Tuesday 21 June 1994

Budget Measures Act, 1994, Bill 160 Mr Laughren / Loi de 1994 sur les mesures budgétaires,

projet de loi 160, M. Laughren


*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)

*Haslam, Karen (Perth ND)

*Jamison, Norm (Norfolk ND)

*Johnson, David (Don Mills PC)

*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

Also taking part / Autres participants et participantes:

Sutherland, Kimble, parliamentary assistant to Minister of Finance

Clerk / Greffière: Mellor, Lynn

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

The committee met at 1602 in committee room 1.


The Chair (Mr Paul R. Johnson): The purpose of our meeting today is the organization of Bill 160, An Act to amend certain Acts to provide for certain Measures referred to in the 1993 Budget and for other Measures referred to in the 1994 Budget and to make amendments to the Health Insurance Act respecting the Collection and Disclosure of Personal Information.

I advise the committee, first of all, that it's understood by the Chair that the critics from the official opposition and the third party will be making some statements and the parliamentary assistant to the Minister of Finance will be making a statement. We'll go first to --

Mr Kimble Sutherland (Oxford): Sorry, Mr Chair, do we not have to deal with the organizational issues first?

The Chair: Yes, I'm sorry. You're absolutely right, Mr Sutherland. We have to deal with the organization of Bill 160. Any comments with regard to how we're going to deal with Bill 160?

Mr David Johnson (Don Mills): Sure, I've got comments. I guess I'll be brief on these comments because this is just, as I understand it, the organizational part.

There are a number of aspects to this bill. There is, of course, the corporate filing fee which we feel is of interest to a number of companies and a number of non-profit organizations that will be charged through the province of Ontario -- organizations, we suspect, such as perhaps the Canadian Federation of Independent Business, maybe the Ontario Chamber of Commerce, I'm not sure. There may be a number of organizations as well as individual businesses and non-profit organizations that would be interested in speaking to this matter.

In addition, there's the portion of the bill that deals with the public service pension plan. It's my suspicion that there are members of that plan who, since they're suing the government, may also have some interest in terms of speaking to this committee on the bill.

I have a letter from the Ontario Association of Correctional Managers, for example, who are involved with the bill, and I believe they would like the opportunity to speak on it; the Ontario Provincial Police, probably; AMAPCEO, I believe is the name of the organization who are representing the non-union people, who, undoubtedly, would be interested in speaking to it. We have correspondence from the public school boards of Ontario indicating their interest in this bill, and I suspect the separate school board may have an interest in speaking to this as well. Indeed, there could be other aspects of the bill that various organizations may wish to speak to.

So, consequently, I have a motion that, if it's in order, I'd put forward, which calls for public hearings to take place and would allow the corporations, groups etc that I've referred to and others to make deputations and to be heard before this committee.

I move that the standing committee on finance and economic affairs schedule three weeks of public hearings on the matters and measures proposed and provided for in Bill 160, and that following the public hearings the committee schedule one week of meetings for clause-by-clause review of the bill.

Mr Sutherland: Is that three plus one or just three?

Mr David Johnson: Three plus one.

The Chair: Mr Johnson has moved a motion. Is there any debate on the motion?

Mr Gerry Phillips (Scarborough-Agincourt): Just to share some similar concerns, as we debated second reading of the bill, I think the members know that our caucus had some significant concerns about several aspects of the bill. I think all of us would acknowledge this is a huge bill we're dealing with here that impacts on a whole bunch of different areas in very major ways.

Certainly the public service pension fund is one that I think deserves a good public hearing, primarily because we're talking about some fundamental change in it: We're talking about a three-year holiday; we're talking about $1 billion in reduced payments into the fund over what had been planned; we're talking about, I think, 40,000 retirees who are being put into one plan and we just have not had a chance to hear from the various groups on it. But that's not the only part of the act where we've had people raising issues with us.

The labour-sponsored venture capital corporation one: I think the moves that are planned are good, although we've not had a chance to hear from some of the people who may be impacted by it. But I think the tax break on these plans is in the neighbourhood of $60 million or $70 million a year, if I'm not mistaken, and I think we should know where the benefits of it are going.

Then the Corporations Information Act, as Mr Johnson pointed out, we've had some concerns about the requirement for the annual filing fee and whether or not that's value for money.

Then the whole issue on the health one of the accommodation copayments for psychiatric patients, just where is the government heading on that? What's the rationale for a copayment on psychiatric patients, and is that something that you then begin to say, "If you're in a traditional hospital, a conventional hospital, is the government also thinking of looking at copayments there?"

I think the problem is trying to deal with a bill this large in this short a time frame where so little opportunity for public input has been provided that I have some support for the motion that Mr Johnson is preparing.

Mrs Elinor Caplan (Oriole): I'd like to add just a few comments to those of my colleague. While I agree with everything that he has said, I think there are a number of groups and individuals that are not aware of the implications of the legislation. I also found it troublesome that an omnibus piece of legislation would contain so many significant policy issues from so many ministries where we really had not had any debate or discussion. Some of the ones that Mr Phillips had pointed out I think are quite obvious, and we haven't heard from any of the advocates or organizations that frequently speak for psychiatric patients in this province and to know and to understand the rationale of the Ministry of Health and the government for moving in this direction.


I can remember that we've always had a situation in the province where psychiatric patients received a comfort allowance from the province. On this policy, I cannot recall any thoughtful debate or discussion or what the implications would be or what the impact might be on the lives of those people who are incapacitated and in Ontario's institutions. I think it would be very important for those individuals who speak for people in the institutions to have an opportunity to come before the committee to discuss those provisions.

I've had representations from businesses which want to have foreign expertise, workers, come to the province of Ontario on contract for a period of time, as the multinationals frequently do, and are very concerned about the implications for the families of their workers given the new definition of "resident" that's contained in this piece of legislation. There have been some thoughts that the government's moves would not only be contrary to other policies of the government, but could well be defeated on a charter challenge on the basis of how you treat people who live and work and pay taxes and by any other definition are resident in Ontario.

The fact that you would cover the worker but not the family is a very important and serious policy issue, but it will also make it very difficult to attract people to come and work for a short period of time in the province of Ontario and could well affect our competitiveness. I'd like to hear from some of the companies which have concerns about that. This committee is the place for us to have an opportunity to hear from them about those particular changes to the Health Insurance Act.

I was talking to someone recently who said they'd had inquiries about changes to the Unclaimed Intangible Property Act. When I spoke in the House and mentioned that this was included in this legislation, my phone rang within an hour of them hearing that, saying: "I haven't been able to get any information on that. I've been asking questions. Here it is in this legislation. I'd like an opportunity to come to the committee to get clarification what exactly is happening." So I think there are a number of issues. I've heard from the management group within the Ontario public sector, those who have formed their own organization -- AMAPCEO is the acronym, I believe -- who have concerns about the moves the government is making and the lack of consultation as they set up the OPSEU plan separate. They've expressed real concerns about what will happen to their pension plans and their interests and the costs that will accrue to them. The opportunity for those representatives to come before this committee is very important.

I note, and perhaps it happened before I got here, that there was an agreement to take the Unclaimed Intangible Property Act section out of the bill. The fact that it's been withdrawn is important, because if this hadn't been mentioned in the House, if we hadn't had a chance to talk about it, if people hadn't heard about it, we would never have agreed to withdraw it, to allow for the kind of consultation that has resulted in the withdrawal of that section of the bill. I think it was probably the individuals who contacted me to say they were pleased that this was raised who then raised the issue with the government and the ministry that encouraged them and got them to agree to withdraw those sections.

I'm not going to go through each and every one of the policy issues contained in the bill and in the legislation at this point in time, but I would say that it's an important opportunity for people to have, to be able to come to committee to express their concerns about the policy implications of a major piece of legislation that is as broad-ranging as this one.

So I would very much support public hearings on this piece of legislation in the hope that we're not encouraging the kind of undemocratic, swift passage of legislation without due process.

The Chair: Further debate?

Mr David Johnson: Are we going to hear from the government?

The Chair: If the government chooses to say something, they will, and if they don't then that's --

Mr Gary Carr (Oakville South): They're usually so talkative.

Mr David Johnson: Yes, in the House.

Mr Carr: I wonder if we could egg them into saying something.

Mr David Johnson: While the government is considering their response to this request, I guess I would ask them to consider if there's an aspect of this bill that is urgent at this point, that couldn't go through the scrutiny of public debate. I think there would be interest, as a number of the members have indicated, on several aspects of this bill, which even without the intangible assets, still contains, what, about 16 different parts? I look at the Loan and Trust Corporations Act that's involved here and I suspect there may be input on that. There might even be a little bit of input on the Ontario home ownership savings plan change, as positive as that is. Who knows? There may be some comment on that portion.

So there could be a number of different portions, and I'm a little hard-pressed to see what the urgency is in the bill that it couldn't go through public debate and then be considered in the fall, when undoubtedly we will be reconvening. I don't think there would be any harm done in any aspects of this bill. If there would be harm, I would certainly be very amenable to hearing where the harm would be.

So perhaps with that comment I could provoke some discussion from the government side. No? Not a word. What a bunch.

The Chair: Is there any further debate on this motion? Seeing none, shall the motion carry? All those in favour? All those opposed? The motion is defeated.

Mrs Caplan: The motion to have public hearings has been defeated? Is that correct, Mr Chairman?

The Chair: The motion that was introduced by Mr Johnson has been defeated. That's right, Mrs Caplan.

Mr Sutherland: Given that the previous motion has just been defeated, I'd like to introduce a new motion to be debated. That motion is that the committee not proceed further with consideration of Bill 160, the budget measures act, and that the committee report it back to the House at this time.

The reason I want to bring this motion on to the floor and have some discussion is there are some reasons for having this bill go right back to the House and having it passed before the end of this session. There are significant financial implications should there be a significant delay of the bill in terms of not being able to be passed before the end of the session. A lot of that does have to do with some of the savings that will come about as a result of the negotiations with OPSEU in terms of the pension savings, and we're talking a significant amount of dollars here if there was a delay. Given the fact that the House will probably be rising in a few days, there would obviously not be time for this committee to consider that bill and still achieve those savings. So I have put forward that motion and I look forward to comments.


The Chair: Thank you. I will just inform the committee that the bill is in order and it is debatable but may not --

Interjection: The motion.

The Chair: The motion, rather; my apologies.

Mr Sutherland: We hope the bill's in order too.

The Chair: The motion is in order. It is debatable but is not amendable. So I would ask the members if they wish to contribute to the debate.

Mr Phillips: I'll start. In terms of the sense of urgency around the financing, all of this can be retroactive in that the government, I think when it dealt with the teachers' pension, actually went back to a previous fiscal year -- the books had already closed -- and essentially withdrew money from the pension fund. So I honestly don't think there's a problem on the financial side, because we could very easily deal with this early in the fall and the government would be able to get its money retroactively. So I don't think that's the argument.

I do think there are some aspects of this bill that do merit further exploration and debate, including the ones I talked about earlier on the pension fund and getting some of the affected people in here to comment on how they see it impacting on their pension, to get some of the people who are going to be impacted by the changes in the whole Health Insurance Act and get their comments on it. In the final analysis, I guess, the government could do whatever it wants and probably will, but in terms of a good public policy approach, it's unfortunate we're dealing with something this complex and all-encompassing without ever really giving the public any opportunity for any input, other than trying through individuals to have their voice heard.

Mr Monte Kwinter (Wilson Heights): It's unfortunate that the government has taken the position it has, because there really are some concerns. There are some concerns that should be addressed, and I think this is a bill that is all-encompassing and very, very far-reaching.

To give an example, in just one particular section that deals with the Loan and Trust Corporations Act, the industry has some serious concerns. They've asked for and they thought they would get a chance to come forward and put forward a case to make some certain amendments, for example, to amend the definition of "child," which means "with respect to a restricted party, a person under the age of 18 years."

The rationale is that this amendment eliminates the problem of a married child of a director in good faith entering into a loan transaction with a corporation. The existing prohibition against loans to married children of directors is difficult to police. In any event, it's not based on sound logic, and not only that, but this proposed amendment, if they had a chance to argue it, would actually harmonize with subsection 474(c) of the federal act.

There are three other instances just like that. For example, they would like to see a new subsection 29(1) included by adding the following subsection:

"Where a registered corporation proposes to amalgamate with one or more corporations and none of the corporations are provincial corporations, then an application for initial registration under subsection 31(1) must be submitted to the superintendent."

This is a housekeeping amendment. I don't think it's in any way controversial. It was brought to our attention by finance policy officials, and to not allow that to at least be brought forward and debated so the merits can be pointed out to the committee I think is unfortunate.

I don't want to take up too much time but there are just two other ones that I would like at least put into the record. One is that section 141 of the act be amended by adding a new subsection 4, and this part does not apply as to prevent an amalgamation between restricted parties that is subject to approval under section 23.

What this really does is it reduces the number of approvals required for an amalgamation between restricted parties. It really is a matter of streamlining the process and eliminating some of the red tape. Again, absolutely non-controversial. It's just something that makes eminent sense.

The last one that I'd like to bring to your attention is an amendment to clause 142(1)(b) of the act so that it is repealed and the following clause substituted, and that is:

"To make a loan to any director, officer or employee of the corporation, the spouse or any child of a director or officer of the corporation or any relative of a director or officer of the corporation or of the spouse of a director or officer of corporation, if the loan

"(i) is not a mortgage loan upon real estate or a commercial loan; and

"(ii) is not prohibited by this act by the regulation."

Again, the rationale is that this amendment would permit personal loan types of transactions for directors such as chequing overdrafts and credit cards. The regulations made under the act can be amended to limit the amount of such loans, as is the case for employee loans.

What it really means is that, because you're a director, you shouldn't be penalized from having access to the kinds of service that everybody has access to. You shouldn't have an undue benefit, but on the other hand, you shouldn't be penalized. You shouldn't be asked to be a director of a corporation and, because you are a director, you cannot have the same access that anybody else can.

I think that's unreasonable. I admit there should be provisions that, because you are a director, you don't get special treatment, and that you can abuse it, but surely you should not be precluded from having the same rights.

These are just examples of some of the amendments of just one section. These are areas of concern. The whole intent, it would seem to me, of this new legislation is to in fact streamline the procedure, eliminate some of the red tape, deal with areas that were covered in the budget, but surely, as we have seen in many other initiatives that the government is proposing, to make it easier and make it more user-friendly for some of this legislation to be applied.

With that, I'd just like to see that on the record, and I appreciate your accommodating me.

Mrs Caplan: I'd like to go on the record as saying that I'm disappointed the government has taken the position that it's not going to permit any public hearings or discussions on this significant budget bill. As we've pointed out, there are numerous significant public policy issues which have not been given the kind of public scrutiny, discussion or debate which I think democracy requires.

I don't want to sound like I'm lecturing the government, because I'm not. I feel very strongly that government must be as open and as accountable to the people it governs as possible. I also believe that democracy is about consent of the people to be governed. In order to have that consent, then they must be informed and they must have their say. From my experience, the public hearing, participatory, democratic process is as important as the public policy result. If you're going to have support for the kinds of democratic institutions, then I think people have to know that there is an opportunity for them to participate. When you close the door, you do an injustice to all of us who serve in this Legislature, when we have to go back and report to our constituents that debate was not possible on important public issues.

I'm disappointed because I frankly believe that this bill could go forward in a way which would not in any way hamper the fiscal plan of the government. As Mr Phillips pointed out, there are provisions in the bill which could be retroacted to the date of the budget, as most budget items usually are, and that is the practice, the tradition and the history of budgets. While we may all argue about how important it is to deal expeditiously with legislation, and I've argued that and I believe it is, "expeditious" does not mean cutting off the public's right to be heard and cutting off due process and cutting off debate.


I would just like to state clearly that I believe we have the time, without any detrimental effect on the government's fiscal plan as a result of discussing these measures over the summer and coming back and dealing with these matters early in the fall. The decision that the government has made will make people more cynical, more sceptical, and make them feel less that they can participate in an open and democratic process, and I think that tarnishes us all.

Mr David Johnson: I hardly know what to say. The government has obviously made up its mind to railroad this through, so we're wasting our time. When I came here today, I asked Mr Kwinter, "Are we simply wasting our time here today?" Maybe he was charitable; he didn't say, "Yes, we are." But obviously we are, because the decision was made. The government didn't even respond to my motion other than to put this forward. I hope we can provoke a little bit of response out of them.

I have to say that the rationale for not having public hearings is so thin that it's insulting to the members on this side. To say that the government is going to be saved this money is ridiculous. That's to imply that the money will never be spent, that if we only move today, the $900 million to $1 billion dollars in terms of non-payments to the pension plan is not going to be deferred; it's never going to be made. It's going to be saved. That's what "save" means.

Aside from the fact that it could be retroactive, as Mr Phillips has pointed out, there's an unfunded liability of somewhere around $2.5 billion in this fund. This money has to be paid. It's simply being deferred. Some of it is against that unfunded liability; some is to meet current requirements. But in the end, when we're dealing with an unfunded liability of $2.5 billion, there's going to be this amount of money and a great deal more that's going to have to be paid. It's a question of over what period of time it's going to be paid.

The measures here today will keep in line, I guess, a 40-year payment schedule of that unfunded liability. Had the money we're talking about here today, for example, been put against the unfunded liability, it would have reduced the period of time to 15 years. Anybody who has a mortgage knows that every investment counsellor will tell you to pay off your mortgage as fast as you can, because that's how you get ahead. But here we are, according to the parliamentary assistant, going to save this money. That's just insulting. We're not saving this money; we're just spending it in a different fashion.

I suppose if it was just us on this side calling for the public hearings, then the government would have every right to ignore us. But when I hear from the Ontario Association of Correctional Managers, for example, in their letter to the Honourable Brian Charlton dated June 14 of this year -- apparently they must have listened to Mr Charlton take place in the second reading debate on Bill 160: "It was interesting to listen to your comments last evening during the debate on Bill 160. You stated that the government has offered to meet with the remaining members of the public service pension plan to discuss how that plan should continue to be administered. To date, we have not yet received such an invitation."

So here's an association representing 700 members who have not been party to this discussion at all affecting their future. I mean, words fail when we're talking about the pension plan of these people. They're being treated worse than second-class citizens. They should have an opportunity to speak on their pension plan to their members, not only to the Chair of Management Board, but to come and speak to us.

"When our association learned of the secret negotiations and agreement with OPSEU to split the pension plan, we wrote to your deputy minister, Val Gibbons, on April 21 to express our dismay and frustration with the failure of your government to abide by its commitments and stated principles to treat all employees fairly and equally. To date, we have not yet received a response."

It just baffles me. I don't understand.

The Ontario Provincial Police are upset by this; the Association of Management, Administrative and Professional Crown Employees of Ontario, that is, AMAPCEO, has stated that it feels the split is unfair. They have indicated that some $150 million to $250 million of hard assets have been inappropriately directed through this particular split. They are, as I understand it, filing a court case, which is probably under way right now. Maybe in view of that court case, perhaps they couldn't come to speak, I don't know, but obviously they want to speak to the government. They want to speak to somebody about their pension plan.

I would certainly like to give them, the OPP, the Ontario Association of Correctional Managers and anybody else -- there's even a letter that I've got from some OPSEU members who feel this is an inappropriate way to go, and they've been left out in the cold. I guess their management has made this deal. Perhaps this has been addressed by now. I don't know. It's dated May 5, 1994. They're expressing a great deal of unhappiness about the whole split and they're recommending that their members go against it in a two-page summary. So there's that aspect. I can't believe that the government wouldn't allow those people to have a voice in their pension, which they're depending on for the future. It just astounds me.

Then to speak to some of the other issues, some members have addressed some of them. I'll just address two others then, in view of that, because we're wasting our time here anyway.

I do have a letter from the Ontario Public School Boards' Association. They say that their association "is concerned with the government's intention in Bill 160 to change the method of sharing assessment for publicly traded share capital corporations and non-share capital corporations to an enrolment basis. Rather than have this measure included in the omnibus government budget bill, OPSBA urges that part III of Bill 160" -- that would be the part that deals with the Education Act -- "be referred to committee of the Legislature for full review and public discussion." That's the Ontario Public School Boards' Association. They're asking for public discussion, and I'm sure the separate school system would equally wish to have public discussion.

We can avoid this issue. I know it's a tough issue. Some of these issues are tough issues and it sure would be nice I guess, if you were a government member, not to have to get embroiled in it. Frankly, it's going to put everybody around this table in an uncomfortable position, to have to make decisions and listen to all sides, and there certainly will be different sides, but to deny these people representing the public school boards of Ontario the right to come in and talk about how they're being funded, I just can't understand it. I don't know what else to say.

Again, in their closing comments they say they strongly recommend that it be referred to committee for further review and public debate, "so that all are aware of its intent, the impact on all publicly funded boards and the potential impact on students and taxpayers." They have to deal with taxpayers at the municipal level. They have to be able to make their own plans and understand what's going to happen. They have to be able to explain them to their taxpayers. It's going to be very embarrassing to them, when this comes up, to have to admit they had no input into this, no say, weren't provided with any kind of opportunity. It was just rammed right through on them. It's a very uncomfortable position, I'm sure, for them to be in.

The corporate filing fee -- I'll just mention it again. I have a couple of letters I just pulled off the top from people in various situations; one from Bobcaygeon that is a non-profit. This gentleman entitles his business, I guess I'll call it, "including our modest, non-profit environmentally sound seniors' initiative," which up to now has processed each demand to the letter of the law, while they're being nicked with a $25 fee for this non-profit organization, and he wonders why this is.

I suspect there'll be many, many people across the province of Ontario who are going to be nailed with that $25 fee in the non-profit sector and who are going to wonder the same question and might indeed wish to come to this committee and have their questions answered.

A gentleman from North York, Ontario: "Apart from the overkill consequences of dissolution" -- so if they don't pay their fee, they're dissolved -- "for non-filing, the other point of dispute is the fee." He was writing to one of our members and he questions the authority to do this, and I'm sure he would like to see some further discussion and perhaps have an opportunity to appear before the committee.

I have a couple of others, but I guess I'm wasting my time. I've never been involved with a process that didn't let people come and speak and people whose lives were affected by legislation. I just don't understand it, Mr Chairman.

The Chair: Is there any further debate on Mr Sutherland's motion? Seeing none, I'll call the question.

All those in favour of the motion? All those opposed? The motion is carried.

Mrs Caplan: Could I request a division?

The Chair: All those in favour?


Haslam, Jamison, Lessard, Mathyssen, Sutherland, Wiseman.

The Chair: All those opposed?


Caplan, Carr, Johnson (Don Mills), Kwinter, Phillips.

The Chair: Mr Sutherland's motion was that the committee not proceed with Bill 160 and the bill be reported to the House. The carrying of that motion would mean that the purpose of this meeting then has been concluded and that the Chair will report the business of this committee to the House as per the motion.

Motion to adjourn? All in favour? Opposed? Carried.

This committee is adjourned until the call of the Chair.

The committee adjourned at 1644.