DRAFT REPORT ONTARIO FOOD TERMINAL BOARD
CONTENTS
Wednesday 11 May 1994
Subcommittee report
Draft report: Ontario Food Terminal Board
STANDING COMMITTEE ON GOVERNMENT AGENCIES
*Chair / Présidente: Marland, Margaret (Mississauga South/-Sud PC)
*Vice-Chair / Vice-Président: McLean, Allan K. (Simcoe East/-Est PC)
Bradley, James J. (St Catharines L)
*Carter, Jenny (Peterborough ND)
*Cleary, John C. (Cornwall L)
Curling, Alvin (Scarborough North/-Nord L)
*Frankford, Robert (Scarborough East/-Est ND)
*Harrington, Margaret H. (Niagara Falls ND)
*Malkowski, Gary (York East/-Est ND)
Mammoliti, George (Yorkview ND)
*Waters, Daniel (Muskoka-Georgian Bay/Muskoka-Baie-Georgienne ND)
Witmer, Elizabeth (Waterloo North/-Nord PC)
*In attendance / présents
Clerk / Greffière: Mellor, Lynn
Staff / Personnel: Richmond, Jerry, research officer, Legislative Research Service
The committee met at 1007 in room 228.
The Chair (Mrs Margaret Marland): Good morning. I'd like to call to order this meeting of the standing committee on government agencies. The work of the committee this morning is to deal with the subcommittee report, first of all, and then we are going to consider the revised draft report on the Ontario Food Terminal Board. I think just before we deal with the subcommittee report, Mr McLean has something he would like to do.
Mr Allan K. McLean (Simcoe East): I would like to withdraw the certificate of April 22 that we proposed to select, for the Ontario Council of Regents, Mrs Harriet H.D. Stairs -- that we not proceed with that pick.
The Chair: That means that Ms Stairs's appointment will just proceed with the others without being invited to the committee for an interview.
SUBCOMMITTEE REPORT
The Chair: Now we'd like to move the report of the subcommittee dated Wednesday, May 4, which is dealing with the certificate of April 29, 1994. There were no selections from that certificate of April 29, and our subcommittee recommended that the committee review the following agency, the selection of the official opposition party; that is, the St Lawrence Parks Commission.
The third recommendation of that subcommittee was that the committee discuss priorities regarding the review of agencies and intended appointees at its meeting of Wednesday, May 18, which is a week today.
Would someone like to move the subcommittee report?
Mr McLean: So moved.
The Chair: Any discussion on this subcommittee report? All in favour? Thank you. That is carried.
DRAFT REPORT ONTARIO FOOD TERMINAL BOARD
The Chair: Now we'd like to start the consideration of the revised draft report of the Ontario Food Terminal. I realize the committee did deal with this at a previous meeting, and because it was dealt with at a previous meeting, we need unanimous consent to reconsider this report.
At that meeting the report was adopted, I understand, but unfortunately the report does contain recommendations that are contradictory one to the other. So we have to decide which recommendations you would like to go forward. We can't just adopt the report in its entirety.
Do we have unanimous consent to reconsider that report? I see all the heads nodding unanimous consent, so I think then we'll proceed with the author of the report.
Since you have had this report before you once before, I suggest that if you have questions as we go along, we should deal with them as we go through and you should decide at each recommendation which one you want to go forward.
Mr Jerry Richmond: If you turn, there's a covering memo that I wrote in the package that Lynn has distributed. It's dated May 6. It should be self-explanatory.
As Mrs Marland mentioned, the committee considered this item on April 27 and the report is back here. In the memo that you see highlighted, some of the various issues and recommendations were alternative, and in some cases conflicting alternative recommendations are still before the committee.
What I'm proposing to do, if you look a few pages on at the table of contents to the report, I'm assuming that the first eight pages, the introduction and the background information on the food terminal, are accepted. That is purely descriptive information. So what I'm proposing to do is to start the review with the comments and recommendations section that begins on page 9.
The previous sections are descriptive. There might be some need for some minor editing, but I don't get a sense that there should be any controversy with the first nine pages.
I'm moving then to page 9 of the text of the report itself, the section "Comments and Recommendations." The first issue in the text on that page, and going over to the next page, on to page 10, there's description there of the policy issue of the possibility of updating or reviewing the enabling legislation and regulations that pertain to the food terminal. We will recall that the senior food terminal officials and the board members who appeared before the committee earlier did bring this matter forward as an issue to the committee. Pages 9 and 10 merely set out really what transpired.
I don't know whether you want me to read them or highlight them, or you could just glance at them if there are any questions. So those two pages, the text there is merely descriptive information.
If I could move over the page to page 10, the second paragraph on the page, the paragraph below the bullet points, that one sort of leads in to the recommendations below. You see, at the bottom of page 10 and over on page 11, there are two alternative sets of recommendations. With your permission, I'd like to read that middle paragraph on page 10 just to set the theme:
"In considering these matters the committee believes that, given the time required" -- this paragraph leads in to the recommendations below -- "to undertake a complete review and rewrite of the Ontario Food Terminal Act, it would be preferable to attempt to achieve these changes through appropriate food terminal board resolutions or policies, changes to board practices or through making or revising regulations pursuant to the statute. This latter method in particular would have to be pursued in conjunction with the Ministry of Agriculture, Food and Rural Affairs. In addition, the Minister of Agriculture, Food and Rural Affairs may give consideration to `housekeeping amendments' to the Ontario Food Terminal Act to update its provisions."
Then the recommendation below, the first alternative, 1(A), leads into that. It merely reiterates the point above, that the approach to be taken, as one alternative in updating the statute and the regulations -- maybe I should read that 1(A):
"The Ontario Food Terminal Board and the Minister of Agriculture, Food and Rural Affairs should seek to address issues relating to: the broader use of the government guarantee of the food terminal's debt; the preparation of up-to-date business bylaws by the food terminal board; clarification of the board powers; and ability to embark upon related new business ventures through modification of food terminal board policies and procedures and/or the revision of existing or making of new or updated regulations."
Then there's an additional point, and this you may want to consider. The section I just read sets out that the approach should be through looking at the policies and the procedures of the board rather than seeking a full-scale amendment to the statute, but the additional sentence there puts forward: "In addition, the Minister of Agriculture, Food and Rural Affairs should consider introducing `housekeeping amendments' to the Ontario Food Terminal Act to appropriately update this statute."
Ms Jenny Carter (Peterborough): I would suggest we delete that last sentence.
The Chair: Which last sentence?
Ms Carter: "In addition," at the end.
Mr Richmond: At the bottom of page 10.
Ms Carter: "In addition, the Minister of Agriculture, Food and Rural Affairs should consider introducing `housekeeping amendments' to the Ontario Food Terminal Act to appropriately update this statute."
The Chair: Are you making a decision between 1(A) and 1(B)? We have to have one of those.
Ms Carter: We haven't got to that yet, have we?
The Chair: No, so why don't we wait for your elimination of that sentence until we get to the next one?
Ms Carter: Right.
Mr Richmond: So 1(A), as I've explained, is an approach to amend these things by looking at the policies and procedures.
Over the page, on page 11, the alternative really speaks to a more, if I can use the word, drastic approach. It speaks to the updating of the statute itself. With your permission, I'll just read that section over the page, the alternative text and recommendation.
The commentary: "Since the Ontario Food Terminal Act has not been substantially changed or updated since 1946 the committee believes that, in the longer term, it is appropriate for the Minister of Agriculture" etc "to begin the process of systematically reviewing and updating this statute. A specific and compressed timetable to conduct consultation, draft legislation, introduce legislation in the Legislature and secure passage should be considered. This review would not only address the issues raised by the food terminal board but also other matters which arise through the course of the consultation and drafting process."
The proposed alternative recommendation 1(B) is: "The Minister of Agriculture, Food and Rural Affairs should begin the process of preparing a new and updated Ontario Food Terminal Act. This process should address issues raised by the Ontario Food Terminal Board and other matters that arise through the public consultation and drafting process."
That really sets out the two alternatives: 1(A), which is a policies and procedures approach; 1(B) with the text on page 11 and the 1(B) recommendation, which is a full-blown review and updating of the statute.
I would submit that the committee should consider one or the other of those alternatives or some combination thereof.
Mr McLean: It's up to the government to determine which one it would prefer. It doesn't matter to me.
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The Chair: Here's the government arriving now.
Mr McLean: I guess one of them will have to be left in or we might as well stop. The question is, which one do they prefer?
Ms Carter: Following the logic of what I said just before, I would suggest that 1(A) stands without the final sentence in this and that 1(B) falls.
The Chair: Falls?
Ms Carter: Goes.
The Chair: Okay. Ms Carter is suggesting 1(A), with the removal of the last sentence reading as follows: "In addition, the Minister of Agriculture, Food and Rural Affairs should consider introducing `housekeeping amendments' to the Ontario Food Terminal Act to appropriately update this statute." When you take that out, it doesn't mean a great deal, does it?
Mr McLean: There's no point in going any further. If that's being taken out, we might as well stop now, in my books.
The Chair: If you take that out -- oh, I have to remember I'm the Chairperson, so I will refrain from comments. I'll be a very --
Mr McLean: Chairs are capable of responding. They have that right as Chair.
The Chair: May I just say something, then? If people don't want me to say it, tell me, but obviously we have two recommendations here. Both of them are really suggesting that the Ontario Food Terminal Act be looked at, essentially. That's correct, isn't it?
Mr Richmond: Yes.
The Chair: I'm asking you because you wrote it.
Mr Richmond: Yes, 1(A) could be so construed if you keep in the last sentence.
The Chair: That's right; if you keep in the last sentence. I suppose dealing with this very first recommendation, we're deciding whether you want to make any changes in the rules under which the Ontario Food Terminal operates. Bear in mind, this is the fourth report this committee has done on the Ontario Food Terminal.
Mr Richmond: I think the fifth.
The Chair: Perhaps even the fifth.
Mr Richmond: Since the late 1970s.
The Chair: The thing is, the committee heard the presentations. Since 1979, this Ontario Food Terminal has been reviewed and reported on four times by committees of the Legislature. I've sat on three of them. In fairness, we have made recommendations before that haven't been acted on, but I think we're getting really bad if we're not even going to make recommendations. It does make the whole exercise a little superfluous if you really think we shouldn't make any recommendations about the act, but that is the choice of the committee. I'm just pointing that out to you.
Ms Margaret H. Harrington (Niagara Falls): I don't think we're saying not to make recommendations.
Mr McLean: Are you telling us that you don't want that last paragraph or that last part in there?
Mr Daniel Waters (Muskoka-Georgian Bay): What we're saying is we think the changes that should take place within the food terminal don't necessarily require a change in the legislative act under which the food terminal operates. If indeed you needed something, you could do it in other ways that aren't as cumbersome as putting it through the Legislature.
Mr McLean: What it's really saying is that the ministry should consider introducing changes." It doesn't mean to say they have to do it, and they probably won't do it, but at least we're recommending that they should consider it. That's very weak, at the least.
Ms Harrington: What it says in here is that the ministry "should seek to address" the following issues; that's in recommendation 1(A). We're asking the ministry to address the following issues.
Mr McLean: I'd like to just move a motion that we accept recommendation 1(A) as printed.
Mr John C. Cleary (Cornwall): I'll second that.
The Chair: The motion on the floor is to approve 1(A), as printed on page 10, as the recommendation.
I recall that you did ask questions during the committee about how the business of the food terminal could be improved. Also there's a sentence in here, "and ability to embark upon related new business ventures." One of those things I think came out of the discussion of the questions about how to protect Ontario produce and to make that the emphasis. Obviously, in order for some of those things to happen, there have to be some new business ventures. I'm just trying to recall some of the questions you asked from the point of view of changing things.
Mr Robert Frankford (Scarborough East): As I recall, 1(A) does address a number of things that we felt concerns about where we felt something should happen. It only asks for housekeeping amendments which are relatively straightforward, as opposed to 1(B), which is considering opening up the act. I think we all felt some hesitation about that because of the possible influence of GATT and NAFTA and all those other things which could supersede what the ministry wanted to do.
I think I can speak for my colleagues here that we would probably support 1(A). I think that reflects what our discussions did indicate.
The Chair: You were talking about the debt and you were talking about the fact that there is private sector business in there. Some of the private sector businesses are importing from the States some of their produce. They're solely importing from the States. I thought from what I overheard from your questions and the answers that there were things you wanted addressed.
Obviously, that is the motion that's on the floor, 1(A) as printed. Is there any more discussion? All in favour of 1(A) as printed on page 10? Okay, 1(A) is passed.
Recommendation 1(B) is therefore deleted from the report.
Mr Richmond: In going through the report, once I get it back to my shop, there might be a need for some editorial adjustments. I would presume that I would have authority to carry those out, respecting the overall wishes of the committee. It's just that some sentences might not fit; just minor things. If there's anything of substance, I will discuss it with Mrs Marland.
The Chair: Is that agreeable? Okay, that is agreeable. Thank you.
Mr Richmond: The next recommendation is number 2. I'll just read it. It addresses the issue that cropped up when we had the food terminal people before us.
Mr McLean: What page is it on?
Mr Richmond: Page 11, just under the 1(B) section, two thirds of the way down the page. That proposed recommendation addresses the issue which arose -- there was some debate between the food terminal officials, and I believe their solicitor who was on retainer to them spoke to this -- over the fact that at the present time the board does not have conflict-of-interest guidelines to address its operations. So this recommendation has been put forward as a possible approach to that.
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You may recall also that I did consult with the conflict commissioner and brought to you some background information on their perception of the issue of conflict guidelines. I spoke to Mr Evans's executive assistant. I'm sure most of you have met privately with him.
Number two reads: "The Ontario Food Terminal Board, with the assistance of its counsel and the Ministry of Agriculture, Food and Rural Affairs, should undertake to prepare and adopt `Conflict of Interest Guidelines and Procedures' for board members. The memorandum of understanding between the board and the Minister of Agriculture, Food and Rural Affairs could be modified to give direction for the preparation of such `guidelines.'"
The Chair: Okay. Are we in favour of that recommendation? Do we need to move every recommendation?
Clerk of the Committee (Ms Lynn Mellor): If there's no indication by anyone that they're objecting to it, no.
The Chair: All right. Is it unanimous then that we accept recommendation 2 on page 11? That's unanimous. Let's move on.
Mr Richmond: The next section deals with the matter of the update in status of proposed improvements in the food terminal's corporate plan. The current one is for fiscal 1992, 1993 and 1994 and the matter of the preparation of a new corporate plan. The text, unless you feel I should read it into the record, I would submit is probably self-explanatory. It just reviews what's been done and what remains to be done in terms of capital improvements under the current corporate plan.
One thing they haven't done is there is a plan to extend that overhead parking deck over the remaining portions of the farmers' market that lies below. Those of you who came on the tour would clearly understand that. That's the major capital improvement, and then there's a suggestion that they do a new corporate plan.
So unless there's discussion on the text, I'm moving to page 12. What I'll do is read the two proposed recommendations. For these, there are no alternative recommendations. These are just the ones I've drafted for your consideration:
"3. The food terminal board should work to expand the parking deck to both provide additional parking and extend coverage over the farmers' market. The board should pursue negotiations with the Ministry of Agriculture" -- etc; they have such a long title now -- "to determine whether capital assistance would be available for this undertaking and/or also seek to finance this project through charges or fees levied upon terminal tenants.
"4. The food terminal board should proceed with the preparation of a new and updated corporate plan to identify capital improvements and other objectives to be undertaken during the 1990s to maintain the terminal as an efficient and effective public facility to meet the needs of the wholesale produce trade."
The Chair: Are you in favour of those recommendations? Okay, those recommendations, 3 and 4 on page 12, stay in the report. Now we move to option A and option B on pages 12 and 13.
Mr Richmond: This is one of those where there are clear alternatives put forward. There was a farmers' market task force report that was prepared in 1992 that we made reference to earlier, and I do have a copy of that. I believe the clerk distributed that to committee members, so the details of that are available to you.
There is a recommendation in there -- and this certainly generated a lot of discussion during the committee's review -- to prohibit "non-Canadian fruits and vegetables, limiting vendors of non-Ontario fruits and vegetables" in their activities and ability to sell this non-Ontario produce in the farmers' market and in the farmers' market only. For those of us who toured the facility, the farmers' market is located underneath the parking deck. The vendors come in there and have essentially open-air parking stalls where they open up the backs of their trucks and sell their produce.
There are two options here. Option A essentially recognizes the status quo. If you want, I can read the commentary, but it essentially recognizes and makes an argument for maintaining the status quo in that there may be a few vendors who sell, in off-season, non-Ontario produce due to market demands. But the perception and argument in there is that this is not a widespread activity and that essentially the argument is made to just leave things as they are. If you want, I can read this into the record.
The Chair: Since the report will be filed as part of the record, I don't know that we need to read it, unless the committee members wish that.
Mr Richmond: On option A there's no real recommendation that's put forward; it's just a commentary. The final sentence in the shaded section on option A on page 13 just reiterates that: "Because of these issues, the committee is not in a position to recommend a specific course of action on this matter at this time. The food terminal board and the Ministry of Agriculture, Food and Rural Affairs may, however, monitor the situation and hold further deliberations on this matter if conditions warrant."
So it sort of leaves it up in the air.
The Chair: How different is option B?
Mr Richmond: Option B comes down more firmly and essentially makes an argument and includes a text for a very strict restriction upon the sale of non-Ontario and non-Canadian produce by vendors at the farmers' market. The recommendation on page 14 reads as follows:
"5. The Ministry of Agriculture, Food and Rural Affairs should cooperate with and assist the Ontario Food Terminal Board in seeking to preserve and maintain the farmers' market at the terminal as a facility for the exclusive marketing of Ontario-grown produce. An appropriate policy to this effect should be adopted by the food terminal board."
So that's quite definitive, as compared to the previous option, which is essentially the status quo.
The Chair: I think we should discuss the alternative recommendation in light of the fact that option A is a status quo, more or less.
Ms Harrington: What you're saying is that recommendation number 5 actually goes with option B and not with option A.
The Chair: It goes with option B.
Mr Waters: So if I understand it correctly, option B would not only restrict out-of-country but also out-of-province produce?
Mr Richmond: Like BC apples.
Ms Carter: But I seem to remember that the people on the board were not happy with the status quo with regard to that situation, that they felt vulnerable, that they couldn't enforce restrictions that they wished to enforce.
The Chair: If we made it exclusively Ontario produce, would we not be in the situation possibly of having to create another facility for those other times of the year when everything comes from outside of Ontario? I suppose one argument for this facility is, it's one place all the retailers go and all the wholesalers go all year-round. Would there not be months when, if we said only Ontario produce, that wouldn't work, if they couldn't go there for the imported, even other Canadian provinces?
Ms Carter: Of course, the other produce does come through the other firms that function there. There are channels that are open all year-round for imported produce.
Also, going by the farmers' market in my own city of Peterborough, there always is something, such as potatoes and local apples that have been carefully put away, that is available during the winter.
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The Chair: Well, how do you feel about it?
Mr Waters: I made a note way back when -- the last meeting on this, anyway -- that said that I was a bit concerned about restricting it to Ontario only. Our federal government has two trade deals out there that run counter to that. If we open an act -- if the act is in existence I think we're safe -- and say we're going to put more restrictions on, do we run afoul of the federal government and its trade deals with the US and Mexico? I think we need to have an understanding of that before we jump over this.
The Chair: I don't think this involves opening the act. The recommendation says an appropriate policy to this effect should be adopted by the board, so I think it's telling us that it's within the purview of the food terminal board to change a policy and it doesn't involve opening the act. Is that right?
Mr Richmond: That's the way it reads.
Mr Waters: Okay. So it wouldn't involve opening the act to do this? That was a concern that I had. I really think that unless there is a lot of widespread abuse, the system seems to be working as it is, so why would we change it?
Mr Richmond: I just wish to point out, the text on page 13, in defence of option A, the status quo, I believe reiterates some of these concerns as expressed by Mr Waters.
Mr Waters: I'm reading the first sentence in the middle paragraph, which starts, "The committee also...."
Mr Richmond: I've got some commentary here and I'll take some excerpts out. The middle of the page there, on page 13:
"The committee believes that to impose and enforce a rigid restriction on non-Ontario produce at the farmers' market would be a complex matter from both policy and legal perspectives. Vigorous enforcement of this provision could also arouse the concern of other provinces with respect to possible assertions of `restraint of trade' by an Ontario government agency at a time when provincial governments are attempting to remove and limit interprovincial barriers to trade within Canada. Such an action might also be interpreted as contravening Canada's continental and international trading obligations."
The Chair: Do you want to accept option A as it's written?
Mr Waters: Yes, I'll be supporting option A.
The Chair: All right. The committee supports option A.
Mr Richmond: So option B is to deleted in its entirety and recommendation 5.
The Chair: All right. Now we're on to the favourite subject of perpetual leases. Maybe we should go to the recommendations.
Mr Richmond: Straight away?
The Chair: I think so, because everybody knows that subject pretty well.
Mr Richmond: Okay. The commentary reviews it and, as the Chair indicated, it's been around for a long time. The recommendations are on page 16:
"6. The Ontario Food Terminal Board, in association with the Ministry of Agriculture, Food and Rural Affairs, should continue to monitor commercial conditions with respect to the perpetual nature of the A and B unit warehouse leases. The board should take advantage of any opportunities where tenants may be amenable to voluntarily surrender their leases or where businesses may otherwise give up their leases.
"7. The Ontario Food Terminal board should monitor market conditions and (as a proposal every five years; the earlier `C unit' project was cancelled in 1990)" -- if you decide on the five years you can probably take out the phrase `as a proposal' -- "in 1995 assess possible tenant interest in reactivating a plan to build additional new warehouse units (`C units') at the terminal which would be offered for lease without a perpetuity clause."
Mr Waters: Madam Chair, It isn't often that somebody from the committee asks you to step out of your chair for a moment and comment, but I know for a fact that you have been in other reviews and I wouldn't mind hearing your comments on both of those, because you have reviewed as a committee member before.
The Chair: My feeling about the Ontario Food Terminal is probably exactly the same as yours, that is, that it's a publicly owned facility, owned by the taxpayers of this province, primarily for the purposes of the people who live in this province, people who are in the business of growing produce, as it was originally established. I think it's a very important question about how it has evolved with a small group of people having priority of tenure.
Every time we review this agency, I think of this one focal point, maybe two. One has always been, should we make it exclusively Ontario produce? At one time, before we had the sophistication of produce growing all year round all across North America, that was probably a valid comment, but I still think the priority should be for Ontario produce. But then we come down to, who is actually there and who is actually benefiting? When you look at the monetary value of these leases, you realize there's an exclusive enclave of people who have that tenure.
Every time we talk about it, we say: "It would cost a lot of money. It may end up in big legal fees fighting for the right of other people to have leases there." I wish somebody could show me some other government-owned property, where the government owns the land, owns the building and operates it -- I mean, if there's a deficit here, the government will pay it because it's a government facility. Where else like that does anybody have a lease in perpetuity? You can't even lease a campsite from one year to the next. It's an incredible anomaly that was set up years ago under you-know-who's government.
I'll bet you're really glad you asked me. I don't have the solution; I can only tell you how I feel about it every time I hear about it.
Mr Waters: I have no problem with either of the recommendations, except personally I'd like the recommendation to be more aggressive when it comes to getting rid of the perpetual leases. I don't think we're saying clearly that they need to force the issue. I believe Madam Chair is also saying that, that we would like to encourage them to force the issue and get rid of these leases. I have the same feeling.
Mr Cleary: Probably this is one thing we all feel the same about. I guess we're in changing times in the 1990s, in many ways. I for one have had problems with some things there for a considerable time, and I would like to know how we could go about gradually changing it. Possibly some change could come under the recommendations. You might want to strengthen the recommendations a little; I don't know.
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Mr Waters: Could we maybe say something to the effect that "the board should seek out every opportunity," something a bit more aggressive? It says, "the board should take advantage of any opportunities." I want them to actually spend some time working on a plan to end those contracts, so that's the type of wording I'm looking for.
The Chair: The way it's worded here, it's a bit like waiting for Santa Claus, isn't it? Would you consider buyouts?
Mr Waters: If the leases are worth that much, we'd get our money back without too much trouble.
The Chair: Do you know what I think, now that you've asked me? It's a big mistake to have asked me, Dan. I honestly think this is one recommendation where we have to have the ministry responsible for the act start to look at a way to find the remedy.
I have great respect for the existing board. I don't have any relationship with any of the existing board. In fact, I couldn't name them; I know the board members who came before this committee. I don't have any connection with them. But in fairness, if this recommendation is asking the board to do something, it's a bit like asking the rooster to do something in the hen-house, isn't it?, In fairness, I don't know that we can ask the board to develop a remedy. I think what you're saying is that there has to be an end to these perpetual leases that are so limiting the tenure to a few lucky people.
Ms Carter: I think we'd all like to see them gone, but the government of the day did give its word to these people. It would be a bit dangerous just to say, "All right, we've changed our mind after so many years." I think you have to be a little more subtle than that.
The Chair: That's right, Jenny, so what we have to do is get some brilliant legal advice, and the people to do that are not those of us who sit on this committee. I think the responsibility of this committee is to state our concern about the perpetual nature of A and B unit warehouse leases, as has been stated by other committees, and ask the ministry, with its legal staff, to develop a solution, because that's not what we have to do. We have to make the recommendation that the solution is needed.
Mr Waters: If we were to go down to the sentence where it starts "the board" and put in something that says, "therefore, we recommend that the ministry work with the board in an aggressive fashion to end the perpetual leases at units A and B," is that strong enough?
The Chair: It's very clear. Our researcher has scribbled something.
Mr Richmond: This is just a thought. It would be recommendation 8, so it's an additional recommendation. You'd add 6, 7, and a new one, 8: "Over the longer term, the Ministry of Agriculture, Food and Rural Affairs should investigate methods of equitably modifying the perpetual nature of the leases."
The Chair: I prefer Dan's. Yours is very polite, Jerry. I'm not saying Dan's is impolite, but yours gives too much latitude.
Mr Waters: My concern is "over the longer term."
The Chair: That's right. What is that?
Mr Waters: If you were to start recommendation 8 off with, "The ministry and the board should immediately..." and then go on with the rest of it, that might be better.
The Chair: How long have those leases just been extended for? I hate to ask. Is it 30 years? Some of us are going to be dead and buried.
Mr Richmond: The current leases run to 2014. They've been renewed on 30-year terms.
The Chair: Well, that is ridiculous. That means we can't do anything for 30 years anyway, but what's going to happen 30 years from now? Some other committee's going to be sitting here saying, "Terrible thing, those perpetual leases."
At the bottom of page 14, it says, "The current `renewal warehouse lease' extends for 30 years from 1984 to 2014." I'm happy to say I wasn't on the committee in 1984 when that happened. I came the next year.
"Legal opinions presented to a previous committee indicated that the current leaseholders would be entitled to compensation if an attempt were made to terminate these leases."
We know that, but maybe we should make it a direct recommendation that we find out what the cost of compensation would be to make the operation of the terminal more accessible to more people and therefore more equitable.
I remember a few years ago when they were talking about closing down that site, selling the property and relocating it north of Highway 401 because of transportation corridors, because it had got so busy downtown. I suppose if we built a new facility near better transportation, we'd end up saying to all these same people: "You've still got your lease. You're in this brand-new building. It's still that nobody else can come in."
It has to be a very unique situation, and it's regressive, in my opinion. I'm probably really upsetting all the leaseholders. Fortunately, I don't know who they are.
Mr Waters: I agree. I think we should be quite strong on it. Indeed, maybe we should within the recommendation even suggest that they look at the buyout option.
The Chair: There's a buyout option, which means paying compensation. There also has to be developing a new policy about how those leases -- I mean, maybe they should be five-year leases, with a cap. There can't be that much equipment. I suppose some people have expensive refrigeration equipment and so forth.
Mr Waters: It's my understanding that most of that belongs to the food terminal, the coolers.
The Chair: Do they really?
Mr Waters: I believe they said when they came in here that the refrigeration part does.
The Chair: It's very unique, isn't it?
Mr Waters: It's something like a doctor who only works in a hospital. Everything is supplied.
The Chair: If this weren't government-owned, it would be a monopoly, wouldn't it? It's a government-sponsored monopoly, is what it is. Boy.
We have a new recommendation from our researcher.
Mr Richmond: I've tightened up my Santa Claus recommendation. A proposed number 8: "The Ministry of Agriculture, Food and Rural Affairs and the food terminal board, on a priority basis, should investigate methods of equitably terminating the perpetual nature of the leases. A buyout option and/or shorter-term leases should be considered."
That would be a new, free-standing recommendation. I guess it reflects some of the debate, because it shifts the major responsibility to the ministry.
The Chair: Don't you want to say "must" instead of "should," that they "must investigate methods"?
Mr Waters: "Shall" is better.
Mr Richmond: "...shall investigate methods of equitably terminating the perpetual nature of the leases. A buyout option and/or a shorter-term lease should be considered."
The Chair: "Must be considered." I think it's giving direction.
In that case, we don't want to leave 6 and 7 as written. I don't think we need 6, do we?
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Mr Waters: In fact, could we not substitute number 8 for number 6 and just do away with number 6? Number 6 basically says they should eventually look at voluntarily surrendering.
Mr Richmond: So delete number 6?
Mr Waters: Delete 6 and replace it with your recommendation 8, which was very firm. Could you read it back to us once more, now that you've changed the words?
Mr Richmond: But if we keep number 7, should not the proposed number 8 follow 7? The numbering would change. The current number 7 would become number 6, and the proposed number 8 would become number 7, and any other numbering I'll just adjust. The printed 6 is gone.
The Chair: Could you read it now for the committee members? We'd like you to read the new number 7.
Mr Richmond: "The Ministry of Agriculture, Food and Rural Affairs and the food terminal board, on a priority basis, shall investigate methods of equitably terminating the perpetual nature of the leases. A buyout option and/or short-term leases must be considered."
The Chair: One of the powers this committee has is to ask an agency to report back to us in six months' time. If you want to know how this is going, you could add another recommendation, or as part of that, "and shall report back to the government agencies committee in" -- what is it? It's when the committee's sitting, so it would have to be maybe next March or this November, whenever you want.
Mr Waters: It's May right now. Why don't we give them one year from the date this report is filed, which would be a year to this date.
The Chair: But then they'll only do it in April. For them to find a way to do it, they've got to sit down and do it. Do you not think six months is long enough for them to do that?
Mr Cleary: Madam Chair, they could give us a progress report in six months' time.
The Chair: That would be worthwhile. We're asking for a progress report on this recommendation to the committee in six months' time.
Mr Waters: From the time it's tabled.
The Chair: Yes. So it may end up being in March, by the time we sit, to see it again.
Maybe we could send you all a copy when this is cleaned up, so you see it in print. Would you like that?
Mr Waters: Yes, I would like to have a finalized copy, nice and clean.
Clerk of the Committee: Would the subcommittee be sufficient?
Mr Waters: All the committee, actually. It is of interest to every member of the committee, especially those of us who have fruit-growing or farming within our region.
The Chair: That's right. Next week, when we're discussing the work of the committee, we could look at this at the beginning of the meeting; it's not going to take very long. Is that okay, Jerry? Can you do it by next Wednesday so we can look at it at the beginning of our meeting? That's the 18th.
Mr Richmond: Okay.
The Chair: Well, we're making headway.
Mr Richmond: There's one thing I noticed, and this relates to editorial changes when I get back to my office, just so you get some understanding of this. On page 15 I see two sentences that'll probably have to go. I'll just bring this to your attention while we're here; there may be others.
In the second paragraph on page 15, there's a sentence beginning with "The abrogation of the leases...." If that sentence doesn't go, it will certainly have to be modified to reflect the new recommendations. My sense is that it'll probably have to go.
The Chair: Do you know what you could do? You're going to do all this on the computer, and it's easy. For next week, you could highlight the existing sentence and then follow it with the change, so we can look at the existing and look at the change together, one after the other.
Mr Richmond: Or where I delete things, I'll just strike it out, put a line through it.
The Chair: And then put the new one in so they can look back at what it was. Can I just ask the committee members one other thing? Apart from the perpetuity of these leases, how do you feel about the rights of the lessees to sell those leases?
Mr Waters: As it exists now, where they have the right for perpetuity and also have the right to sell them?
The Chair: They do, don't they?
Mr Waters: Going along with our new recommendation 7, they should have no alternative but to sell those leases to the board. In other words, you can't sell them to another citrus and fruit company or whatever. You can't flip them for profit; they have to go back to the board.
The Chair: But don't you find it interesting that they've been able to do that, and then what they sell it for doesn't come to the Ontario government but comes to them?
Mr Waters: It's a nice deal, if you can get it.
The Chair: Okay. Jerry, I think we need to say something along the lines that the committee would want the understanding that all leases -- well, what are you saying?
Mr Richmond: That the board should get first right of refusal.
The Chair: I think you should say that no leases should be sold. The management of those leases rests with the board. If I vacate my lease, I vacate it.
Mr Waters: It reverts to the board.
Ms Carter: What about subletting the leases?
The Chair: That's the same thing, isn't it?
Mr Waters: I think subletting would be used to get around the fact that if you want to give up your lease, it has to go to the board. Subletting's just a way of getting around it, so I don't think we should leave that loophole open.
The Chair: I'm just wondering about if it were in an estate, for example. I think under any circumstances, the ownership of the lease is always with the board and must revert to the board. Is that what you think?
Mr Richmond: I scribbled something down as a suggestion that I might be able to work into the new recommendation 7. I hope this isn't a Santa Clause one, Madam Chair. "The committee believes that the board should also have first right of refusal in the sale or transfer of leases."
The Chair: No, that's not what we're saying. That's saying that if the board refuses it, it's still theirs to give away.
Mr Waters: What we want to say, if I might, is that there is no alternative. They cannot have first right. It has to be returned to the board, period.
The Chair: "Upon termination of the lease, the lease reverts to the board."
Mr Waters: And I would include that if there is an intention to sublet that the lease would return. Include them both. Don't give them the weasel way out.
The Chair: Then you're saying there would be no subletting by the lessee, and upon giving up the lease, the lease returns to the board. That's straightforward, isn't it?
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Ms Carter: I don't know what the legal terminology is, but the point is that the full value of the lease should be paid to the board. Whoever is actually using the facilities, the money they pay should all go to the board, and not to somebody who's taking a rake-off.
The Chair: That would be written in the lease, that they owe the rent to the board.
Ms Carter: If you sublet, that wouldn't happen, would it?
The Chair: No, but you're not interested in subletting, are you? I think you were saying no subletting.
Ms Carter: We just want to have wording to make sure that can't happen. That's the point.
Mr Waters: My concern is that if we allow subletting and you have somebody who has a lease in perpetuity, they can sublet that lease for ever.
The Chair: Yes, they could. That's right.
Mr Waters: And you don't want them to have that right. What you're saying is, "If indeed you're not going to occupy the space you have leased, that space reverts to the board," and that's the end of it, and the board then finds a new tenant.
The Chair: "If you vacate the premises, your lease is terminated." I think we should say something as clean as that: No option of subletting.
Mr Waters: I think Jerry understands where we're coming from, so maybe we can give him a week to come up with something for us on that.
Mr Richmond: I have some notes here. It might take an addition to that new recommendation 7.
The Chair: You know what the committee is saying.
Mr Richmond: Not being a lawyer, though, even as a non-lawyer, I get a sense -- I don't know whether you'd be trampling upon people's rights here. Not to defend the lessees, but they do have a valid legal document.
The Chair: There's no question that we're going to offend the lessees, but I think 30-year perpetual leases are offensive to the taxpayers of this province who provide this facility, and I think that's what the committee is saying this morning. The committee members are not going to design their recommendations around whom they offend and whom they don't. They're trying to do something that's representative of the interests of the people of the province.
I don't expect you can have Hansard to refer to, but you've heard clearly what the comments are this morning. We'll look forward to the version that addresses a prohibition on subletting and the control of the lease being only in the jurisdiction of the board.
Let's move to the next recommendation.
Mr Richmond: Just a minor editorial change to what is now recommendation 6; it was recommendation 7. The phrase "as a proposal" would be deleted.
The Chair: That's right.
On page 18, we've got two alternative recommendations. Can we just deal with the recommendations? Otherwise, we'll never get this finished.
Mr Richmond: Those recommendations address the issue of the possible privatization of the food terminal.
The Chair: That's interesting.
Mr Richmond: And there's extensive commentary before that on pages 16 and 17.
Recommendation 8(a): "The Ministry of Agriculture, Food and Rural Affairs should act to ensure that the Ontario Food Terminal is retained as a self-sustaining public agency. Both the ministry and the Ontario Food Terminal board should continually strive to improve efficiency and the financial performance of the food terminal operations."
Recommendation 8(b) could be an alternative, although, in looking at these, both recommendations 8(a) and 8(b) could stand. They're not strictly contradictory. Let me read 8(b).
"The Ministry of Agriculture, Food and Rural Affairs should conduct a feasibility study, to be tabled in the Legislature, of options to `privatize' the operations of the Ontario Food Terminal. Such a study should seek to retain the operation of a wholesale produce market at the present Etobicoke site and enhance financial returns to the provincial treasury."
The Chair: Shall we go on and look at 9?
Mr Richmond: Recommendations (a), (b) and (c)?
The Chair: Is there a (c)?
Mr Richmond: Yes. That's another issue, though. That's the social contract.
Mr Waters: My preference is that we keep the food terminal in the public domain. I think it has served the public well. There have been some problems, but in the overall, it has been in the public domain for a number of years. It isn't something that's costing us vast sums of money and running a deficit. Therefore, I think we should go with option (a).
The Chair: And if it were running a deficit, that could be remedied before we'd have to think of privatizing it. That's the purpose it was set up for. Do you agree, John?
Mr Cleary: Yes.
The Chair: Then we accept 8(a) as the recommendation, and 8(b) is gone.
We're now on page 19. As we're identifying the pages for the sake of Hansard, maybe we don't need to read them. It would just be faster.
On page 19, we have recommendations 9(a), (b) and (c), and 9(a) and (c) are contradictory, so you're going to have to choose between them.
Mr Waters: So is (b).
The Chair: Oh. You're going to have to select one of these three recommendations.
Ms Carter: I don't think 9(a). I don't think it's fair.
Mr Waters: I believe, because of the nature of the wording in the social contract, we have to go with (a). Since Ontario Hydro and other agencies, boards and commissions of the province fall under the rules of the social contract, I can't see how we can exempt one. Therefore, I would recommend that we go with (a).
The Chair: In (c), Dan, it's got to be resolved between the board and the government.
Mr Waters: I can take (c). I prefer (a), but my sawoff would be (c).
The Chair: In the case of (c), it's not the committee overriding the board, and the government is going to tell the board what it has to do.
Mr Waters: Okay, (c) is passed.
The Chair: Okay, 9(c) is passed.
Mr Richmond: I believe that's the end of the alternatives. There are a few more recommendations. Recommendation 10 on page 22 relates to the food terminal's conservation and waste reduction program, its 3Rs program.
Mr Waters: I don't have any problem with 10 as it's worded. It's saying: "You're doing a good job with the 3Rs and energy. Keep up the good work and keep looking for new and innovative ways."
The Chair: John, is that okay with you? Okay, that's approved.
Mr Richmond: The next section, recommendations 11 and 12, address the matter that since the food terminal was established in the late 1940s, trucks have become the dominant mode of transport for produce at the expense of rail, but the food terminal facility still has a rail spur track going in there which, in my perception and indeed from our tour and statistics, is underutilized. We saw that facility when we were there. The recommendations propose a study to look at the possible dual use of the rail spur, that in the interim -- there are only a few boxcars coming in -- they look at maybe using it also for trucks, but not take out the rail line coming in there.
Our recommendation 12 deals with a broader issue, provincially and nationally. We've seen in the paper that the two transcontinental railways are looking at consolidating their operations in eastern Canada. That's been in the press, that CN and CP are looking to consolidate from Thunder Bay east. Recommendation 12 just proposes a meeting to look at the possibility of whether there's any chance of improving rail service, retaining that mode.
The Chair: They're fairly straightforward. Is there any discussion of 11 or 12? Are you in favour of recommendations 11 and 12 on page 23? Okay.
The final recommendation, on page 24, is recommendation 13. That's a given, I would have thought. It's a good recommendation to reiterate, though. Is there any discussion on that, or anything you want to add? So the committee is in favour of recommendation 13 on page 24? That's carried.
Thank you very much. That was a good piece of work by the committee members this morning and a very good piece of work by Mr Richmond, who prepared the draft report for us. There's an understanding now, because you have as a committee made two or three very significant changes in your own recommendations this morning, that at the beginning of next week's meeting we will simply focus on those with Mr Richmond, and then it'll be finalized next week.
Mr Waters: Probably less than half an hour is needed to do this, so there's no problem that we would still have lots of time to fulfil our wishes for next week.
The Chair: Which is to discuss the future work of the committee. We will be having a subcommittee meeting immediately following this meeting, but for the purposes of this meeting this morning, I thank you for your attendance. The committee stands adjourned.
The committee adjourned at 1123.