INTENDED
APPOINTMENTS
KEN MORRISH
CONTENTS
Wednesday 3 June 1998
Intended appointments
Mr Ken Morrish
Mr Chisanga Puta-Chekwe
Sir Graham Day
STANDING COMMITTEE ON GOVERNMENT AGENCIES
Chair / Présidente
Ms Frances Lankin (Beaches-Woodbine ND)
Vice-Chair / Vice-Président
Mr Rosario Marchese (Fort York ND)
Mr Alex Cullen (Ottawa West / -Ouest L)
Mr Michael Gravelle (Port Arthur L)
Mr Bill Grimmett (Muskoka-Georgian Bay / Muskoka-Baie-Georgienne PC)
Mr Bert Johnson (Perth PC)
Ms Frances Lankin (Beaches-Woodbine ND)
Mr Rosario Marchese (Fort York ND)
Mr Dan Newman (Scarborough Centre / -Centre PC)
Mr Joseph Spina (Brampton North / -Nord PC)
Mr R. Gary Stewart (Peterborough PC)
Substitutions / Membres remplaçants
Mr Dave Boushy (Sarnia PC)
Mr David Christopherson (Hamilton Centre / -Centre ND)
Mr Gilles Pouliot (Lake Nipigon / Lac-Nipigon ND)
Also taking part / Autres participants et participantes
Ms Marilyn Churley (Riverdale ND)
Clerk / Greffier
Mr Douglas Arnott
Staff / Personnel
Mr David Pond, research officer, Legislative Research Service
The committee met at 1004 in room 228.
INTENDED APPOINTMENTS
KEN MORRISH
Review of intended appointment, selected by official opposition party: Ken Morrish, intended appointee as member, Ontario Place Corporation board of directors.
The Vice-Chair (Mr Rosario Marchese): I call the meeting to order. Mr Morrish, we welcome you here this morning. Each caucus will have 10 minutes to ask some friendly questions of you. Hopefully you are not too nervous. You have an opportunity to say a few words, if you would like, before the questions begin. If you don't wish to, we'll begin right away with the questions.
Mr Ken Morrish: First of all, Mr Chairman and members of the committee, or Chairperson, whichever you wish --
The Vice-Chair: "Chair" is fine.
Mr Morrish: I have a few notes down here and I can expand on any of those that you wish, but I'll keep it short. First of all, it's my pleasure and privilege to meet with you here today and to discuss my desire to become a member of Ontario Place.
I was first elected to municipal government in 1967 and have been a municipal representative pretty well ever since. I was elected to the city of Scarborough council and I've served as alderman, controller, senior controller, budget chief, deputy mayor, mayor. Then as Metro councillor I was deputy chairman of Metro with Paul Godfrey and also in the term of Alan Tonks.
But this last November I chose, or I guess my family chose, that I not seek election again after 30 years. It was a little difficult. I'm sure since I've been home, there have been many mornings that my wife wishes I was still a member of council. While involved in municipal government, I took great interest in Exhibition Place from day one. I've been either on the board of the exhibition board or the exhibition board of governors ever since 1968, since I first came down as the representative at Metro council.
As you possibly know, the board of control came to Metro council and I was a member on that for quite a number of years, right up to date. As a member of the Canadian National Exhibition board I served as vice-president for a couple of terms, two terms of two years. Then I was a member of the board of governors of Exhibition Place for 10 years. As a matter of fact, I was on the first board when it was initiated by Chairman Godfrey. I was on that. George Cohon was our first chairman.
I also served on the CNE air show board and the executive, the budget review, the finance committee, the Royal Agricultural Winter Fair representative, the CNE stadium board of directors. I was a member of the stadium board from day one, long before we even had a Blue Jays team. With Paul Godfrey I visited all the major cities in the United States, I think, in chasing a franchise, which we finally did achieve at last. Then of course Labatt's were there and bought in on the Blue Jays franchise themselves. But our job was to get a team for Toronto, which we did accomplish after some time.
I've had experience on other boards such as the Grey Cup festival committee. I took care of that for a number of years when we represented Metro at, I don't know, Vancouver, Calgary, Winnipeg, Montreal. We put a float in the parade each year at that time and I was in charge of the Metro group that used to go to the Grey Cup.
Metro Toronto Convention and Visitors Association, I was a member of that board for a number of years; the Metropolitan Toronto Housing Co; the Metropolitan Toronto stadium committee, I was on it from day one. When we had to expand the stadium to get our attendance up to about 35,000 before the board of governors of the American league would approve of us, I was involved in that.
I was on the board of Canada's Sports Hall of Fame; on the board of Metro zoo since it opened in 1968; and on the O'Keefe board for about 10 years, and for about three or four years I had their budget as their analyst. Since the opening -- there are a lot of other things but I think you've heard enough. If you want to question me any more, I'd be glad to give them to you.
I think that since the day of opening of Ontario Place, which was in 1971, they've always lacked -- I've tried a number of times to get a direct connection to public transportation because that's a must and will be a must with an expanded Ontario Place if, hopefully, we amalgamate. That's one of the major things. Once we almost got to it, I guess it was during the Davis government, when they had some overhead thing they were going to try. We got so far as to put all the foundations in and I think they're still there. We just sodded them over, I think.
1010
We had them all in and it was planned as a loop of the grounds. It could be a ride and then it could also serve to service Ontario Place. They're still there. Whether that could be revived or not -- I had at the time a motion that we would approve of it, when the province asked us to do this, on the condition that if it were successful, they would continue it to connect with Union Station downtown. That never happened because we never got beyond the footings. But I think they're still there and that could be one of the ways.
The other way that was planned was that along the waterfront, the connection from Spadina would come over and connect in. So I think that's a must.
I think amalgamation -- and I've tried that too for 10 years with the board at the CNE. I kept bringing it up, being on the board, that we should amalgamate because at one time the manager of the CNE and the manager of Ontario Place I don't think even spoke. They would be all conflicting over everything. I at least got them together and I think I'll take credit for that, that they were meeting and having breakfast or doing something. But they at least got together so that they could indicate -- but I won't go any more into that.
I think we're past that now, hopefully, at last, that I can see amalgamation happening, because both Ontario Place and the CNE are quite in agreement that that's the way they should go. Now that we have the trade --
The Vice-Chair: Mr Morrish, I don't want to slow you down, of course, because you're covering a lot of ground, but you may want to leave some time for the Conservatives to ask you one question before we move to the rotation. Is that okay?
Mr Morrish: Sure, I'd be glad to answer questions, whatever.
The Vice-Chair: All right. Mr Grimmett, there is time for one question.
Mr Bill Grimmett (Muskoka-Georgian Bay): Would you like us to start? I thought we were starting with the NDP.
The Vice-Chair: We were starting with you, actually.
Mr Grimmett: Oh, is that right? I'm sorry. Okay. Gary, did you want to ask Mr Morrish a question?
Mr R. Gary Stewart (Peterborough): Yes, I'd be pleased to ask a question. One of the things, and I don't mean this disrespectfully in any remote way, but certainly over the last number of years the CNE has not changed very much. I believe that Ontario Place hasn't changed very much. You can have the best transportation system in the world to get people to something, but if there's nothing there to see and do and change and stay with the new desires and new technology, you're not going to get them.
Mr Morrish: So far I agree with you 100%.
Mr Stewart: How do you see change in the two places to attract visitors for the future?
Mr Morrish: First of all, we have to amalgamate, of course. Now that we have the trade centre, which I guess is one of the better trade centres in the world and it's proven to be very successful -- as you see, a lot of the major shows are going there and there will be a lot more because some of them are desirous of going into the new trade centre, but they have contracts with others for two or three years. But I think when you see those expire they will be there, so that's a central point.
I think the two have to work together. You don't need two managers, you don't need two commissioners or whatever you wish to call them, two of the heads. Here we were paying $150,000 a year and $150,000 there and they weren't even talking to anybody.
I can see with the merger and with a lot of new facilities -- Ontario Place already has three or four in the works now, the IMAX, and I just can't think of the different -- anyway, they've got three or four now.
The CNE at the moment doesn't really have anything. We were discussing with the Maple Leafs. I wasn't altogether sold on that either. I think it was getting too commercial and we would have lost the old CNE feeling. But with amalgamation and the new things, the aquarium I'm thinking of and us with the new centre, we can come up with, as I see it, one of the best waterfront recreational areas in Canada, maybe in North America, if things go.
The governments can't fund all these things. We have to go out for proposals. You never know what you're going to get in proposals. Half of them you can throw out, as you know. But I think we have to go for proposals and that we can make it one of the greatest recreation areas and attract tourists, give them something to attract people to there. Have I answered your question?
The Vice-Chair: Mr Morrish, yes, you have. We get to move on. Questions from the Liberal caucus?
Mr Michael Gravelle (Port Arthur): Good morning, Mr Morrish. You have a very impressive résumé, certainly, in terms of your involvement with the city of Scarborough and Metropolitan Toronto and obviously many other organizations around the community, including the CNE. You are presently the second vice-president of the --
Mr Morrish: No, I'm not at all. As of last December 31, I am no longer. I didn't run again. It wasn't an elected position, but I was on the board as an elected member.
Mr Gravelle: I just wanted to be sure about that. One of the things I wanted to ask you was, obviously the directors of the CNE and the directors of Ontario Place in I guess October 1997 agreed to merge.
Mr Morrish: Yes.
Mr Gravelle: You were on the board of the CNE at that time.
Mr Morrish: That was handled by the board of governors. As you know, the CNE itself is just a three-week show the same as the winter fair and the rest of them.
Mr Gravelle: I understand that.
Mr Morrish: The board of governors handles all the property and all the rentals and everything and they selected three. I wasn't on the board of governors when this came up last year. I was on the board of directors of the CNE but not on the board of governors when they selected I think three from there and three from Ontario Place. But I wasn't involved in any of their meetings or asked to go to any meetings.
Mr Gravelle: But I presume they came to you at some point, or at least there was a discussion. May I presume you support the proposed merger?
Mr Morrish: Oh, definitely. As I say, I tried to do this 10 years ago, when there was no relationship between the two at all and it was terrible.
Mr Gravelle: What is your understanding of where that process is at right now? I don't think the provincial government has made any public announcement as to whether or not they will approve this merger. What's your information on that?
Mr Morrish: I have no access to it because I haven't been to any of the meetings. But my understanding is that December 1, 1998, or January 1, 1999, is the date that's supposed to happen. I haven't heard of too much happening lately but I honestly can't --
Mr Gravelle: We haven't heard anything publicly about that.
Mr Morrish: I'm in favour of it 100%.
Mr Gravelle: Mr Morrish, do you see any potential conflict in the sense that you obviously have been very involved with the CNE in a very active capacity for a number of years and this merger is presumably about to take place and you are now being put on the board of Ontario Place?
I'm not suggesting anything strange. I'm just thinking that having been in the position where you were lobbying to some degree for that position, does that strike you as strange or does it strike you as totally appropriate?
Mr Morrish: I don't see any conflict whatsoever. I'd like to see the two amalgamate. But even if they didn't, I can't see any conflict because I'm completely off the board there now as of December 31 and the board of governors, so I don't have any connection there. I know where the downfalls are of the exhibition and I think that's a real asset to bring to Ontario Place.
Mr Gravelle: I didn't mean to imply that there was. It just struck me that there's this sort of fit that's taking place and your expertise will be, I'm sure, very valuable in making this merger, if it takes place, work.
Mr Morrish, as well in terms of the government review of agencies, boards and commissions that Mr Wood chaired, they made recommendations that public support for Ontario Place should entirely disappear, that there should be no more public subsidies. In other words, it should be privatized. Are you fully in agreement with that process? Do you think there should be no public financial support for Ontario Place?
Mr Morrish: You certainly have to have a public connection. I'm not agreeing to go out and privatize the thing at all. I think that these government -- different things such as the zoo, such as the CNE, are there to provide whatever entertainment in that forum. On the O'Keefe board, that was -- I'll back up a little bit. I was always happy with all these different organizations. If they could supply really good entertainment or recreation in whichever area they were involved in and break even and not cost the taxpayer anything, that was my goal. The trouble is, you get to private enterprise and they're in there to make a buck. Lots of times they don't really care about the public as long as they're coming in and paying. I think these things, like the zoo and the O'Keefe, should be kept under government control, but try and not cost the taxpayer anything.
1020
We were making a bit of money at the O'Keefe when I was there. The big loser that we have actually is the zoo. It costs $8 million. We have to subsidize the zoo $8 million a year, and the Metro taxpayer is getting hooked for that. I always said that should be involved with the province too because over 50% -- some 70% -- of our attendance comes from outside of Metro and yet the Metro taxpayer is paying the whole bundle. They lose about $8 million. A big part of that was that the subway was to be extended out to the zoo and on out to the airport. The goody guys killed the airport and so it never got to the zoo. We never got the attendance over a million people a year, which does not pay for it except for one year when we had the pandas. When we had the pandas, it went to a million and a half, but that was the only time.
The Vice-Chair: Mr Gravelle, one last question.
Mr Gravelle: Thank you, Mr Morrish. I must say that your concerns about privatization actually are interesting and gratifying to hear because they echo a lot of the concerns we have about privatization that we try and express to this government.
Are you in a position today to say that if you are appointed to the board, you indeed will argue in some fashion that there should remain some public subsidy or support for Ontario Place?
Mr Morrish: Oh, definitely. You have to have outside funds too. I don't want the government paying for all these different things that we're hopefully going to build and make it, as I say, one of the greatest recreations in North America in my mind. You're going to have to have private funds there to construct these, but the control I'd like to see remain, and I'm sure that the public are getting a much better --
The Vice-Chair: Mr Christopherson.
Mr David Christopherson (Hamilton Centre): Thank you, Mr Morrish, for attending today. I listened with great interest to your answers and, quite frankly, feel comfortable with the vast majority of what you had to say, so I may not have a lot of questions.
I would ask if you would just expand a little in your own words for the record on the relative importance that you place on the need for government, whether it's provincial or local, but government as an entity, to ensure that places like Ontario Place and other such facilities that you've already said need to be kept in the public domain in terms of control -- specifically your thoughts on the need to keep these affordable for all of the public and not just those who have the discretionary income to pay whatever the going rate is. Could you just expand on how important you think it is, or if you don't think it's important, but the relative importance you would place on keeping these public facilities affordable for all of the public?
Mr Morrish: That's one of the big battles, and always has been, to try and keep them affordable so little Joe with a family of four or five kids can afford to go. There's no use having these great facilities if they can't afford to partake in them. That's always a problem.
That's difficult to answer, but I certainly have always been in favour of keeping the admittance to the zoo and to the Exhibition -- we have a $16 one, or they have now. I shouldn't say "we." It's no longer "we"; it's "they." But that's very important, to try and keep those down, and yet you can't load too much on the -- the one way of doing that is to load it on to the tax bill, but I don't agree with that at all either. There's a maximum there that people can pay.
But to keep them to a minimum as much as possible, I certainly agree. I've had calls from people who say, "I have five kids, and by the time you go to McDonald's and a few other side things, it costs $100," and they just don't have $100 to do it. I agree with keeping them as low as possible.
Parking helps us a lot. That's the big thing. That helped us a lot at the Exhibition. When we had the Blue Jay parking and we lost the Blue Jays and the Argos -- not so much the Argos, but the Blue Jays -- we lost an awful lot, and that helped to keep that down.
I don't know whether I've answered it enough or you want more.
Mr Christopherson: Just further to that, in the scheme of other public services, where would you rank cultural activities like this in terms of all the other services that governments, provincial and local, provide? Do you think it has high importance?
Mr Morrish: Oh, yes. I think this type of thing is very high, to try and provide the public with this type of recreation or service that we're talking here or, as I say, in the case of the zoo. To me it's very high, but it has to be done realistically within -- you just haven't got a financial bundle. And yet, as you mentioned, it's very important that you keep those prices down so that everybody can participate and not just a few.
It's not like the Raptors. If you want to pay 100 bucks for a seat, good luck to you, but this other should be made available, these other facilities.
Mr Christopherson: Having been a former alderman myself, we've struggled in the trenches. I appreciate that you've had that experience, because that really is where the rubber hits the road in terms of weighing these things out.
Hypothetically speaking -- and I recognize the limitations on posing a question that way -- what if you were faced with increasing fees to the point where you knew it was affecting affordability, especially for low- and modest-income families, versus an increase in overall taxes to prevent that? I realize it's difficult to say which way you would go without knowing the circumstances, but just to help me in my comfort level with what you've already stated, which way would you go? I'd like to hear, ideally, because there is a philosophical gap between where the government would see a question like that and where we in the New Democratic Party would see it, but if you're not able to do that, at least what sort of things would you be weighing out as you looked at those two factors?
Mr Morrish: As I say, there's a happy medium there that you have to try and strike, and until I saw all the figures of what we're talking about both ways, that's a difficult thing to answer. I wouldn't like to say --
Mr Christopherson: Would you rule either --
Mr Morrish: You're talking about additional transportation, overhead or whatever, and that would have to be absorbed in the overall TTC transportation budget of now the city of Toronto, and it's not just a little thing. It would have to be part of their budget, and I just can't answer. I know what position their budget is in now, and to add something else to it -- but to me it's high priority because you're going to increase attendance, there's no doubt. With increasing attendance, you're increasing the revenue. Therefore you're gaining there and you're losing there. So it's difficult without seeing --
Mr Christopherson: It's always a difficult balancing act. There are members of the government benches who would under no condition do anything that might increase a tax rate regardless of the impact on the accessibility and affordability of cultural services. Is it fair to say that that's not your position or, if it is, could you expound on it?
Mr Morrish: Well, no. I'm the last one to increase taxes. As the budget chief, I insisted in Scarborough that we keep a zero increase for quite a number of years, and so we'd have to cut some project to make it fit.
Mr Christopherson: A lot of that depends on growth.
Mr Morrish: So therefore it would be the same here. Maybe you'd cut an extension to Spadina -- not Spadina, but Yonge Street or something. You have to take your priorities, whatever you feel the priority is and what the TTC --
Mr Christopherson: Am I hearing you put a great deal of emphasis on that line of tax increases? How strongly do you feel about the idea, in order to maintain accessibility and affordability of public cultural places like Ontario Place, of raising taxes? I know there are members of the Tory government who would just say, "Under no condition," and that's their philosophical position and they're entitled to it. But I'd like to know how strongly you feel about that line.
1030
Mr Morrish: The last thing I wish to do is raise taxes. As I say, you have to adjust your priorities. Maybe this would be a high priority. I go back to the transportation thing, which I assume that you're mainly speaking of.
Mr Christopherson: No.
Mr Morrish: With anything, as I say, the last thing I want to do is -- we have lots of small businesses, and what's going to happen under this new tax thing I have no idea. But even before that, they were just hanging by their fingernails. Another increase in taxes and they're closing the door. If you don't have the little mom-and-pop things, that's your whole community.
Mr Christopherson: But by the same token, you're acknowledging that the idea that Joe, as you called him, and his family sitting at home in the sweltering summer because they can't afford a cottage, they can't afford a vacation and now they can't afford to go to Ontario Place is unacceptable. I'm a little uncomfortable with your last couple of answers, sir, I must tell you. That sounds to me like getting very close to the idea that not raising those taxes is a bigger priority than making sure there's accessibility and affordability to public services like Ontario Place.
Mr Morrish: You have to balance. I certainly voted for increasing taxes, but my priority is not if there's any way around it in adjusting whatever you have, different areas. I just don't know how to put it. Just give me a minute. Anyway, adjusting your priorities.
Mr Christopherson: But once you've done that year after year -- we've seen shrinking dollars available to Ontario Place and other public facilities for years and years. As you well know, those kinds of tinkering around the edges are no longer available.
Mr Morrish: I'm saying here that a lot of these facilities and Ontario Place should be done by private money, not public money. A lot of these, you go out for bids and you get all kinds of things. I think you can have a lot of these built that you don't have to put any public money in at all.
The Vice-Chair: Mr Morrish, thank you very much. We ran out of time and questions. We thank you for coming today.
Mr Morrish: Is that it?
The Vice-Chair: That is it, half an hour. We're going to move on to the next appointment.
CHISANGA PUTA-CHEKWE
Review of intended appointment, selected by official opposition party and third party: Chisanga Puta-Chekwe, intended appointee as chair, Ontario Rental Housing Tribunal.
The Vice-Chair: Can we ask Mr Puta-Chekwe to come forward. Good morning. You've obviously listened to the process and you have a good sense of how it works. We normally ask the appointees if they have some comments to make, and we want to offer you that opportunity. If not, we'll go on to questions immediately.
Mr Chisanga Puta-Chekwe: Yes, I would like to make some comments. I would like to start by simply suggesting that I feel quite strongly that I am well qualified to head the Ontario Rental Housing Tribunal, and I offer three reasons immediately as to why I feel that way.
First, I think I have the right academic background; second, I think I have the right professional and managerial background; and third, I have experience running a crown corporation.
In terms of my academic background, I read law at the universities of Birmingham and London. That's a bachelor of laws and master of laws degree. Then I went on to read philosophy, politics and economics at Oxford.
In terms of my professional background, I have managerial experience in the private sector, the public sector, and of course the non-governmental sector as well.
In terms of specifically running a crown corporation, I was a member of the Criminal Injuries Compensation Board from 1991 to 1994, and then chair from 1994 to 1997. That was quite an experience; it was quite revealing. I think I ran the board with imagination, innovation and compassion.
When I got to the Criminal Injuries Compensation Board, I was told that it was very difficult to control costs because the program was an open-ended one. That was simply an explanation that I refused to accept, and indeed we did demonstrate about two years later that even the Criminal Injuries Compensation Board could operate within budget and, more than that, actually make a saving. At the same time, we increased the number of cases that we were able to process and also cut the backlog by 60%.
Those are the comments I would make by way of opening remarks.
The Vice-Chair: Thank you very much. We're going to begin with the Liberal caucus members' questions.
Mr Alex Cullen (Ottawa West): Thank you very much and welcome to the committee. It certainly was a pleasure reading your résumé here. It's quite impressive.
May I ask how one moves from the Ontario Criminal Injuries Compensation Board, which was an appointment by the previous government, and how you find yourself in this position here?
Mr Puta-Chekwe: I was told that the position was coming up. A few people who knew me tried to interest me in the position, and the more I thought about it, the more interested I became, and I put in an application. That's why I find myself sitting before you today.
Mr Cullen: I'm sure you have noted that this tribunal is being set up to replace the protection afforded to tenants under the Landlord and Tenant Act, and I'm sure you know that's one of the oldest pieces of legislation. It's been around for a long time, as long as there have been landlords and tenants, one would think, and it has a tremendous amount of case law and all that behind it.
The purpose of setting up the housing tribunal is, of course, to expedite the backlog. There is some concern, and I'd like you to address this, that the standards by which evidence was presented and the case law that's been developed under landlord-tenant may be lost or may be set aside to simply expedite the resolution of cases. Perhaps you have a comment on that. You're going to be running this thing and it's clear you're going to be setting down the standards by which the tribunal is to act. How cognizant are you going to be of what has happened in landlord-tenant?
Mr Puta-Chekwe: Firstly, if I were chair I would make sure that the standards weren't compromised. My second comment would be that the legislation, the Tenant Protection Act, is quite specific, quite extensive, and tends to encourage adherence to certain standards. I really don't see that as a structural problem; I see it as a problem that can be resolved through good management and adherence to the legislation.
Mr Cullen: The members of your tribunal, of course, are being chosen by the government. They're not judges, and that's what the Landlord and Tenant Act was adjudicated by: judges that had a representative from the landlord, a representative from the tenants' association, usually a neighbourhood legal service or something like, sometimes their own individual. Here you'll be dealing with laypeople who are taking over what used to fall under the law. What will be your approach to that to make sure we don't lose the good reputation, the good law that was there under landlord-tenant?
Mr Puta-Chekwe: Firstly, I think the majority of the members actually have extensive legal training and many of them are qualified to become judges, although, of course, you're quite right that none of them are judges at this moment in time. That's a resource that we should use quite freely.
Secondly, every decision, I think, is subject to review by an in-house vice-chair who is a very well qualified lawyer as well. I think we can again use that resource to ensure we are maintaining standards and that we aren't doing anything that is prejudicial either to the interests of the landlord or the tenant.
Mr Cullen: Besides the usual things that come up in landlord-tenant disputes, this act opens the door to new areas. One of the concerns that came up from my community -- I live in Ottawa; you live in Gloucester. We all know that Ottawa-Carleton has a lot of rentals.
There are two aspects. One is the ability for the landlord to negotiate minor capital repairs with the tenant -- that is new -- and then that part of the act that speaks to harassment. The concern expressed by many tenant organizations is that this ability to negotiate, because the minor capital renovations are a cost to the landlord, opens the whole door to an area of dispute and that will be related to the issue of harassment. Harassment is new; this area is new. The name of the act, to set this up in the Newspeak of this government, is the Tenant Protection Act. We're concerned that there's going to be a lot of activity here and a new area to set policy. What are your views on this?
1040
Mr Puta-Chekwe: I actually don't think there is that much opportunity to set new policy or to legislate through the back door, and I certainly would not encourage that. What I personally find, reading the Tenant Protection Act -- I don't claim at this point to be an expert; I think it's going to take time before we know how it actually works in practice. One is going to need much more experience before one can get anywhere close to being able to claim that one is an expert on the legislation.
My reading of the legislation at the moment suggests that it's extremely balanced. You talk about harassment. There is a specific provision in the legislation that prohibits harassment of tenants. If I became chair, I would interpret that provision very carefully to the advantage of the parties, but also being faithful to the intention of the Legislature.
Certain doctrines like distress have been abolished. That is to the tenants' advantage clearly. Many tenancy agreements have a provision in the event a default by the tenant results in the tenant being liable to pay rent for the remainder of the term. Those provisions would not be valid under this legislation. So as is the case in all legislation that appears to be balanced, there is something for landlords to be happy about, but there is also something for tenants to be happy about. The other side of the coin is that there is a great deal for both of them to be unhappy about.
Mr Cullen: Just talking about this new area, up to now there was a standard that landlords had to meet in terms of the provision of services under their lease. Now, with this opening of the door about minor capital repairs and the ability to negotiate something, if you want to get that screen door fixed, you have to pay this fee. Then the negotiation starts and there is no resolution and it comes to you. Where does one cross the line if your screen door isn't fixed, you can't get your stove repaired properly and it only functions partially, and you continue to have that loud sound from your refrigerator? At what point does this continual resistance to honouring those standards, which previously were there and there was no argument about it -- they could get those rights enforced under the Landlord and Tenant Act, but now it's open to negotiation. How does one develop standards therefore to say, "Is this harassment or not?"
Typically, if you make life unpleasant where you live, you look for something else, and landlords know this. It's a means of making life unpleasant so people go someplace else. It's that boundary line I'm looking at.
Mr Puta-Chekwe: I don't think the standards are compromised. Again, the legislation is very clear as to the kinds of standards that must be adhered to. Indeed, one of the things that can be done is to issue a work order to compel the landlord to carry out necessary repairs that will bring the dwelling to the required standard. I really am not concerned that the tribunal is going to become a Legislature.
Mr Christopherson: Thank you for your comments this morning. It's a very impressive résumé. I want to ask the Chair at the outset if he could let me know when there's one minute left, because I'm going to take advantage of being in this position to ask you about your experience with the South African election. I'm just not going to let that go by. I'd love to hear at first hand from you. That will be my last minute.
To the job at hand, the first thing I'd like to ask you is just in general terms, how do you feel about the concept of social housing and how do you feel about the notion that society has an obligation, especially in a free market enterprise, to ensure that all of its citizens have access to decent, affordable housing? How do you feel about that?
Mr Puta-Chekwe: I feel that's consistent with the idea of a state that provides a safety net. You cannot provide a safety net just in purely cash terms. There are other things that have to accompany that, and I think provision of housing to a certain minimum standard is an ingredient of that safety net.
Mr Christopherson: Just in general terms, speaking of real dollars, because that's what matters at the end of the day, how much should the collective society provide through the tax system to ensure that this type of housing is available, if indeed the private market is not able or willing to do so?
Mr Puta-Chekwe: We have economic indices that will show us clearly what's required to maintain a sustainable and civilized lifestyle. We should use those indices to determine at any one particular time how much is required to be invested in social housing. One of the dangers would be to indicate in advance how much is going to be required, say, six months or a year or 10 years down the road. I think we have to be very current. We have to use the economic tools at our disposal to determine what is consistent with the maintenance of a viable democratic and civilized society.
Mr Christopherson: The current Minister of Municipal Affairs and Housing early in his term stated in the House that the Harris government was -- I'm paraphrasing -- out of the housing business and proud of it. How do you feel about that statement vis-à-vis what you've already said about the need for social housing?
Mr Puta-Chekwe: I haven't yet declared my intention to run for Parliament, so I'm not sure if I'm qualified to comment on that point. All I can say is that as chair of the tribunal, I don't see any evidence that the state is out of the business of public housing.
Mr Christopherson: I was fine with you till the last point. If you check the record I think you'll see that the government's very clear about the fact that they are out of the business and they're very proud of it and they don't see themselves as having a role. But I don't disagree with your position that not being an elected person, you're not going to comment. I accept that.
How do you feel about the notion of rent control, just as a concept, as a tool by government to ensure that even privately owned housing stock is available to all its citizens?
Mr Puta-Chekwe: Obviously, rent control is an attempt to make housing affordable, particularly to low-income people. Whether it's a prescription for all time I am not certain. I know that from time to time it has been used in various jurisdictions -- the United Kingdom, Ontario and so on. If the idea is to ensure that the housing that's available is available at the lowest possible cost, then obviously I agree with that idea. But I don't think it's a prescription for all time and under any circumstances.
Mr Christopherson: So there are conditions where you would be comfortable with totally removing rent control? Is that a fair interpretation of what you said?
Mr Puta-Chekwe: If rent control became destructive, if rent control resulted in a shortage of housing space, for example, if rent control meant that you were having rent paid under the table, yes, in those circumstances I would revisit it and revise it. But I'm not prepared to say that it's something I would rule out or, on the other hand, that it's something that's good for all time and in all circumstances.
Mr Christopherson: Would you be familiar with the British Columbia experience?
Mr Puta-Chekwe: No, I'm not familiar with the British Columbia experience.
1050
Mr Christopherson: Another question: The research paper provided by our staff here at the Legislature shows that opponents to this legislation made the case that, "The ministry's own research," meaning the Ministry of Municipal Affairs and Housing, "indicates that about every five years, roughly 70% of all tenants move." We know that this law is basically vacancy decontrol, meaning that once someone vacates an apartment, the rent controls are lifted, which means that within five years you could have a turnover of 70% of all units that could truly be removed from the current rent control requirements.
I'd like to link that with the fact that there now is an income requirement; there's a ratio of 30% of your income to the projected rent that you're looking at paying, and the 1991 census showed that -- again reading from the notes -- "one third of all rental households (or 430,000) paid more than 30% of their income as rent; 15%...paid more than 50%."
What this is telling us is that it's likely that over a five-year period 70% of all rental units will fall out of rent control, and we also know that one third of the population would not qualify because of the new income threshold for a lot of units. My question to you would be, where would these people go and what obligation does society have to make sure they have somewhere to go?
Mr Puta-Chekwe: First, I'm not certain that's going to follow and I'd also make the point that the legislation itself does not set that ratio. The legislation, if you're referring to section 36 of the Tenant Protection Act, talks about one of the criteria being income information. That's just one of the criteria. From my point of view as prospective chair, all I can say is, if it appeared to us that a prospective tenant had been denied tenancy on the ground only that his or her income was below a certain level, I would consider it legitimate to inquire into those circumstances, and if it appeared to us that that tenant could actually be a reliable tenant in terms of paying the rent and adhering to all the other covenants, I think it would be appropriate for us to make an order enforcing that tenancy.
Mr Christopherson: I'm pleased to hear that.
The Vice-Chair: Mr Christopherson, you're going into your last question.
Mr Christopherson: Yes. I'm taking crass advantage of this opportunity.
Please tell me a bit about what it was like with the South African elections.
Mr Puta-Chekwe: There is a great deal to tell. Actually, I heard from my publisher only two days ago and the book is coming out in the summer. I'll make sure that I send you a copy.
Mr Christopherson: I'd better watch it. I'll be the focus of the Legislature for receiving gifts in an inappropriate fashion. I will definitely look for the book. Thank you very much. I know you have a distinguished career already in public life and I have no problem supporting your candidacy here this morning, sir.
Mr Puta-Chekwe: Thank you very much.
Mr Grimmett: Mr Puta-Chekwe, I wanted to ask you about some of the challenges the tribunal will be facing. There has been some speculation in the media that immediately upon the tribunal commencing work it may have a heavy workload. I understand from reviewing the material we received that you've had an opportunity at the Criminal Injuries Compensation Board to test your skills, as it were, at dealing with backlogs; also at perhaps bringing in some innovative ways to deal with the pressures.
One of the concerns the public has with any aspect of the judicial system is in Ontario it's very difficult to get timely hearings. I wondered if you had any comments, given that the tribunal is going to have some opportunities to be flexible in the way it deals with the people who come before it. I wonder if you could perhaps give us some ideas on how you see this new tribunal dealing with possibly a heavy workload.
Mr Puta-Chekwe: We have an opportunity here in the sense that we have a new tribunal, and therefore we aren't inheriting past mistakes. We have an opportunity to set up a system that can work effectively in the future. So I think the first thing to do is to talk to all the members, all the adjudicators and mediators, and ask them the question: "What are we here to do? This is our mandate. Let us not stray and get involved in things that we shouldn't be involved in. Let's focus, let's concentrate on our mandate."
The second thing to do is to set standards immediately. For example, obviously I'll listen to advice, I'll listen to the members, but I would like to suggest that every member should commit herself or himself to writing decisions within two weeks of hearing the case. If you do that, you won't develop a backlog.
Mr Grimmett: I wonder if you've had the opportunity to speak to other people in the Ontario public service or people who are involved with government agencies about that particular approach. Have you talked that over with other chairs? Because it could be that you have some ideas other people don't know about.
Mr Puta-Chekwe: I was a fairly active member of the Circle of Chairs when I was chair of the Criminal Injuries Compensation Board, and I spoke to fellow chairs about how this could be done, and of course I spoke to my own members.
The approach has to be different if one were looking at part-time members or full-time members. In many ways, part-time members are easier to discipline because you simply say to them, "Look, once you build up a backlog of, say, five cases outstanding for more than three weeks," assuming you'd give them a one-week grace period, or it might even be a month, we're still within the acceptable range -- "you just will not be scheduled; you won't hear any more cases." So they're easier to deal with in that sense. But the full-time members, you make the same threat to them and they have free time for which they are paid. In the case of full-time members, I think what should be made very clear from the outset is that if there is a backlog that I find intolerable, in accordance with rules that have been stated clearly in advance, then I will not hesitate to go to the minister, if need be to the Premier, and ask for a revocation of the order in council. You have to be that firm. If you aren't, things will become lax, backlogs will build up and the whole situation will become intolerable.
Mr Grimmett: Can I ask you about the other innovative options you might try instead of a full-blown hearing, such as mediation? Have you given that much thought?
Mr Puta-Chekwe: Yes. This act is innovative in the sense that it recognizes mediation. The advantage of mediation over adjudication is that each party not only has a vested interest in the outcome, but is enthusiastic about it. They feel that they are part of the process, that they own the process. Therefore, things tend to move more quickly when you're mediating rather than when you are adjudicating.
Specifically, you tend to have fewer adjournments when you are mediating, so the more cases you can mediate, in my view, the better. But of course you won't be able to mediate everything. However, you can reduce the number of cases that are actually being adjudicated and thereby reduce the number of adjournments you're having to make, and thereby reduce the length of time it's taking to clear the general backlog.
Mr Grimmett: I apologize that I'm not familiar enough with the legislation to say for sure whether you are allowed to impose costs on the parties. Are you aware of that?
Mr Puta-Chekwe: Yes, I think we can fine them. I'm certain of course there is a fee as well, but my recollection is that there was provision for costs on the parties.
Mr Grimmett: Do you see most of the people coming before your tribunal as being represented by counsel or not?
Mr Puta-Chekwe: Initially, in the early stages, a number of people will be represented by counsel, but as time goes by my expectation is that the majority of the people will not be represented by counsel, because my hope is that the procedures we shall develop will be user-friendly, formal in the sense of having a structure, but also quite comfortable, and people will feel comfortable to come to the tribunal without representation by counsel. I think as time goes by you'll see more and more people coming alone and having the confidence to pursue their cases on their own.
Mr Grimmett: Thank you, sir. Those are all the questions I have. Any other government members have questions?
The Vice-Chair: Thank you, Mr Grimmett, and thank you, Mr Puta-Chekwe, for coming. The questions have ended.
Mr Puta-Chekwe: Thank you very much.
SIR GRAHAM DAY
Review of intended appointment, selected by third party: Sir Graham Day, intended appointee as member, Ontario Hydro board of directors.
The Vice-Chair: We invite Sir Graham Day to come forward. You've been part of this process, at least in terms of listening to how it works. We have given every member the opportunity to say a few words prior to questions from the various members, and I'd like to offer you that opportunity, if you wish.
Sir Graham Day: Thank you very much, Mr Vice-Chairman. Ms Churley, gentlemen, good morning.
My understanding is that each of you has received a note of my background, so I assume, subject to your questions, I don't have to provide that.
To perhaps supplement in part the information you have, I retired five years ago. I was 65 last month and I had long since determined to stop full-time working when I was 60. I returned from England to Nova Scotia, where I was born and raised. I live in the Annapolis Valley in a small town called Hantsport.
1100
I worked in the UK for two periods totalling 16 years. The gap in my CV would be accounted for by the fact that I taught in the graduate business program at Dalhousie University in the late 1970s, early 1980s. I taught international business, business strategy, and transportation. Before I went to the UK, I practised law in Nova Scotia and then worked for Canadian Pacific in Montreal and here in Toronto. I'm a member in good standing of the bars of Ontario and Nova Scotia.
I know Frank magazine is published in Ontario, as it is indeed in Nova Scotia, where it started. For that reason, you should know that I've been married for 40 years this month, to the same wife.
Mr Gilles Pouliot (Lake Nipigon): And she to the same man.
Sir Graham Day: So she tells me. I have three children and three grandchildren.
You may or may not be interested to know that I did not seek this appointment, that I don't know what it pays. The chairman merely said to me, "Graham, it's much less than what private sector companies pay."
I am not, nor have I ever been, a member of any political party in Canada.
The Vice-Chair: That takes care of the first question.
Sir Graham Day: I have made contributions. They've been fairly catholic in disposal, largely supporting individuals, not parties. I was until last year a dues-paid member of the Conservative Party in the United Kingdom.
I was interested in Mr Farlinger's suggestion that he propose my name to the Premier for a mix of reasons. I believe Ontario Hydro is important not merely to Ontario but also to Canada. You can't live outside Ontario without recognizing that, as so much of the manufacturing and industrial base of Canada is in Ontario, one can say to a large extent, "As goes Ontario, so goes economic Canada." Of course, Ontario Hydro being positioned in the energy sector, which I increasingly view as a continental question and not a provincial question, let alone a Canadian question, I think it becomes very important to all Canadians.
The structure changes proposed by the government interest me. I think they're important, and I have the luxury of considering things that do interest me. Of course, the complexities of Ontario Hydro and its present financial situation interest me because I am, and have been, very interested in the problems of very large corporations for some time.
I do believe that on the basis of my background, I hopefully will be able to make a contribution, sir.
The Vice-Chair: Thank you for the opening remarks. We'll begin with the NDP caucus.
Ms Marilyn Churley (Riverdale): Good morning, and thank you for coming to join us this morning. I appreciate your opening comments.
How much time do I have?
The Vice-Chair: Ten minutes.
Ms Churley: You did answer some of my questions; for instance, who approached you to join the board.
Sir Graham Day: Yes, Mr Farlinger.
Ms Churley: I just wanted to ask you about your background. My information is, and I think it's very clear in your résumé, that as chairman of PowerGen, you led the company's privatization.
Sir Graham Day: Yes, ma'am.
Ms Churley: And earlier you led both the Rover Group power company and British Shipbuilders into privatization as well. Is that correct?
Sir Graham Day: That's correct.
Ms Churley: I would say it's pretty obvious that you're a privatization expert. Did Mr Farlinger say anything to you at all about your background when he approached you? Did he talk to you about privatization and where this government might be going with Hydro?
Sir Graham Day: No, he did not. Yes, he does know my background, but he has not discussed with me the matter of privatization, either in the context of Ontario Hydro or otherwise.
Ms Churley: Did he have a discussion at all with you about why he was asking you to sit?
Sir Graham Day: No. There was an earlier conversation when he was interested in the UK experience, not so much in privatization but in the progressive creation and emergence of a competitive market, things like, "If the privatization of the electricity sector in the United Kingdom had to be done again, what changes do you think might have been made, and did they make any changes en route?" So he was interested I think in the process not so much of privatization but of the injection of competition into the market.
Ms Churley: I see. I have a bit of a personal question to ask you here. You said at the beginning you didn't know how much you'll make as a result of this appointment, but I do know that share prices in PowerGen went up by I believe about 218% between privatization and 1996. That's according to the Economist, anyway. How much did you make out of that?
Sir Graham Day: I organized my contract so that I had no share options and my chairman's salary was fixed, flat, for three years. The reason for that was that in the circumstances, if one is trying to be effective in a change situation, you want to be in a position -- I wanted to be in a position where I didn't have to defend a financial gain.
Ms Churley: I appreciate that comment. I think it's an important question.
Britain's electricity privatization, as you know, has been criticized for, among other things, the very serious level of corporate concentration that resulted. I know that some independent power producers have expressed concern here that the same thing could happen. Could you comment on that?
Sir Graham Day: It went from 100% concentration to a very significant breakup, for example, on the generating side, into three companies -- two fossil-fuel generators and the nuclear side -- and progressively, independent power producers have been introduced into that market. The original two fossil-fuel generating companies, National Power and PowerGen, were required -- and I'm using the word "required" in quotes -- to divest some of their capacity to other concerns. The capacity has been initially spread over three, then seven, then eight, so I fail to understand totally any concern of independent power producers that they haven't had access to the market. You and I could go into the UK tomorrow and enter that market.
Ms Churley: I'm sure I'm almost up. I'd like to explore that, but I don't have time.
I want to ask you this: The price of electricity rose for most customers for the first three years of privatization. It's my understanding that that was reversed after the price caps were put on generators, and privatized companies have to pay dividends to shareholders as well as ensure that the share price keeps going up.
I would really like your honest opinion. Do you think privatization of Ontario Hydro would yield substantive decreases in the price of power for the average customer, given what happened in the UK?
Sir Graham Day: First of all, the prices rose in the UK for some commercial and some industrials because they were being cross-subsidized the way the previous structure, which was unregulated, had occurred. So their prices rose, as you say, for the first couple of years.
The prices for the average citizen, through the distribution companies, were flat or declined, and against the retail price index over five, six or seven years did decline. There weren't necessarily price caps, because it was a competitive pool. Such rate regulation as was introduced, because it was incentive-based, not a rate-based rate of return, tended to be in the distribution end, not on the generating end, since there was competition there.
Do I think privatization would benefit Ontario? I think, like getting to Dublin, you wouldn't necessarily start from here. I think there are some impediments to privatizing Ontario Hydro, and I'm looking at it from the outside, not the inside.
1110
As it presently stands, simply because you have at least two very different situations, maybe three -- you have the generating side, and that breaks into two parts, the nuke and non-nuke, and let's add the fossil fuel and the hydro. That, if you so chose, you probably could sell. As the UK experience indicates, it took perhaps 10 years to bring the nukes to the market. However, faced with the current debt levels, one could certainly dispose of the transmission and distribution, being in a regulated environment, and it would be, as it almost undoubtedly will be, in my view, a common carrier. The proceeds of that could, I believe, fairly substantially pay down some of the debt, which of course the province has guaranteed. If I were a citizen of Ontario, I'd worry about that.
Ms Churley: You don't think it makes sense to sell off the nukes to British Energy or anybody else?
Sir Graham Day: Pardon me?
Ms Churley: You don't think it makes sense to sell off the nukes to British Energy?
Sir Graham Day: I didn't say that. I said it's more difficult.
Ms Churley: I see. Sorry.
Sir Graham Day: You may be aware of a sale to British Energy; I'm not. All I'm aware of, and I'm relying solely on the media, including in the United Kingdom, is that British Energy is "interested" in the possibility of some association with Ontario Hydro on the nuclear side.
Ms Churley: I wish we could go on, but --
The Vice-Chair: Mr Pouliot, if you have a comment or a question, it'll have to be very short.
Mr Pouliot: I just have a very short question, and I too wish to echo my colleague's sentiment. Welcome.
Sir Day, you use the mechanism of the footsie, by way of flirtation, in order to make the sale possible. You are aware, on the other hand, of the liabilities of Ontario Hydro. You're also familiar with their cash flow, with their revenue.
If we were to talk about debt-equity ratio, you go back to PowerGen plc. How would you parallel the debt-equity ratio of PowerGen plc by the time they enter the exchange, by the time they get listed, to what you know with Ontario Hydro, which mainly is a $32-billion liability, as you are well aware, plus the $6 billion to $8 billion which will be necessary to upgrade the nuclear facilities?
From the time you listed shares, you printed shares -- common and, I would assume, preferred -- were there any more shares hitting the market as the process took place? Because I see there was a capital appreciation of more than 200%, but this is not uncommon, depending on the fluctuations, on the sector that you're in. My question is debt-equity ratio, this situation in Britain and our situation here today.
Sir Graham Day: The Central Electricity Generating Board was not in a loss position at the time it was broken up. There was debt. The debt was, I think, relatively modest, and the British government secured proceeds from the privatization in three ways.
First of all, some debt was transferred; fresh debt was injected. Proceeds on the first flotation accrued to government. Government retained 40% for a period of years, then sold the 40% into the market, which addresses your second question, and the government received more money on the sale of the 40% per share, much more, than it did on the sale of the original 60%.
I would say also they made much more money on PowerGen than they did on National Power because I would say that my managerial colleagues managed better.
Mr Joseph Spina (Brampton North): Thank you, Sir Graham, for coming to share this time with us today and also to face the scrutiny. I just want to make a comment with respect to my colleague from Lake Nipigon. "A short question" is always an oxymoron for the member, but we always enjoy his colourful comments. He's also very insightful, so I don't take that away from you, sir.
Are you familiar with the government's white paper on electricity, Sir Graham?
Sir Graham Day: I read it, yes.
Mr Spina: What are your views on its proposed directions?
Sir Graham Day: I think it should be a long-awaited first step. I say a first step because to take any integrated, very large organization and divide it into its component parts is an undertaking by and of itself. I think it's an important first step because it will set the basis, I hope and believe, for competition in the market. I think competition is not only important because it will create a fair market price, but that it will give Ontario industry and business a more competitive rate than perhaps it has enjoyed over recent years. That is in the future but I think that envisaged structure is the first and essential enabling step.
Mr Spina: So the long-term perception, if I read you correctly, is that the more competitive environment that could result through this process over whatever period of time would be better for the consuming public than a government-dominated monopoly, which it currently is?
Sir Graham Day: I believe so and there is, I suggest, a parallel in Ontario, which is the gas business, where there is competition. I suggest, sir, that the average Ontario citizen has benefited from that. But also I believe implicitly that we are moving very, very rapidly to a continental energy situation and generating sources wheeling across North America will also impact on Ontario, and therefore Ontario, I believe, must have a structure which can take advantage of that opportunity for its business and for its citizens. This structure progressively would create that situation, I hope and believe.
Mr Spina: In view of that, would that make it critical that these changes begin?
Sir Graham Day: Yes, and I always believed that when you're going to do something quick is good, slow is bad.
Mr Spina: Thank you very much, sir. I wish you well.
Mr Cullen: Thank you, Sir Graham, for coming here. You talked about how much you were enjoying retirement in the Annapolis Valley and yet we find you here today. You can see the nature of the challenge. Looking at your resume, it's clear you can meet this challenge. My question to you is, this is going to be a very large and complex file. It's going to require a lot of time. Is that your take on it as well? It's certainly my expectation. It that yours?
Sir Graham Day: I have no present sense of how frequently the board meets, the kind of information that's made available, so I can only seek to draw parallels from other situations where I've worked or companies where I presently sit on the board, all of which of course are private sector. My wife jokes and says that if I wasn't retired, I wouldn't have time to do all these other things. But I'm in Toronto very regularly, up to three, four, five times a month.
Mr Cullen: So you feel confident about that. That's good.
When this utility was founded about 90 years or so ago, Sir Adam Beck said the purpose was to provide the citizens of Ontario electricity at cost. Is that a principle that you would uphold?
Sir Graham Day: I doubt whether that principle can be upheld, in the sense that "at cost" implies no return on capital employed for anybody, government or independent shareholder. I believe private capital is important to secure. I think you develop through the use of private capital and private capital requires to be rewarded.
Mr Cullen: Yes, I'm very well aware of that but --
Sir Graham Day: So taking supply at cost at its literal base, if you would include, for example, payment of dividends or pseudo-dividends to government or other shareholders as part of the cost, then I could probably buy Sir Adam's proposition. But if it is only at production cost, then I don't think so, because you also have to provide moneys for future development. They can't all be borrowed, as I suggest the current record of Ontario Hydro should indicate.
1120
Mr Cullen: The debate that your board is going to be entering into -- it's one thing to deal with structural change to make the utility more efficient, and of course we see the white paper and the steps towards privatization, but we have yet to grasp the nettle on Sir Adam Beck's proposition. For the taxpayers of Ontario, who have invested in this, have made a humongous investment in this -- and we can talk about the rates of return and what notional measures are used by Hydro. My background is economics. I know there was tremendous criticism of the assumed rates of return that Hydro did in calculating its major capital projects, but that's another story. But we're talking about the provision of electricity to the citizens of Ontario and whether the public utility model delivers it to them at cost -- and I think it's only prudent to set aside money for future capital investment; I think that any prudent government would do that -- but the notion --
Sir Graham Day: If I were a citizen of Ontario, I'd rather have my electricity at a market rate than at cost, because the cost can rise steadily and one could put one's hand on one's heart in the Adam Beck theory and say, "You may not like the price, but I'm giving it to you at cost," and I could make my cost transparent. I'd rather have a market price, please.
Mr Cullen: Yet I cannot see a market price that is below cost.
Sir Graham Day: But whose cost? Market price is determined by the most efficient.
Mr Cullen: All right. Here we come back to the management of the utility, because there's nothing that predisposes the management of a public utility from having the most efficient cost. I will agree with you that competition certainly puts an incentive there and that can be factored in, but I have to go back to the principles which the taxpayers of Ontario have supported for all these years, decades, of the provision of this, what's deemed to be a basic service, at cost, and in the notion of privatization a factoring and therefore a rate of return for capital, somebody's capital, not necessarily taxpayers' capital -- and this opens the door to another question. If this is to be privatized, how much of the current debt is going to be assumed by taxpayers? So to facilitate the privatization of the utility, the taxpayers in the end are going to be faced with a market rate of return that covers someone else's capital cost and a rate of profit, at the same time carrying the burden of debt. That's not a win-win situation.
Sir Graham Day: I am not privy to any information which would suggest that privatization is on the agenda.
Mr Cullen: You're being appointed, I think, for a purpose.
Sir Graham Day: If I am, then I haven't been told that. But if that is the proposition, then I think the pattern around the world -- let's not talk about the UK. Talk about Australia, where costs to the consumer have fallen. If I were you, I would be much more concerned not about the debt falling on the people of Ontario as a result of privatization but as a result of the utility not coming to grips, which I think it is, in managing the current debt structure.
Mr Cullen: Yes. I think the problems of the current debt structure -- there is a problem there. It's there no matter what we do and it has to be faced. But we come back to the principle of providing electricity at cost. This was the promise that was made over 90 years ago, which has been upheld to today, and I think the taxpayers of Ontario have to be convinced that the new structure would provide that.
Sir Graham Day: Back to the question of cost, I think they've probably been getting it at cost, but it has not been generally competitive. In other words, the cost to industry and commerce in Ontario has not been particularly attractive over these last five, six, seven years. If cost is a virtue, that's what they've been getting. I suggest a market rate will be better.
Mr Cullen: I would suggest to you that management of the utility would be better.
Sir Graham Day: I'm certainly not here to defend the historical management of Ontario Hydro.
Mr Cullen: But you are going on the board to direct that management and if the solution is to throw the baby out with the bath water because it's market rates that will make it better or the solution is better management of a public utility -- I mean, there is a choice there.
Sir Graham Day: I will have no impact on the policy of the government of Ontario vis-à-vis Ontario Hydro. I would hope with my colleagues, only a few of whom I know, to have some impact on the management. But the management, of course, has been progressively changed, including quite recently, as you will be aware. One travels hopefully.
Mr Cullen: Indeed.
The Vice-Chair: Thank you very much. We've exhausted all the questions. Thank you for coming today.
Sir Graham Day: Thank you very much, gentlemen.
The Vice-Chair: We will be dealing with the appointments now in terms of voting for them or not and we'll do it ad seriatim. We have the appointment of Ken Morrish.
Mr Grimmett: I move concurrence, Mr Chair.
The Vice-Chair: All in favour?
Mr Stewart: Could I have a recorded vote, please?
The Vice-Chair: Recorded vote. Mr Grimmett has moved a motion. Is there any discussion on that motion?
Mr Pouliot: Just on a clarification, my good colleague and friend Mr Stewart has moved for a recorded vote. Are we talking in terms of only the first proposal?
The Vice-Chair: Yes. Mr Cullen wants to speak to the motion.
Mr Cullen: I just wanted to make sure there was that opportunity. I'm happy.
Ayes
Cullen, Gravelle, Grimmett, Bert Johnson, Newman, Spina, Stewart.
Nays
Pouliot.
The Vice-Chair: The next intended appointee, Mr Puta-Chekwe. Do we have a motion?
Mr Grimmett: I would like to move concurrence, please.
The Vice-Chair: The motion has been moved. Any discussion?
Mr Cullen: We will be supporting Mr Puta-Chekwe's appointment, but I do want to point out that we're setting in place a new tribunal which is to address a backlog in the courts dealing with rent control and landlord-tenant cases. I think it's going to be very important, as this new tribunal gets into place, as it deals with new legislation, that this government realizes it has to provide sufficient resources.
If we look at the Ombudsman's report, we see that this government has a woeful record in providing sufficient resources to deal with the needs of the electorate, the taxpayers in Ontario in exercising their right to having government provide the responsibilities of service.
We all know about the 16,000 registrants seeking relative searches under the adoption disclosure register. It takes them seven years to get the job done. This is a government responsibility. I think it's horrendous. We know about the Ontario Human Rights Commission with 1,200 cases, the Social Assistance Review Board with nearly 7,000 outstanding cases, and the list goes on and on.
I'm sending out a message here. If the government is going to make this new advance under the Tenant Protection Act, as it claims, better for both participants -- we're not only talking about tenants, we're talking about landlords as well -- it has to provide this new tribunal with the resources to do the job or else it makes a mockery of what it's trying to do.
Mr Spina: I think Mr Cullen's comments are entirely speculative and have very little to do with the appointment of this individual.
The Vice-Chair: The motion has been moved. All in favour?
Mr Stewart: A recorded vote, please.
Ayes
Cullen, Gravelle, Grimmett, Bert Johnson, Newman, Pouliot, Spina, Stewart.
The Vice-Chair: That was unanimous. We'll move on to the third appointment, Sir Graham Day. Do we have a motion?
Mr Grimmett: I'd like to move concurrence.
The Vice-Chair: Any discussion?
Ms Churley: I haven't been officially subbed in today so I cannot vote, but I want to put on the record that if I could vote, I would be voting against this appointmentbecause of my belief that this appointment is being made, given Sir Graham's background, to further the cause of full-scale privatization of Ontario Hydro, which I strenuously object to.
Mr Pouliot: Recorded vote, please, Chair.
Ayes
Cullen, Gravelle, Grimmett, Bert Johnson, Newman, Spina, Stewart.
Nays
Pouliot.
The Vice-Chair: The appointment is confirmed.
I thank all the appointees for coming today.
The committee adjourned at 1130.