the speculation of the presenters and it's clear that we don't have a firm hand on the reasons for it, but the following are what we heard in the testimony.

I think this is a reflection of what we heard in the testimony, but I was struck by a lot of things, including one of the ministry officials saying the biggest loss of revenue in the underground economy is in the income tax area. What I took from that, and I've seen evidence of this, was that people who supply services use the GST to co-opt people into becoming willing partners. Once you say, "I will pay cash and not pay the GST," then the person who gives you the service says, "Great, now you can't blow the whistle on me, so I won't report that as income."

I'm just saying I think these things are maybe more subtle and more sophisticated than just what we heard. If I could do it, I would put, "We don't know, we need more research, we need more evidence, but here's what the witnesses reported." And they did report these five things to us, I think.

Mr Sutherland: I guess in terms of when you put the title "Contributing Factors," it doesn't mean that any one is the exact reason. Mr Phillips, you used the term "speculating." I believe we did receive some evidence, maybe not only from the Ministry of Finance but also we talked about Roger Smith's presentation that there was some more tangible evidence that since the implementation of the GST the problem has grown.


Whether you say it's the GST itself or whether that's just an accumulation of different tax policies coming out in that one, I think we can say there is some substantial evidence or some work that has been done that would cite more than just speculation on the issue. If we're putting them forward as contributing factors, I don't think we can say that there's any one specific reason that's leading to it but a series of factors, and some of the presenters have put forward some evidence.

Mr Carr: The point I want to make, and I know the tax system has its own section, but I think there should be some recognition that governments at different levels forget this. The problem isn't with any one level of government; it's the accumulated total. I know there's been a lot of finger-pointing of whose fault, whether it's federal, provincial or municipal. I think somewhere in there under the causes we should put that it's a cumulative effect and governments at all levels have created it, because, as you know, any time we talk about high taxation levels with the government, they'll compare it to Ohio in a certain category where we do well and say, "See, we compete there." I think the public is smart enough to realize the problem we've got is that it's a bottom-line total in taxation. It's non-political. It's been governments at all levels and all political stripes that have got us into this mess, and I think a recognition of that by this committee would be helpful.

I guess I'm jumping ahead when we get into taxation, but I would like to be more specific, to say it's the general levels of taxation that are paid at all levels. It's the personal income tax, as Gerry mentioned, because that I think has been a big, big factor. It's been surtaxes that have been put on. It's a percentage of the federal tax rate that's gone up dramatically. I think in the old days a lot of people didn't realize. They're now starting to appreciate because it's coming farther and farther down into the middle class. In the old days, nobody cared about the surtax. Now it hits you at about $53,000, which is the average Ford worker in Oakville.

To be fair about this in a non-partisan way, I think this committee should recommend specifically that it's all this taxation and that it is the bottom level -- not to point fingers at any particular level of government, but just a plain recognition, which I think the public has -- it's the bottom-line total that has created the problem and you can't blame the federal government or the provincial or the municipal. In my own region, one of the biggest factors now will be some of the municipal taxation driving them away. It's a bottom-line total, and I would like to see some recognition that the taxation levels are too high, bottom-line total. I don't know how Elaine could word that, but I think that would be very helpful.

Mr Sutherland: The researcher has pointed out, what level do members want of the following? I think some of the elaboration on those levels of taxation in comparison with other jurisdictions would be relevant. If we remember the one presentation from the chartered accountants, as they said, if you add up the taxes here, yes, they're a bit higher, but if you compare them to the States and then you take in what they have to pay on health care, which is covered by taxes here, there isn't a significant difference in the overall rate of what businesses --

Mr Jackson: Is that with or without the employer health tax?

Mr Sutherland: It was with the employer health tax.

Mr Jackson: He clarified that, did he?

Mr Sutherland: So when we're making those types of statements and saying it's all an accumulation of taxation, obviously people are concerned about how much they're paying in taxes, but maybe for the purposes of the report it wouldn't hurt if we had some of that more detailed information provided on some of the topics that have been outlined in bullet points here by the researcher.

Mr Carr: What I'm sensing -- Kimble, correct me if I'm wrong -- is that there is a bit of a difference. What you seem to be saying is that there aren't the levels of taxation, because then you get into looking at government programs and you can argue that all day. We have more programs than the US. I think we've come to a fundamental difference here, and correct me if I wrong, Kimble: You don't seem to think the taxation levels are too high. Just by what you say, they're pretty close to the US. I think they're disgustingly high.

Again, not to point at anybody, this may be one area where we can come to agreement -- and it's only my own opinion, we can agree to disagree -- but I think the fundamental problem we have with the underground economy is that taxes at all levels are too high, and if we can agree to disagree, then we can put that in there. That's the sense I got from the people coming forward. If you didn't get that, fine, we can disagree, but I really got the sense from people that the taxation levels are too high, whether it's municipal, provincial or federal, and they will do anything to avoid taxes. They don't think the federal government spends it well under the Conservatives. They don't think the provincial government does under the NDP. They don't think the municipal does. That's why we have the taxation problem.

I'd like to see a clear statement of it in there, because I firmly believe, and you can disagree with me, that that's what we heard from the people who came in.

Mr Sutherland: I think there are two responses to Mr Carr. Certainly the perception that taxes are too high for services being provided, I won't disagree that there is that perception there. I think the other thing that Mr Carr is getting at is probably something that should come under the recommendations section when we get to that point of deciding what recommendations we want to put forward, whether we'll go for trying to find consensus on recommendations or whether we'll ultimately say that each of us will put forward our recommendations and they'll be listed there.

Mr Carr: Mine was just recommendations, whether we call for a tax freeze or reduction or whatever. I think under this section, we have to have a heading that a reason or contributing factor is the recognition of the fact that taxes are too high.

Mr Sutherland: The perception that taxes are too high for services provided.

Mr Carr: Yes. You can call it a perception if you want. I would have no problem doing that. I just think there needs to be a recognition in there, before we start saying that we're going to freeze taxes or lower taxes or whatever, of the contributing factor. I think we may have hit on a consensus that the contributing factor is the perception is taxes are too high. We don't need to blame the provincial government. It's bottom line I think that's doing it, and I think that could and should be included in there under this contributing factor.

Mr Wayne Lessard (Windsor-Walkerville): I wasn't present during a lot of the presentations but one I did see was from the Association of Canadian Distillers. One of the points that they made wasn't just that taxes were too high but there was some unfairness in the taxation with respect to distilled spirits vis-à-vis beer and wine. I know there was testimony from Mr Brandt about sales decreasing at the liquor control board stores which sell beer, wine and distilled spirits, but I think that as far as the underground economy goes, there may be a distinction between those different elements. I don't think there was any discussion about beer being a large segment of the underground economy, for example, but wine and distilled spirits certainly are.

I'd like to see more information that was provided from the distillers' association in here with respect to not so much a tax comparison for beverage alcohol with other jurisdictions but also the difference in taxation of beverage alcohol, wine and distilled spirits, because it may be possible in one of the recommendations we make -- this was suggested by the distillers -- that there be changes in the levels of taxation only with respect to distilled spirits. I think that information would be helpful in considering some of the recommendations for corrective actions that we may make.


The Chair: Correct me if I'm wrong, but didn't part of their presentation suggest that taxes be levied based on the amount of alcohol in the beverage?

Mr Lessard: The alcohol content, yes.

The Chair: Any further comments on this section of the report?

Mr Phillips: Somebody's going to have to write this.

Mrs Haslam: So far we've upped it about 30 pages.

Mr Sutherland: Have we given enough direction?

Mr Phillips: Yes. I'm trying to be, as they say, helpful here. I heard several comments from the presenters, and the one I think we all are agreed on is that there is a perception that taxes are high in Ontario or in Canada and that somehow or other that gives you a right, if you perceive them as being higher than elsewhere, to try to evade them.

I think on the tobacco one, I'm not sure people internalize what the problem is. They just know that the retail price of a smuggled pack of cigarettes is dramatically lower than of an Ontario-bought pack. That happens to be driven I think heavily by taxes, but also by tax avoidance by people who smuggle. Unless we find ways that the price differential between a Canadian and a US pack of cigarettes be narrowed, we're probably going to be pushing water uphill on that.

I think there was a point around the way that the GST-PST met to infuriate people. I can recall five or six presenters saying that when the GST came in the way it was, the combination of it somehow or other was one that drove people to rationalizing getting out of it. Then there was the fairness and compliance one.

I don't know where that leads me other than trying to say that on the tax system there may be four points: One is that there's a general malaise about the level of taxation, not necessarily factually based but certainly clearly felt, intuitively; secondly, there is a huge differential between what people pay on certain products in the store and what they can get them on the street for, and that's heavily in tobacco and alcohol I think; thirdly, the combination of sales taxes seems to have been a stimulus to people to get involved, and then the fairness and compliance one. I think we did hear from people saying that there are a lot of people out there who believe, "Other people are getting away with it and therefore I should be investing some time in getting away with it."

The Chair: Any further comments?

Ms Campbell: I'll ask one question on the items listed here on page 17. Am I led to understand that members are fairly content with the bullet points that are listed here? Is it worth expanding upon those points, or are there some points that should be deleted?

Mr Sutherland: We had some comments about visible and invisible tax. Could some reference be made there? I don't know whether that goes under the GST section or whether that might come under "Fairness and Compliance" or just under general "Levels of Taxation," but somewhere in that, could the comments about a visible and invisible tax be reflected?

The Chair: Certainly, the question is posed in your first draft here, on page 17, "What level of detail do members want on the following?" I know clearly there has been a lot given with regard to those bullet points that you've raised, but I do think when we get to "Corrective Actions," that's certainly where there will be a dividing of the ways, I suspect, as we try to come to some consensus. Or maybe we won't ever come to a consensus on what we think needs to be done with regard to the bullet points under "Corrective Actions." It may not be necessary to go into a lot of detail with regard to the tax system as it's indicated on page 17 because I expect that the members will have a lot to contribute with regard to "Corrective Actions" and "Taxation" when we get to that section.

Would that not be a good read of what's probably going to happen?

Mr Phillips: I'm satisfied with that. As I say, if I were writing and that had four sections, then one would be general level of taxation and then, secondly, the enormous difference in the price between what you pay in the store and what seems to be readily available for tobacco, and that is partially taxation and partially a smuggling issue. Then the third thing would be the combination of the two sales taxes, the GST-PST angle -- when those things came together that seems to have driven, according to a lot of witnesses, people much more heavily -- and then the fourth would be the fairness and compliance.

Ms Campbell: I'm just wondering if the members want a great deal of detail on what goes into tobacco and beverage alcohol taxes, the makeup of each of those.

The Chair: The breakdown of the taxes?

Ms Campbell: In terms of federal and provincial.

The Chair: Yes. If there is nothing further on "Contributing Factors," the next probably is the most interesting section of the whole report, and that will be "Corrective Actions."

Mr Kwinter: I thought you were going to get to the "Perceptions of Government." One of the things that I'd like to see included is certainly a perception that I have gleaned from talking to people, not necessarily at these hearings but just talking to general citizens about their reaction to the underground economy. There's a perception that they're paying an inordinate amount of tax for what they consider to be less service. As a result, they don't look upon their participation in the underground economy as being anything that is illegal because they say: "We're paying what we consider to be excess taxes. We're not avoiding that; we're paying that. But somewhere along the line we have to try to mitigate these high taxes by trying to save some money so that we can survive."

So they pay their taxes on the one hand, but then go out and try to make whatever money they've got left go as far as they can and feel no compunction about it at all, have no feeling of guilt or illegality about it. They feel it's almost their duty to their families and to themselves to go out and do this. Again, it isn't a matter of saying: "I'm not going to pay the government taxes. I'm paying them their taxes. I'm paying them absurdly high taxes but I'll never be able to survive and the only way I can survive is I got to go out and see I can make do and get the most that I can with what I've got left."

How we address it, I don't know. But I think we have to acknowledge that,because it's something that certainly keeps coming up in conversation after conversation.

The Chair: I've heard similar comments in speaking to people as well, and certainly when you can no longer avoid taxes then it becomes likely that you may evade taxes in order to make ends meet. I don't think that's a new phenomenon. I think it may be increasing in popularity, however.

The next section is "Corrective Actions" and I would just like to make one comment before we start. Under the "Sector Specific" section on page 19, one of the commodities that was mentioned that I found most interesting and I'm sure all the committee members will remember was the jewellery section. It was maybe not as significant in Ontario as it is in Quebec. Under "Sector Specific" it's not mentioned but there's an underground economy in jewellery that is not new but exists. I just wondered if other committee members would think that would be one commodity that might be worth putting in there.

Mr Sutherland: I'm just trying to recall. I'm not sure we got a lot of recommendations on corrective action on that one. That would be the one point.

The second point and while we are dealing somewhat with federal, I got the sense, if I remember correctly, that a lot of it had to do with federal -- because if I remember correctly, they import the raw stones and they have to pay excise taxes on the raw stones or something like that. That was only my recollection, but it may not hurt to have it referenced just to show to people, because the three sectors that are mentioned here are the ones that have received the most attention, and I don't think enough attention has been given to other sectors, so it may not be a bad idea.


The Chair: That's why I thought it might not hurt just to mention it as a bullet point; whether we choose to elaborate on it or not or indicate any specific corrective action, at least have it in there.

Ms Campbell: The committee also had a presentation concerning taxes on fuels, which is indirectly related to jewellery, and both issues were raised during the course of the hearings. Would the committee like specific reference made to jewellery and fuel taxes under the section dealing with the size of the underground economy? When specific reference is made to construction, beverage alcohol and tobacco, perhaps in an introductory paragraph make reference to these other sectors that were represented as well.

Mr Sutherland: Sure. That would be good.

The Chair: Well, the floor is certainly open to, no doubt, a great amount of ideas with regard to how we can correct the problem of the underground economy.

Mr Sutherland: I guess what we've got before us is the list of, under here, what we'd be asking the researcher to do: elaborate on these points based on what was presented. Then out of that would come, as a separate section, I would take it, the recommendations of the committee, yes? So under "Corrective Actions" we're asking the researcher to do a summary of recommendations we heard from the presenters. Is that your sense, Mr Chair, as to how things would proceed?

The Chair: I'm in the hands of the committee. If that's what the committee believes should happen, then certainly that's probably what will happen.

Mr Lessard: Excellent suggestion.

Mr Carr: So what you're suggesting is a summary of what you heard.

Mr Sutherland: Yes, and then a separate section, as with most reports, recommendations or whatever. As we mentioned earlier, this process is similar to what we did on cross-border shopping. I believe we did the same type of thing. We listed the recommendations of what action should be taken or had a summary section on what was presented to us, and then there was the final section on recommendations.

The Chair: Well, let's pick the topic of taxation, two bullet points there: harmonization of GST and PST, that is a political decision that will be made by the government; and lower tax rates and broader bases, that's an interesting proposal, and I'm sure that the implications of that are quite profound as well. But if there's no more specific direction with regard to how the research officer should continue, then I heard what Mr Sutherland said, and that would seem okay.

Ms Campbell: Committee members will notice that on page 18, the first paragraph under "Corrective Actions," the last sentence in that paragraph, "Members may wish to make additions or deletions, or focus on those that might become committee recommendations." I guess that statement was made anticipating the possibility of the members wanting to perhaps focus on two or three of these points and then have that lead to recommendations, or would the committee like to have reference made to each one of these points and then maybe focus on two or three of those in recommendations?

Mr Kwinter: This gets back to my opening statement when I arrived this afternoon. When I read through the report, I got the feeling that there weren't enough specific corrective actions. We need more meat on the bones of these particular bullet points. If we could get a compilation of the various corrective actions that were suggested by people appearing before us for these various things and we could say these are corrective actions that were suggested, whether it's by the LCBO, whether it's by the Ontario Home Builders' Association, whether it's by whatever group, and list all of those, and then we as a committee can make recommendations based on all of the suggestions that were made to us. I think that's what Mr Sutherland was saying.

Mr Sutherland: Yes, and I believe we do have a list of recommendations or we were provided with that earlier.

Ms Campbell: There was a summary provided.

Mr Sutherland: Yes, a summary of the list of recommendations that we all received at some point.

Ms Campbell: I must admit that the summary you were handed some time ago was very general.

Mr Sutherland: Yes.

Ms Campbell: There were much more in the way of specifics contained within the briefs.

Mr Carr: How long would it take to put that together, since it's already there? Any idea?

Ms Campbell: I could maybe get a list ready for tomorrow's meeting.

Mr Carr: That's what I was going to suggest, and then once we've had a chance to go through it, each of us can then decide which ones we'd like, if we can get consensus, and if we can't, to make the suggestions. I just wanted to make sure it wasn't that difficult by tomorrow, but if you've already got a summary, it probably will be a little bit easier.

Ms Campbell: As I said to Mr Sutherland, the summary was more in the way of general recommendations. There were, certainly, very specific points that were included in greater detail in the briefs.

Mr Carr: But it could be done for tomorrow then.

The Chair: I believe that we're getting close to concluding our directions for the research officer and I'd like to ask Ms Campbell, will you be able to have this ready for tomorrow morning? Is that an unreasonable request?

Mrs Haslam: Not if she works all night.

The Chair: Would you prefer to come in the afternoon?

Mr Carr: Mr Chair, she's already said yes. Don't keep asking her.

The Chair: Just to be fair. I don't want to unduly, nor do the committee members want to unduly, put you under stress.

Mrs Caplan: Oh surely. Why should we be the only ones under stress?

The Chair: And in order to have only the very finest and best report brought back to us, would it be better that we meet in the afternoon or will you be able to have this ready?

Ms Campbell: I could have a list ready for distribution tomorrow morning, and perhaps the members could have a chance to look at that before meeting in the afternoon. Is that feasible?

The Chair: That sounds good, if that's agreeable to the committee members.

Mrs Haslam: Obviously, we've gone through page by page with additional comments. That would also allow you to come forward with draft number 2 with some of the changes in place, a list under corrective actions as a review, and then spend --

Ms Campbell: I certainly couldn't promise a complete draft but I would certainly have a list together of the points that were made by the committee members and review those with you to make sure that they are what you want included.

Mr Sutherland: Given that, obviously, practically, draft 2 cannot be done for tomorrow, do we have another day scheduled after tomorrow to deal with this?

The Chair: Not at this time.

Mr Sutherland: Okay, because I wouldn't mind taking a look or having the committee -- even if we can somehow squeeze some time in at some point. I don't know when we'd be able to do it or when the committee would -- I guess it depends.

The Chair: I just overheard the clerk say there might be an opportunity to do this at some time. Again, I must add that the subcommittee today is going to deal with about five individual requests to come before the committee for pre-budget consultations, and as they are assigned times on the roster, that may raise problems.

Clerk of the Committee (Ms Lynn Mellor): We have the last two days for report writing after the pre-budget, and it will probably take the morning of the first day to finalize this report and then you'd have a day and a half for the pre-budget report writing. Then I was going to raise a question to the subcommittee members about meeting regarding the final draft of the pre-budget on February 14, which we'll get to later.

The Chair: It does appear, then, that if we can't conclude this report, absolutely, tomorrow, then we will have an opportunity on -- what date is that?

Clerk of the Committee: February 2.

The Chair: On February 2 to go over it finally. Is that agreeable to the committee members?

Mr Sutherland: It shouldn't take too long.

The Chair: If I understand correctly then, there will be no need to meet in the morning tomorrow except to pick up copies of the information that would be supplied by the research officer.

Clerk of the Committee: If we get it by 11:30 and then copy it and give it to messengers, it might not get into your offices before you'll be coming here. Has anyone any suggestions?

The Chair: Seeing as how we're scheduled to be here anyway, and I suspect that most of us will be around.

Mr Jackson: Why don't you get it to the three caucus offices and then it could be distributed there with telephones. That's probably the fastest way.

The Chair: It really is incumbent upon the members to pick up this information wherever.

Mr Jackson: The caucus office is usually the best way. Do you think you can send us that?

Mr Sutherland: What time line are we looking at in the morning? Are we looking at 11?

Ms Campbell: I could probably get something delivered to the clerk's office no later than 11.

Clerk of the Committee: You can pick it up in my office, room 1405.

The Chair: Copies of the report, as revised, will be available in room 1405 in the Whitney Block at 11 am.

Mr Sutherland: Just the recommendations.

Ms Campbell: It won't be the revised report.

The Chair: Oh, I'm sorry. I stand corrected.

The committee adjourned at 1542.