Thursday 26 November 1992

Task Force on University Accountability

William Broadhurst, chair

Richard Stackhouse, member

Dr Dan Lang, member

Committee business


*Chair / Président: Mancini, Remo (Essex South/-Sud L)

*Vice-Chair / Vice-Président: Cordiano, Joseph (Lawrence L)

*Callahan, Robert V. (Brampton South/-Sud L)

*Cousens, W. Donald (Markham PC)

*Duignan, Noel (Halton North/-Nord ND)

*Frankford, Robert (Scarborough East/-Est ND)

Haeck, Christel (St Catharines-Brock ND)

*Hayes, Pat (Essex-Kent ND)

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

*O'Connor, Larry (Durham-York ND)

Sorbara, Gregory S. (York Centre L)

*Tilson, David (Dufferin-Peel PC)

Substitutions / Membres remplaçants:

*Perruzza, Anthony (Downsview ND) for Ms Haeck

*In attendance / présents

Also taking part / Autres participants et participantes:

Cooper, Mike (Kitchener-Wilmot ND)

Otterman, Jim, Assistant Provincial Auditor

Sciarra, John, administrative assistant to Provincial Auditor

Clerk / Greffiére: Manikel, Tannis

Staff / Personnel: McLellan, Ray, research officer, Legislative Research Service

The committee met at 1007 in room 151.


The Chair (Mr Remo Mancini): The standing committee on public accounts is called to order. This morning we have with the committee the Task Force on University Accountability. Task force members are here today to consult with the committee in regard to the report the committee worked on last year; I believe the report was tabled in June 1991, if I'm correct. If members happen to have that with them, on pages 65 and 66 of the report there was a section entitled "Inspection Audits of Universities," and items 9 to 19 dealt with recommendations considered useful by the committee at the time.

We also have a letter dated September 30, 1991, from the Deputy Minister of Colleges and Universities, Bernard J. Shapiro. Mr Shapiro, on behalf of the ministry, outlines some views as expressed by the ministry.

This is an ongoing process the committee has undertaken to see if it is necessary to have greater accountability.

We're pleased this morning to have the task force with us. We have Mr William H. Broadhurst, chair of the task force. Sir, I want to welcome you and ask you to introduce your guests, and I'll turn the floor over to you.

Mr William H. Broadhurst: We want to thank you for providing time for the Task Force on University Accountability this morning. I'm going to ask the members present to introduce themselves, to identify the nominating constituency to the task force and then to tell you what they do when they work for a living.

I'll start off. My name is Bill Broadhurst. I was nominated to the task force by the Ontario Council on University Affairs. I recently retired as chairman and senior partner of Price Waterhouse in Canada.

Mr Richard Stackhouse: I'm Richard Stackhouse, chairman of the board of Queen's University, and on the task force representing the Council of Chairmen of Ontario Universities. I too am a retired partner of Price Waterhouse. I used to work for the fellow and I still do.

Dr Dan Lang: I'm Dan Lang. I'm the assistant vice-president for planning and registrar at the University of Toronto, and I'm the chair of the Council of Ontario Universities committee on accountability.

Mr Broadhurst: Would it be all right if we go through the others who are with us? I think it would be useful to identify them for you. We also have with us, from the task force itself, Mr Robert Stephenson, who I believe appeared before this committee in your hearings with another hat on, that of chair of Trent University, and Mr Rob Centa of the Ontario Federation of Students. The other representatives are related to our assistance from the ministry and COU in the sense of staff support.

First of all, I would like to give you a little bit of background about this task force, most of which is already known to your committee. The standing committee on public accounts reported in July 1991, as you've already mentioned, on a number of matters, including its review of the 1988, 1989 and 1990 annual reports of the Provincial Auditor as they pertained to his inspection audits at Trent University, the University of Guelph and the University of Toronto respectively.

The setting up of our task force was a direct result of the recommendations on accountability in your report. The task force was announced by the minister in September 1991 and held its first meeting in November of last year. Included in our terms of reference was a requirement for a progress report by June 1992.

The task force, in late June of this year, issued a combined Progress Report and Issues Paper to both meet the progress report requirements of our terms of reference and to serve as an issues paper to facilitate consultation on the subject of university accountability. The progress report contains the terms of reference of the task force, and the members are also listed in the appendix.

I would briefly like to note that the membership was composed of individuals nominated to the ministry by a number of organizations. I'd just like to mention the organizations represented, which appear on page 51: the Council of Ontario Universities, the Council of Chairmen of Universities, the Ontario Council on University Affairs, the Ontario Confederation of University Faculty Associations, the Confederation of Ontario University Staff Associations, the Ontario Federation of Students, the Ontario Graduate Association and the Ministry of Colleges and Universities. The names of the individuals filling those positions are noted on page 54 of the report.

Early in our deliberations we were instructed by the minister to study the problem at the institutional level, not at the system level. This matter is clarified in the letter I wrote to the minister under date of January 23, 1992, which appears on pages 52 and 53 of our progress report.

There is one statement I would like to read from your report of July 1991 which very well captures the problem we face. I quote from page 37 of the document you referred to earlier:

"At issue in this report is the traditional autonomy of the university community and the need in the 1990s for administrative accountability for government transfer payment funding. According to the ministry, `by acts of the Legislature, universities of Ontario are autonomous institutions.' This autonomy gives them the authority to control academic programs and administrative functions."

Our task force is trying to resolve this issue. How are we going to be able to increase the level of accountability to all stakeholders while at the same time recognizing the autonomous nature of our universities?

Starting in early September of this year, representatives of the task force visited each of the universities in Ontario and listened to anyone who cared to discuss with us or comment on the issues paper. We also had separate meetings with the Council of Chairmen of Ontario Universities, the Council of Ontario Universities, the Confederation of University Staff Associations, the Ontario Confederation of University Faculty Associations and the Ontario Federation of Students.

Essentially, we are trying to implement your recommendation 10, which states in part that, "The Ministry of Colleges and Universities, in consultation with the universities, shall develop administrative guidelines for an enhanced management accountability mechanism, based on the principles of economy, efficiency and standards/procedures to measure effectiveness in universities."

I should note that we have also focused our attention on recommendation 9 in your report, which suggested that the Audit Act be amended to provide the Provincial Auditor with the discretionary authority to perform value-for-money audits on transfer payment recipients, including universities. In the case of universities, this value-for-money audit approach was to help address the management accountability of each university's administration while "at the same time respecting the academic autonomy of these institutions."

In our consultations and discussions across the province throughout the last three months, the view has been strongly expressed by each university that we should move forward to the implementation of your recommendation 10 instead of, and not in addition to, your recommendation 9.

Also, I would mention that in our hearings across the province we have received little evidence of any general dissatisfaction with our university system. However, we did not have the budget to conduct any formal survey on this matter. I would note, however, that Maclean's magazine did survey 500 students across the country who indicated a reasonably high level of satisfaction with their education.

In our issues paper we are suggesting that the governing boards be the main vehicles of accountability. The boards, because of their membership, can be viewed as the interface between the stakeholders and the institution itself. The board is clearly the primary agent of institutional accountability. Boards must be appropriately representative of the external community. I know you are aware of the separate initiative of the ministry arriving out of the Stephen Lewis which recommended that "we examine carefully the representative nature of boards which govern both colleges and universities so that they reflect the changed society of Ontario." The task force will also be commenting on that matter.

We are examining the duties of boards and ways of improving their effectiveness, keeping in mind that they consist of unpaid volunteers. Our issues paper also suggests that the activities of boards should be monitored by an outside agency, and this has been an important matter in our consultation.

Some have described the proposals we put in the issues paper for discussion purposes as a form of monitored self-regulation.

We are just at the point of completing our consultation process and must now consider our final recommendations.

I hope you had an opportunity to peruse our issues paper. What we would like to do in the time available this morning is have your comments on the issues we have raised and try to answer any questions you have about the task force.

I would emphasize that the task force still has to deliberate and formulate its final recommendations, and your comments will be most useful to us in this regard.

The Chair: Thank you. Does anyone else want to make some comments before we get into questions and answers?

Mr Broadhurst: It's over to you, sir, and your committee.

Mr David Tilson (Dufferin-Peel): I guess the oversimplification issue, which at least from my perspective is that if a government such as the province of Ontario is providing funding to a university -- let me start again.

The question, of course, that you have asked and that we're all asking is how can a university maintain its autonomy? The difficulty I have -- I happen to be a member of the opposition, but as a member of this Legislature -- is that a provincial government must in turn be accountable to the taxpayers, who are paying substantial amounts of funding to universities.

Therefore, I guess one asks the question, how much should a government know as to the financial operation of a university, in whatever capacity? Once a university asks for public funding, then by doing that, is it not losing some of its autonomy? I don't see how you can avoid that.

Mr Broadhurst: I think my answer to that would start with the boards themselves and the changes that are likely to occur in the composition of boards as a result of the specific examination of that question. In other words, I think you will find that in the next few years, and starting fairly soon, the boards will become more representative of the publics they serve, obviously including the taxpayers of Ontario. We see that the board will have a prime responsibility to police the accountability for the transfer payment and all the other funding, the substantial research grants.

We see that there is a monitoring required, and that gets to your point. We suggest, though, that the monitoring agency follow some of the other principles that relate to the government and the university system and be related to the buffer body, the Ontario Council of University Affairs. But we see the necessity for the procedures being followed by each board in its accountability to be monitored on a cyclical basis by a group from outside that board, but a group related to the Ontario Council of University Affairs. We have not yet fully developed that recommendation, but that's why I mentioned that we see the monitoring as an important element.


Another way of doing it, of course, would be to have some monitoring conducted by the Provincial Auditor. We see that if it is the wish of this committee, and it was expressed in your resolution to maintain the autonomous nature of universities, it would be better to have the monitoring done by a body related to the buffer group.

Mr Tilson: The difficulty, and the real crunch of it, is that if a university is asking a provincial government for funding of any sort, taxpayers' money, then I believe that provincial governments should be entitled to know what that money is going to be used for, and I therefore question what else the government is entitled to know.

For example, the university could divert its funding from other sources, private sources, foundations, whatever, to other funding and say, "Well, that's none of your business," but the difficulty is when you're looking at the overall package as to how a university is being run.

I think it would be a terrible thing if the government started coming in and telling a university how to run its business. Don't misunderstand me. I'm simply asking that initial premise that when a university is asking for substantial funding from a government, then surely the Provincial Auditor should be entitled to look at all operations of the university, because that funding may directly and indirectly affect the quantum of the grants, the quantum of the funding, what the funding is going to be used for, all those issues.

I know you start talking about boards, and that terrifies me, particularly when this latest government initiative starts talking about quota systems and all kinds of other things that I don't understand, quite frankly. I don't understand the rationale behind all that. You talk about interference of government. I don't want to get into that or you'll get me upset. Let's talk about the Provincial Auditor: How much should the Provincial Auditor look at when looking at the funding of a university?

Mr Broadhurst: During the consultation process, we didn't detect any opposition to the Provincial Auditor doing inspection or financial audits through the various components of the university. What we did detect was some real concern about trying to judge, through the Office of the Provincial Auditor, the efficiency of the academic process and the effectiveness of the academic process. So my comments related to the Provincial Auditor relate to the value-for-money concept, which is efficiency and effectiveness. How that can be brought to bear without being brought to bear on the academic process is what we are really debating among ourselves.

But as I say, there's no question about the Provincial Auditor even perhaps having expanded powers to go into the various funds at a university other than the operating grants, which is a point that you have raised in your report. We're really talking value-for-money audit, not inspection audits or what I would call normal financial audits.

Mr Tilson: I think Mr Cousens has a question.

The Chair: Mr Cousens, and then we'll move to the government for an uninterrupted 20 minutes.

Mr W. Donald Cousens (Markham): Philosophy is one thing, practical reality is another. When the auditor was making his assessment of, certainly, the University of Toronto, it raised a lot of questions. There was heavy reluctance on the part of that particular university to cooperate and to bring forward data that I think should be brought in.

I'm with David philosophically, but I'm really concerned that the universities have had such free rein with taxpayers' money, where they can go and divert funds from provincial treasuries to specialized programs, and I had the sense that this was happening with the University of Toronto. I may be wrong, but there was no way of knowing what was happening, because it was such a well-protected and -- I want to use careful words here, because it is an open meeting -- but it was almost impossible to get an accurate audit of what was going on within that institution.

As an outside agency, maybe there should be some way, if we're going to talk about an institution being accountable unto itself, that there would be a set of guidelines that require it to at least be totally forthcoming to its existing board members, because I had a sense that even the board members on that university may not have known all that was hidden within the different sets of books.

Mr Broadhurst: In our open hearing with the University of Toronto, this point of access and the transfer of funds from one fund to another within the university itself did come up. I will ask Dr Lang to say a word on this, because that is his university, but my understanding of what the president of the University of Toronto said at that time was that if the legislation provided for it, he would be quite happy to make all the funds available to the Provincial Auditor.

I'm not a lawyer, but as I understand, the concern he had expressed or they had expressed was related to what is authorized by an act at the present time and what was required, but I don't detect that there was any opposition to expanding the authority to look at the various funds within the university so that if money is transferred from one to the other, you're looking at both sides of it, the exit of the money from one fund and its entry into another and what happens to it in the other fund, be it a capital fund or an endowment fund or any other special fund they may have.

Mr Tilson: Including all funds, foundation funds --

Mr Broadhurst: That was my understanding of the answer, and we're talking now of financial audits, to see that the moneys are being spent in accordance with authorities and this type of thing. Dan?

Dr Lang: That's entirely correct. That is, it was our view -- it was the view of Trent and Guelph as well -- that the Provincial Auditor was asking for information which the existing act didn't give him access to. If the act were changed to include the sorts of concerns you're speaking about, the University of Toronto has been on record from the start as saying that we would be glad to comply with it.

As far as what the governing council of the University of Toronto has received, I believe that the task force has gotten a report from the council, quite extensively, which shows that all the funds are reported to the governing council fully and have been for some time.

Mr Cousens: That's good. I guess when you're sitting where we are and not having the full picture -- and maybe the law today as it is reflected in the relationship between universities and the province of Ontario hasn't kept pace with the changing demands for public access to information.

I mean, we've seen this happen now with pretty well every form of government, and when the auditor made his inquiries, at the University of Toronto in particular, which is my alma mater as well, I was hurt and offended that in fact the reluctance on the part of the university was so strong. "Wait for the law to be changed."

You know and I know that it takes years for any law to be changed, especially as it deals with a matter such as this. It takes a long, long time. Yet society is changing, the demands are changing, and what I have sensed coming back, and even in the presentation this morning, is a certain amount of: "Okay, we'll be legalistic. We'll hold the line. We'll do it if we have to and when we're told to."

I have two or three thoughts that come out of this one, and one has to do with, as this task force is coming up, I would hope you come forward with some very far-reaching recommendations that show how there can be fuller public accountability on the funding processes, so that if you're forthcoming in how that's going to be, it wouldn't be necessary for guys like me in the Ontario Legislature to legislate it, and if you would show a sense of goodwill, good faith and openness, which I personally have not seen and do not like.

At some point in the future, I would certainly be watching the universities and would say -- I have two kids in university right now. I want them to get the best education possible. But I have genuine and deep concerns that moneys that are going to the universities may not be spent where they should be and that in fact they may be richer than they say they are and that the public isn't being totally served by the processes in place.

Maybe you could comment on better accountability at the universities and your recommendations that would lead to that so that guys like me will go to bed and concentrate on dumps over in Markham and Pickering and stuff.


Mr Tilson: That's where the action is.

Mr Cousens: I look for garbage anywhere.

Mr Broadhurst: Just one further comment on Mr Tilson's question. Your recommendation 18 -- we just touched on this -- says, "The minister shall require that universities submit a detailed report to the ministry on the use of government funds transferred to a restricted fund."

Then it says, "Amendments to the Audit Act shall permit the Provincial Auditor to have access to restricted accounts," and adds these words, "through value-for-money audits." Those words aren't necessary. If you stopped at "restricted accounts" I think you would achieve a fair amount of what you've been talking about. As I say, in the hearings I didn't detect any problems if it stopped there.

On the question that Mr Cousens has raised, that is precisely the focus of this exercise, to try to see what we could do to have more visible accountability, and we use the word "transparent" and these kinds of things. That's what we're going to be considering in detail over the next two or three months, moving to our final report.

Mr Tilson: Do we have any more time?

The Chair: You have almost nine minutes, Mr Tilson, and the government gets 20 minutes.

Mr Tilson: The issue of value for money, of course -- I put those words in; I can see you're concerned about that because that does affect your autonomy. Mr Cousens's remarks are quite proper, particularly when we all know this new Audit Act -- I mean, I've been sitting in this place for over two years and during that time we've been talking about this new Audit Act and that's all I've ever seen of it. It'll probably be another two years before it even reaches the floor of the House. Therefore Mr Cousens's comments are quite valid.

As well, I believe I would like to hear your thoughts, a further elaboration in response to Mr Cousens's questions, because we're now getting to the whole issue of whether or not you have any aversion to the issue of value-for-money audits.

Mr Broadhurst: I think one of my problems -- I can't speak for the task force at the moment, but one of my problems, and I was an auditor all my life, for 40 years -- is understanding how an institution, either the institution itself or an auditor coming into the institution, would measure the effectiveness of an education exercise.

There are suggestions as to things that might be done. For example, we're studying carefully the report that Stuart Smith made. It was a Commission of Inquiry on Canadian University Education. He has some recommendations in there related to the possible use of certain performance indicators as guides to this. We are looking at those. We are looking at the performance indicators used in the Maclean's survey. Dr Lang is heading up a subcommittee for the task force looking at the issue of performance indicators in general to see if there are some of these that could be used in dealing with this issue of how effective this operation is and how efficient is it.

As you can appreciate, these become highly subjective matters and matters that aren't well defined in the literature and there's a lot of study of this subject going on. We've only looked at the Anglo-Saxon jurisdictions: United Kingdom, United States and Australia. There are mountains of literature on this subject but not too many definitive answers where people feel they've really got the answer. I'm not sure we'll come up with the answer either, but we hope we'll come up with something that's improved over what's presently available.

Mr Tilson: Mr Broadhurst, I wasn't present for the hearings of this committee when this subject was discussed, but I did attend one or two of them towards the end and one of the examples that sticks out in my mind was the example of where funding could be used, for example, for research or particular professors developing something in research, as opposed to using that funding for the general education of students. That whole issue, which does get into the subject of what the real autonomy of the university is -- the university may say, "Yes, we want this particular area developed. We need research on this subject," whereas the Provincial Auditor may come in and say no. It's going to get worse. Already the latest announcement of no more grants for students, to just make it a little harder for people to achieve a university education -- there are all kinds of outside factors that create concerns like that.

I guess that was one question that was raised, and I understand the dilemma, which gets back to my very first question: Once an institution such as a university asks for public funding, it may have to give up some, if not substantial, autonomy. I think the taxpayer is entitled to believe that this funding is going in the proper direction as the government sees fit. Otherwise, if the university wants that complete autonomy -- I give that simple example -- then does it have a right to ask for taxpayers' funding?

Mr Broadhurst: I think the view has been expressed to us from a number of sources that, really, it is important for the university to be more accountable in order to protect that autonomy; that if they aren't more accountable themselves, then the issue of losing some of that autonomy is right on the table. The impetus to this exercise will then be to become more accountable themselves.

Mr Tilson: The last thing I want are these people to come in and start telling you how to run a university, and I understand that, but there is a concern. Mr Cousens, I think, has a comment.

Mr Cousens: I'm looking at the announcement of your task force on November 28, 1991, and I see the terms of reference you have as a task force. Could I get some feedback from you as to your willingness or the degree to which you would be prepared to sit down with Mr Otterman, or the new Provincial Auditor, to see how the issues that came through our discussions could be addressed in your report so that you're not doing it in isolation of the thinking and the thoughts that we went through in coming up with our recommendations?

Mr Broadhurst: Mr Cousens, one of the first things we did when we got ourselves organized was arrange for and hold a meeting with Mr Otterman and the members of his staff who had been involved in one or more of their inspection audits of the three universities, and most of the task force members were able to be present.

We spent an afternoon with Mr Otterman discussing these issues, much as we're just discussing now, and he told us some of the things that he had seen that he thought were working well and some of the things that weren't working well. For example, he referred to the review of graduate programs. There is a formal review of graduate programs going on. He had attended a session about those, and he said if there was something similar to that on undergraduate programs, it would help him feel better. So we did have a good dialogue with Mr Otterman on this subject, and it was most helpful to us.

Mr Cousens: Could I ask if there is any way, when you're coming through and you reach your final recommendations -- I guess there are two ways it can be done. It could be done if you would follow through on my suggestion of accountability by the universities themselves; and, if before you come through with your final recommendations you have another opportunity to review your findings with the auditor just to see that you've got the sharpness that maybe some of us in the Legislature are looking for, that will relieve an awful lot of my concerns, if I can come back to the Provincial Auditor and have a sense that he is satisfied that the university is going to be doing a self-review of these matters.

Mr Broadhurst: Mr Cousens, we'll certainly take that recommendation back to the next meeting of the task force, which is just a couple of weeks from now. It's a matter that we'll have to think seriously about.

The Chair: Okay, thank you. We have a long list. Mr O'Connor.


Mr Larry O'Connor (Durham-York): Thank you for coming here and sharing your preliminary findings with this committee. I know, when we sat through the committee hearings a year ago prior to making our recommendations, there was discussion that was taken very seriously by all sides of this committee room and was about as non-partisan as I've seen anything, and have yet to see again, as far as a committee approach to things.

One of the areas that I know we had a great deal of discussion about was the value for money, and we can recognize the wishes of the universities for their autonomy, that they'd like to keep that as much as possible within themselves. So I guess it then takes a look at the need for perhaps changes to the board representation. Were there any recommendations as you travelled, putting together your information and talking to folks at the universities, a concern about changes to the boards? Were there any suggestions as to how it could possibly be made more representative of the community in which they serve, both physically and academically?

Mr Broadhurst: Mr O'Connor, as you may know, the ministry has had an ongoing process over, I think, maybe two years obtaining information about the composition of boards and looking at them, and when the Stephen Lewis report came forward in May or June of this year, that initiative was put on a higher priority. So in the middle of October the ministry distributed to all those interested in the system a memo suggesting some guidelines on this subject that you've just raised, that he would like feedback from the universities on by about the middle of December.

Now, we had originally intended to have that kind of thing in our task force report also. But what we are doing as a task force is commenting on that one specific question, the composition of boards, by the same deadline in December, by letter. We'll be sending the minister a letter from the task force, just as all the universities will be sending letters, on his recommendations.

We do see some changes in the representative nature of the boards being appropriate, and I hesitate to go much farther because we've been looking at this as recently as yesterday. So it's an ongoing process of preparing our letter to the minister in answer to his request, but I do see changes in the official composition of boards.

Mr O'Connor: In going through your report, on page 23, the university community, you talk about some of the difficulties and decisions around deficit financing, salary levels, size of facilities, support staff etc. I know that during our discussion there a year ago that was one of the issues we had talked about, I guess, with the universities that the Provincial Auditor did take a look at. There were some points that certainly raised the eyebrows of the committee around some of the administration and the cost of the administration.

I just wondered if, through your discussions, it was pointed out that there needed to be any more or less openness in the approach taken as far as disclosure of some of the remuneration at the upper levels, or the benefits. I'm trying to be careful on how I word this because I don't want to upset anybody, but I know that was part of the discussion that we did have at that time.

Mr Broadhurst: There was certainly discussion, and the issue was put forward by many people for the provision of more information. But I think they also realized that it had to be meaningful information. You can put out so much information that people don't understand it. So our approach is to try to suggest that the information be put out, be understandable and mean something to people; that rather than quantity, it be quality.

On the other issue you've mentioned, we haven't heard any significant amount of concern being expressed about full disclosure, for example, in a Securities and Exchange Commission mode about executive salaries, of that nature. That is not what I heard, and I was at each of the universities myself. That was not an issue that was presented to us as a major issue.

Mr O'Connor: It was something that was pointed out to us by the auditor at the time.

I guess the final thing that I'd like to touch on would be the funds and assets that are purchased through some of the foundations and funds. I know that universities do have a remarkable ability to raise funds, and so they should, so that they can continue to offer new programs and programs that are going to be as current as possible. Then the assets purchased through some of the funds raised -- and we got into the whole discussion around dollars transferred from capital transfers from the province and how some of that interlinked, yet we couldn't see any defined way of actually showing where the dollars had gone and not gone, recognizing of course that the universities do have the autonomy.

Mr Broadhurst: That is not unlike a question, I think, that Mr Tilson was raising. As I said, we didn't detect any people who were concerned about the Audit Act being amended to provide that the Provincial Auditor could do financial audits -- I call them financial audits -- on all the funds within a university so that if money was transferred from one fund to another you could see it moving and you could see what happened to it. The concern was expressed if it got into this concept of trying to deal with the efficiency of the academic exercise in the course of that, because no one is precisely sure how you measure that properly, it's so highly subjective. That is the dilemma that I mentioned right from the beginning and we're spending most of our time on.

The Chair: We were just having a brief discussion here, because this matter of value-for-money audits keeps coming up and I keep hearing that it's not a problem to have audits but that you don't want a value-for-money audit. I know that since 1978 value-for-money audits on the whole array of programs administered by the province of Ontario have been done. This is done at the national level and in other legislatures. A lot of money goes to colleges and universities. That's why the committee is so concerned. We're going to have to deal with that important matter, value-for-money audits.

Mr Paul R. Johnson (Prince Edward-Lennox-South Hastings): It's kind of difficult to ask, as many of the questions or concerns that we are concerned about have been raised already, and I don't want to be repetitious or redundant, but is there a common concern from the people you've talked to so far -- the boards of governors, for example? Is there any common concern with regard to, as the Chair has said, the value-for-money audit and how that will affect the administration? I guess it affects the administration in some ways and programs to some degree. Again, I know that this tends to get somewhat repetitious, but I was just wondering if we could focus on a common concern that you may have heard.

Mr Broadhurst: We did meet, in the course of our visits to each institution, with each president and, with two exceptions, with each board chairman -- in those cases we met with vice-chairmen -- and I think there was virtually unanimous concern about the value-for-money audit in the context of the university and its autonomy in its academic exercise.

There was, though, substantial agreement that accountability was a review that had to be made and had to be taken seriously, as I said earlier, to protect the autonomy. If the institutions were not seen as being properly accountable, then it wouldn't take long before they would lose a measure of this autonomy. In order to protect that, they would have to be more visibly accountable. These are the issues we are trying to deal with in a way that, as I said earlier, is monitored through the boards themselves. After all, a large percentage of the board are members of the public; with two exceptions, every board has a substantial majority of people from outside the institution. I think that will continue to be the case. It has to be the case, as far as I can see.

There is a large measure of public input into the board. If they become more representative, then it should be even more appropriate for that board to be asking these questions, and that's what we're suggesting. We're not suggesting that the answers will be easy, but we think there can be some improvements and we're trying to examine the areas where we can be helpful to the boards in achieving that. Maybe after a cycle of whatever we come up with -- and Mr Cousens's suggestion about talking to the Provincial Auditor along the way I think is a good one -- the Provincial Auditor can then express his views as to what he is now seeing and whether there have been improvements and this kind of thing.

It's fear of the unknown and the fact that there don't seem to be good measures of this economy and efficiency in effect in the teaching exercise in universities anywhere.


Mr Johnson: Wouldn't a comprehensive value-for-money audit indicate to a particular university some indication of how that particular audit would view its programs, and wouldn't that be a vehicle for the university to respond to why these programs are important, in spite of how it may be viewed as a result of a value-for-money audit?

Mr Broadhurst: It seemed to us, and it was referred to in some of the testimony before this committee by the now deputy minister in February of last year, that for a Provincial Auditor to move into this area he would in fact probably have to retain expert advice, and his expert advice would have to come from the academic field to begin to look at this. Given the autonomy and the general agreement that that's an important element, and I feel it is, wouldn't it be better to let the institutions themselves take a shot at this first? Because it's going to have to have a heavy input of academics regardless of how you do it.

As I said earlier, I've been an accountant and auditor all my life. I wouldn't want to try to tackle this without expert advice and assistance from people right in the field. So we're really suggesting here that it's the institutions themselves that can tackle this in the first round and then see what that produces.

Dr Lang would like to have a word.

Dr Lang: I think there are three different concepts being interfolded here -- one is the word "comprehensive"; then there's "value for money," which is really a process, a concept; and then there's the question of who does it, whether the Provincial Auditor -- as you take the report you're dealing with. I think each of those has to be addressed separately.

I would say that the concept of value-for-money audit certainly is the case at the university I work for, and now that we've travelled around the province I think one could safely say for all universities that it is not something anyone has any particular problem with. In fact, many universities would argue that in one way or another, given the financial difficulties we're all in, they've been having to do it in any event.

Then you move to the word "comprehensive" which connotes, I think, broad standards, that is to say, how the value of a particular program at university A would be construed to be the same as the value at university B and C and E and F and so on. I think that's actually a much more complicated and serious part of the question than value for money per se. We know, for example, from having travelled about, that what you might think are very simple concepts that must mean the same thing everywhere really do not.

One talks about accountability to the public. Well, the public, say, of Laurentian University and what might be value there in terms of value for money is really, we now know, quite different from, say, the University of Toronto. Or even at the University of Toronto -- Dr Frankford's from Scarborough -- I think the expectations of most of the parents and students who go to Scarborough College are probably quite different from the comparable expectations at the St George campus or at Erindale. I live in Scarborough myself. I don't think most people in Scarborough want Scarborough College to be just like the St George campus. In fact, if it were just like it they'd say, "Why don't we all go downtown and not have a Scarborough campus?"

I think public accountability is not well served by the word "comprehensive" if it means that value for money is going to be construed the same way for every program at every institution in the province. I think all of you should worry as much about the word "comprehensive" as one worries about the concept of value for money.

To come to the question of who does it, I think Bill Broadhurst has expressed it extraordinarily well. Value, when you get right down to the sorts of accountability that the committee is speaking about, which I personally agree with, you're not really talking about institutions; you're talking about particular programs at institutions. The approach one would take, let's say, to applying the value-for-money concept to a faculty of nursing is entirely different from the way you'd deal with it for a faculty of education or a faculty of engineering and so on and so on. And then multiply that times 15 institutions.

A reliable application of the value-for-money audit -- by "reliable" I mean it produces results that somebody's going to find credible and useful -- will necessarily require a great deal of local expertise. By "local," I'm not necessarily saying you'd confine it to a particular university. In fact, one thing our task force generally believes in is that a lot of these reviews should be conducted predominantly by external persons, and we talk about the membership of the board having external majority, but we're still talking about people with some kind of knowledge, direct expertise, in the scholastic enterprise. With all due respect, you don't normally think of accountants as being the persons on whom you would rely for that type of expertise.

That's why I'm saying that I think you've got to look at the anatomy of the whole question, not just one part of it, to ensure accountability, which we're all for.

Mr Johnson: If a value-for-money audit could be applied consistently from university to university -- I'm not saying that's possible, and in fact I suspect it probably isn't when it gets into dealing with programs -- wouldn't it, however, allow an opportunity for comparison between universities?

Dr Lang: If I can take a moment, if the Chair doesn't mind, the practical answer is yes, but I think the larger question in terms of the accountability of the university system is that you'd get a sort of ersatz measure of quality.

For example, when we were at Laurentian, we were told that a great emphasis there was placed on admitting students from the local area, regardless of their academic qualifications. A pretty standard measure, I think, that probably anybody would begin to look at in doing an accountability audit would be to ask, "What's the entering grade average of all of your students?" On the one hand, if you compared it right across the system, you'd say: "Something's wrong here. Look at the entering average of Laurentian's students. It's lower than the average for the system at large." The answer to that, of course, is that they've made a commitment to their local community that says that every qualified student who applies from northeastern Ontario ought to get a place.

That's a good thing, too, just like a high average is a good thing, so I think you need some way to punch through the sort of system-average concept of accountability so that the objectives, some of which are very virtuous, and I would think quite valuable to local communities, can be seen. If you get too comprehensive about it, you wouldn't see that. What I think to the people of the Sudbury region is a good thing would to a comprehensive audit look like a bad thing.

The Chair: Thank you very much. Two minutes, Dr Frankford.

Mr Robert Frankford (Scarborough East): You threw in Scarborough, so perhaps I should -- with the time given, I can only throw out a few thoughts. I don't believe that the Scarborough College is there to purely serve Scarborough; I believe it's part of a wider provincial system. It's certainly part of the University of Toronto and it's also part of the whole provincial system. One would hope that Scarborough is a good college that fulfils its functions in the same way that Scarborough Centenary Hospital fulfils a good health function and can account for itself, but no one would say that it's failing because it's not Toronto General Hospital.

I think there is a real challenge in assessing what you're producing in both, let's say, the hospital sector and the university sector, but I think it's not impossible, and I think it's a very interesting challenge.

I am reminded that we were interviewing candidates for the Provincial Auditor's position earlier in the summer, and at least one of the applicants said that he would like to have specialists within the Provincial Auditor's office who had ability to look at -- he mentioned the health area, but I could see the same need for education: university and primary and secondary. Perhaps I'll just let you respond, because there isn't time to go into details on what really could be a very interesting discussion.

Dr Lang: There are perhaps two parts to what Dr Frankford is saying. I think one is a matter of cost; that is, all of that expertise is going to cost something, and to the extent that you spend more money on that, you're necessarily spending less money on something else. I suppose this will sound facetious but I don't mean it that way at all. What happens when you apply the value-for-money concept to value-for-money auditing? What really is the value added of an investment of resources in that particular methodology of holding accountable, whether it's hospitals or schools or colleges or universities? That's an important and very legitimate question.


I don't know what the response was of the committee that was interviewing that person who wanted to be the Provincial Auditor, but I would have thought a corollary question would be, "How much do you think it's going to cost?" What's the pricetag for that type of expertise? Then you compare that pricetag to what value you think would be derived from it.

I think the second point -- and I think this is a question our task force is dealing with, and it's mentioned in the interim report -- is that it's not as if that sort of expertise doesn't exist at all at various levels of government. It does. In our interim report, for example, there's a suggestion that the Ontario Council on University Affairs might perform the role of what the task force has taken to call the "independent monitoring agency." That's been a topic of considerable debate as the task force has moved around the province. If the expertise is there, what rationale would one have for investing in a comparable expertise in another branch of government? There's expertise in the Ministry of Colleges and Universities.

I think Dr Frankford's point is an excellent one with respect to the fact that you need the expertise to make it work. I don't know that there should be an automatic answer that you get back to the Office of the Provincial Auditor.

Mr Joseph Cordiano (Lawrence): What I have to say is probably more in the form of a comment than a question. You may wish to respond, but since we're running out of time I'm going to try to be brief.

When it comes to value-for-money auditing or the efforts of legislators to deal with or come to grips with questions around accountability, and not just accountability but measuring, I think this is a debate which is going to be ongoing in our society with respect to all of our institutions, particularly looking back to the taxpayer, understanding that people in our society are beginning to ask some real tough questions about a lot of things, beginning to wonder why we can't have measurements for a variety of things so that people can better understand or so that we can facilitate their understanding of what takes place in our institutions. When you look at the legal justice system, the view there by the people who run it sometimes is that there really isn't a way to measure how far we go in some of these cases. It could last for ever. The costs could amount to enormous sums.

What we're trying to say is that there is a way to be somewhat more accountable and there is a way to have some finite definition to what we do, and I think the same could be said in a variety of areas. It really comes down to a philosophical approach. If you do believe that there has to be some way of measuring what our outputs are against what preconceived expectations might be, then there has to be some way to formulate that.

I'm not suggesting that you've come here today and not understood that or aren't prepared to move in that direction, but I think we all realize we have to start doing things, because the pressures on us are much greater; we have fewer resources, and therefore, by very human nature, we come back to trying to measure results against what our expectations might have been and against what resources we have.

That's the simple logic, and for us it's quite a challenge to be able to do that in taking account of some of the things you've expressed. I wasn't here for the whole morning, but the fact that some of these things are qualitative and cannot be quantified -- I think there are ways to come up with standards over a period of time, and it can't be done overnight. We may have quite a challenge in front of us, but I think it's this committee's efforts -- at least if I may speak for myself -- that would like to see us move in that direction.

Value-for-money auditing isn't completely defined yet, and perhaps in this area it needs to be defined. As we move along, it will evolve into more defined kinds of standards which will be more acceptable to more people. After all, if it's not acceptable to the people who are using the system and managing the system, then we're never going to have the kind of cooperation which is required to get at the very kinds of things we're trying to do here.

Mr Broadhurst: Just one last comment on that. The task force is really trying to implement that in accordance with your recommendation number 10. In other words, we're not suggesting there don't need to be accountable mechanisms developed relating to economy and efficiency. We're really saying they should be developed within the institution, under the authority of the board, through the administration of that institution as opposed to being developed in some other way. We're really saying we think there should be a period of time to see if that can be done that way, and we think it can be done as well that way as the other way. But we're definitely in the same area you are in about improving the accountability for the reasons you mentioned.

Mr Cordiano: Yes, but I think we also have to have a legitimate, and I think it's quite legitimate, way of ascertaining or assessing that system which is meaningful to all. It can't be in isolation.

Mr Broadhurst: We also have in our issues paper that we're discussing this monitoring process, which in effect would presently be done perhaps under the Ontario Council on University Affairs, which is working within the ministry or under the Ministry of Colleges and Universities, so that would be the vehicle.

There would be a monitoring -- we also agree there must be a monitoring -- but it would be more in the nature of a peer review self-monitoring of people in the system itself, not monitoring their own university but working through OCUA with academic expertise, looking at what others are doing, maybe even bringing the odd person in from outside the province to look at these. We do agree with the monitoring concept; we just have it envisaged in a different way.

Mr Cordiano: I think there is a role, and I think it's very important that we have you interface with the institution of governments, that is, either through the auditor or the Ministry of Colleges and Universities, that we establish the kind of interface which would enable us to easily look at and assess what you've done in a way that's meaningful and digestible so that the public has that opportunity through this vehicle. That's all I'm trying to say. How we establish that is open to, I think, suggestion and open to working around a variety of things that you might put forward.

The Chair: Any further comments or questions by members of the committee? We have a little time left over. Did Mr Callahan have something? Mr Cousens?

Mr Cousens: At some point I have a motion that I could put on the table.

The Chair: Okay, we'll get to that motion as quickly as we can. We have time for questions. Mr O'Connor?

Mr O'Connor: I'd just like to go back, if we could, because when we first started looking at the Provincial Auditor's report, one of the things that was of concern was the whole administration cost and trying to see if there was a way we could have some accountability in the way some of those practices are carried out. I just wonder if maybe you could elaborate a little bit on what you said earlier.


Mr Broadhurst: As far as I know, and this is from reading your prior Hansard on this subject, it seems to me that the individual matters brought forward by the Provincial Auditor related to one or more of the universities that the inspection audits were done on have been and are being addressed by those universities.

One matter that occupied a lot of time was the enrolment and that was addressed at the system level. Some of the other matters -- I'm sure the individual board chairmen and presidents would take quite seriously the comments of the Provincial Auditor and the comments of this committee. I'm sure Mr Stackhouse, as chairman of trustees of Queen's, would pay very close attention to comments that the Provincial Auditor and the committee made on that type of concern.

Even the very existence of this task force, I think, in going around and speaking to a lot of people, just sort of raises the level of the subject a little higher. Having spoken to all the components of the university, internal and external, meaning boards and presidents and faculties and students, I think the issue of accountability has much more visibility now than it had 12 months ago, and we hope we can come up with some useful recommendations in our report to facilitate that.

Mr O'Connor: My concern is somewhat around the deficit financing, some of the problems related there, and some of the high administration costs and what not.

Mr Broadhurst: I'm afraid I'm not aware enough of the high administration costs you're referring to to be any use to you.

Mr O'Connor: If we go back to the Provincial Auditor's report, he mentioned some of the golden handshakes that seemed to be somewhat common and some of the practices in retaining some of the presidents and what not, and it seemed to be somewhat excessive. I just wondered if that was commented on at all while the task force was travelling and when you were then travelling. Who would you have been speaking to that may even have a concern about some of that?

Mr Broadhurst: We had open meetings at each university, so anyone who wished to came, and we tried to answer any questions we could have. I must say the two matters you were referring to that were addressed by your committee were not raised with us in either of those two universities or any other university during our open hearings.

Mr O'Connor: In advertising for your hearings, then, how would you go about letting the public know within the hospital setting that you were coming?

Mr Broadhurst: Well, this committee is a very low-budget committee -- sometimes I'm tempted to say no-budget -- so we did not advertise. The advertising was done basically within the university community and we had representatives from all parts of that. We did not have public representation. We did see some municipal officials who may have had an association with a board, and in a couple of cases they came and asked questions, but that was perhaps because of an existing association.

When I say "public hearings," I meant they were open to anybody to come, but we didn't advertise them in newspapers. We sent as many of these out as we could to anybody who wanted them. They weren't really bestsellers. We did our best to broadcast what we were doing and to listen to those who were expressing an interest.

Mr O'Connor: Do you think there could have been a reluctance on the part of some people to come to an open forum like that to address some concerns? They may feel under a little bit of pressure, that if they were to be frank and forthcoming with information --

Mr Broadhurst: Yes. We did offer, and some took advantage of this, any recognized body on campus, any recognized student group, faculty group, to have a session in private and we had several private sessions with faculty groups, just faculty groups and student groups, and one or two with staff association groups. So we did speak to them in private at their request.

Mr O'Connor: Thank you. I defer to my colleague.

The Chair: Just one second. Mr Callahan, did you have some questions on this matter too? Do you have any idea how long you might be? I'm trying to divide up the time here.

Mr Robert V. Callahan (Brampton South): Not very long.

The Chair: Not very long. Well --

Mr Callahan: Of course, I usually lie a lot, but --

The Chair: How about one question from Mr Duignan and then a couple of questions from you. That may even it all up.

Mr Callahan: Sure.

Mr Noel Duignan (Halton North): Very briefly, I was wondering, just looking at the auditor's report from last year -- and I wasn't a permanent member of this committee at that time -- has the committee looked at the auditor's conclusions and findings on pages 58, 59 and 60, and what have they done about it? Have they done any follow-up, especially around the whole question of assets?

For example, the University of Toronto stated that over one third of the assets we selected from the listing could not be accounted for or were no longer university property. Has the task force looked at the whole question of assets and how they're accounted for in the universities?

Mr Broadhurst: The task force has not made a specific examination of any of those examples other than to read just what you have read and to discuss them briefly among ourselves. We are interested in this issue of what assets you record and where the cost benefit is of recording assets. There's a breaking point below which you spend more money recording than you do in protecting. We will be making some mention of that, although within the overall framework of accountability.

That's more a financial accounting point we see, and there are debates within not only universities, there are much broader debates in the private sector as to how much money you spend on recording individual assets of relatively small value. It's the issue of cost benefit. It's not a high-level priority for us, that specific item, but we are aware of it.

Mr Stackhouse: Could I add something to that? Within my own university and the audit committee of our board, we've had quite a few discussions about how you best control assets through record-keeping and other means and we commissioned our internal auditors at the university to study that whole area within Queen's University to be satisfied that we do have adequate controls over the assets, especially those kinds of assets that can get up and walk away very easily. As one of the universities, I can say that we certainly saw what the Provincial Auditor had to say in his audits of other universities and reacted within our own university in that way, and I suspect that has happened in other universities too.

Mr Callahan: I suppose one of the issues we groped with was the question of -- and I hate to say this, because my alma mater is the University of Toronto -- we found that there were significant assets the auditor really had no access to.

Having said that, that's a very sensitive issue, because I know a lot of people who leave money in their estates to their alma mater might be very reluctant to do that if they felt that the government of the day was going to get its tentacles into it.

But it was almost indicated by the auditor that the denial of being able to do this (1) whets his appetite of suspicion, obviously, and (2) there was some concern that funds that were being paid and weren't used perhaps were finding their way into these little pockets that couldn't be examined.

I hope you people will be looking very closely at this, because I think to the letter of everybody on this committee at that time, and I would hope that they're of the same bent now, we want to be very certain that we don't interfere with the autonomous nature of universities. I think it's very important that they be able to continue with that autonomy.

But at the same time, we want to ensure that the quality of education and accessibility of education to young people is not going to be restricted because one university that's cash-fat is getting perhaps an equal share of the pie in competition with universities that don't have that access to the pot or these additional funds. I would urge you that that's something that should be looked at very carefully.

I'll tell you quite frankly that I think the availability of university, and the community colleges, for our young people today is so important for them to be able to compete that we would want to see that very carefully looked at. Even as an opposition party I say that. You'd think I'd be here trying to crucify the government, but I think that's important.


Mr Broadhurst: In responding earlier to a somewhat similar question, I was looking for a document which I've now found. One of the task force documents is a letter from President Prichard to Professor Graham, the president of the faculty association, then of the Ontario association, and he says in part: "I have no objection to amending the Provincial Auditor's statutory mandate to extend it to operating funds that are transferred to restricted funds. Indeed, I want to endorse such a decision."

Mr Callahan: What's the date of that letter?

Mr Broadhurst: This letter is dated April 15, 1992. It's basically an internal letter within the University of Toronto, but it was tabled with the task force and it is now one of our documents.

Mr Callahan: Can we have a copy of that? We'd like a copy of that.

Mr Broadhurst: Certainly.

Mr Callahan: I think it would be of some importance to the committee. If I could ask just --

The Chair: Just one more question.

Mr Broadhurst: Dr Lang had mentioned earlier that, given the statutory authority, the University of Toronto would not object to the auditor's financial or inspection audits being extended to these areas. The issue centred around comprehensive and value for money, really.

Mr Callahan: If I could just put one more oar in the water, it probably is outside of what you gentlemen are doing in this commission, but it's come to my attention that universities -- and I understand that this is out of the minister's hands -- tend to have an unwritten rule or a written rule about young people who miss their year being required to wait out of the university for a period of two years. I raised this issue with the Minister of Colleges and Universities.

There are people out there, probably a very large degree of our young people, who have the invisible disability: They're learning disabled. I can understand the reason for that rule for the kids that flunk out by their actions of whatever course, of not wanting to get an education, but I think it's a rule that requires a good deal of flexibility in terms of kids with --

The Chair: Mr Callahan, I think we're over time on this.

Mr Callahan: It's just a statement.

The Chair: I see. I thought you were going to --

Mr Callahan: That's fine. It's just a statement. I'm putting it on the record and I'd like that to be addressed, because I've not received any word back from either the Premier or the minister that this in fact has taken place, that there's been a change in attitude, and I think it makes a lot of sense. There are a lot of kids who are learning disabled who, through no fault of their own --

The Chair: This is a sensitive subject.

Mr Callahan: -- miss their year and are not able to get back into university. I think those are the kids that deserve it far more than the kids who, if I can use the vernacular, screw around and get thrown out of the universities. So I hope that this would be taken back to the appropriate bodies to be considered.

The Chair: I'm sure that's not quite what the task force is investigating --

Mr Callahan: I appreciate that.

The Chair: -- but it's a good point none the less, Mr Callahan, and I'm sure the people before us have taken it very seriously.

I want to thank you, Mr Broadhurst and the Task Force on University Accountability, for appearing before us today and for giving us your thoughts and views on the information that you've collected so far. I believe this committee is going to continue in its work in this regard, and we hope to work with you and have your full cooperation.

Mr Broadhurst: I just wanted to thank you very much for your time, interest and comments. We have many of our people with us and we'll be taking them back to our deliberations.

Mr Cousens: I'd like to make a motion that the public accounts legislative researcher review the final report of the Task Force on University Accountability and report to the standing committee on public accounts to inform members on how the task force has responded to the concerns raised by the committee and the Provincial Auditor and that this report be tabled for the committee's consideration within one month following the task force report or as soon thereafter as is possible. The reason for this motion is purely so that we won't forget about this.

Mr Johnson: He was going to do that anyway.

Mr Cousens: But it's on the record. It signals to the task force that we will continue to monitor this and we have it as an element. It's a subject of importance. I would be most pleased if we were just able to do it. If it turns out that the report satisfies the concerns that have been raised, then we wouldn't even have to debate it in committee, but at least we'll know that we're looking at it and they'll know that we're following up on it.

The Chair: Any further debate on Mr Cousens's motion? All in favour? Opposed. Carried. Thank you, Mr Cousens.


The Chair: We have a number of other things we are going to have to deal with between now and the next 35 minutes. We have a motion which we received notice of last week from Mr Cordiano in regard to the Workers' Compensation Board plan to move to a new head office. When we're finished dealing with Mr Cordiano's motion, I have a list of things that I want to discuss with the committee in regard to our work during the intersession. I also see Mr Duignan has a matter he wants to raise.

Mr Duignan: Just on the motion, Mr Chairman.

The Chair: I think Mr Cordiano gave us notice of motion last week. It would be appropriate if he would move his motion and then we'll begin discussion on Mr Cordiano's motion.

Mr Cordiano: I move that consideration be given to my motion. Is it open for discussion and debate at this time?

The Chair: Mr Cordiano moves that the Provincial Auditor review the Workers' Compensation Board's plans to build a $200-million office tower to serve as their new headquarters. As part of this consideration, the auditor should examine whether this is good value for money in light of the fact that it would cost $380 per square foot of this new office space at a time when there's 27 million square feet of available space at an average cost of $20 per square foot in Toronto.

Any discussion?

Mr Cordiano: Could I make some opening remarks?

The Chair: Yes. I looked to you, I didn't see you.

Mr Cordiano: I'm sorry. I just want to open the discussion with these comments. I think this is a fundamentally important question to us all, regardless of what side of the House we sit on. I think this question would be one of the most important things we have to deal with with respect to understanding the scope and the breadth of difficulty that exists in the public mind with respect to public expenditures at a time when it's very difficult for people and businesses throughout the province to understand why at various times their WCB rates have increased and the costs have escalated enormously in at least the last five years.


Mr Cordiano: Whatever. The final payment is made by the person who's assessed, the businesses that are assessed out there, and I think they would want to have some accounting as to the decision that was taken here. I think it's perfectly legitimate for us to look into this matter, for the WCB and its officers to come before us and explain the decision that has been taken, if it's a satisfactory decision, if it meets with value-for-money kind of decision-making, and answer a series of questions that I and, I'm sure, all members of the committee will have with respect to the economic justification for this decision at this difficult time in our economy when expenditures of this kind are difficult to justify. I leave it for your consideration.

Mr Duignan: Just to save time -- I know this committee has a number of other issues to discuss this morning -- our side has no objections to this motion.

Mr Cousens: I have just a couple of points I want to put on the record because I don't think that one can isolate a decision that is being made by the Workers' Compensation Board from all the other economic considerations that are going on in the province of Ontario. Everything has to be somehow put in the balance so that we're able to see that the total costs of running this province and providing the services are being assessed and analysed, and we as the public accounts committee are especially concerned that any dollar that's spent has to be carefully justified.

I am concerned that we're seeing a rally outside the Legislature at noonhour today for the developmentally handicapped. York South Children with Learning Disabilities will be there, and many others concerned with the cutbacks to the developmentally handicapped. That greatly worries me. I see education dollars becoming very limited, and grants for students, so the people services which really the WCB is all about cannot be separated off one from the other. Operating costs are being hurt and these capital costs certainly have to be held in line. I see that as part of the equation.

The other thing that has to be looked at is that unfunded liability of the Workers' Compensation Board is in the billions of dollars now. It's $8 billion to $9 billion unfunded liability, and now we're in the process of looking at the possibility of constructing a headquarters for the Workers' Compensation Board when the cost for that is $380 per square foot when you can rent existing space in the greater Toronto area for $20 a square foot, and probably even less in Markham. There might be certain advantages about coming up to Markham, because we've got space there that could be very worthwhile.

Mr Johnson: Less in Prince Edward county.


Mr Cousens: And less in Prince -- oh, my goodness, and probably they'd give it away in some other areas. The concern I have is that this is a very worthwhile motion, and I do support Mr Cordiano in bringing it forward. I sincerely hope that it is a way for the WCB to stop and reflect on what it's doing and face the fact that the Legislature is not blind to what's going on there. We are very alert and aware of these concerns and are prepared to do something about it. So I compliment Mr Cordiano.

The Chair: Thank you. Mr Duignan and then Mr Hayes.

Mr Duignan: Very briefly, we on this side are supporting the motion. We are concerned about the cost of the move of the WCB as well.

Mr Pat Hayes (Essex-Kent): Actually, there are a couple of quick questions I'd like to ask probably the auditor. Was there an auditor's report on this here, or an audit done on the workers' comp recently?

Mr Jim Otterman: There's no audit done specifically relating to this issue.

Mr Hayes: Not specifically relating to that, but there was.

Mr Otterman: No. Every year the board is audited by a public accounting firm that is appointed by the Lieutenant Governor in Council. They do the normal financial test opinion on the financial statements, it's presented to us, we do a reliance review and then that opinion is issued. They also engage either the same external audit firm or another firm to carry out a value-for-money audit of a particular segment of the operation, and I'm not sure where they stand on that for this year and what area they're actually looking at.

Mr Hayes: Okay. I just want to say that, yes, we can support this particular motion. I think it would hopefully clear the air, because I'm not totally convinced that Mr Cordiano's facts, as presented on this piece of paper, are facts indeed. Maybe the move is a good move possibly, because I understand there is a certain investment there, that the comp board would actually be getting some revenue back out of it. So at this particular time I think we can support this.

The other question I guess I have is, how would this work? Would the auditor go ahead and deal with this and then would we bring in, say, the board members?

Mr Otterman: The auditor would table the report before the committee, we would review it and then we would decide to carry on.

Mr Hayes: We look at the report and then if we felt it necessary to do that we would do that. Yes, okay, thank you.

The Chair: Thank you. Any further discussion? All in favour of Mr Cordiano's motion? Opposed? The motion's carried. Thank you, committee, for this quick disposition of that matter.

The Chair: Now the matter of the intersession and the work that's building up because of the numerous activities of this committee and the Provincial Auditor. I've made a short list.

We asked for a special report on the operations of the registrar general; we've now asked for a special report on the proposed move and proposed new headquarters of the Workers' Compensation Board; we're in the middle of the Toronto General Hospital review; we've asked the auditor to conduct an audit in the Office of the Ombudsman; the government and ourselves are in the middle of discussions regarding the review of the Audit Act; and the annual report of the Provincial Auditor will be out very shortly.

I believe we had asked the auditor to focus on non-profit housing, and there's going to be a section in the annual report about non-profit housing at our request, and then I'm sure there are going to be other important items recorded in the auditor's annual report that may be of interest to this committee.

So that gives us a minimum of six items that we have ongoing. I would suggest to the committee that it would not be appropriate to allow all of these items to sit idle until the Legislature reconvenes some time at the end of March. I believe we should take a number of these items, schedule them for the intersession and try to clean up as much of this ongoing work as possible.

We have Mr Duignan and then Mr Cousens.

Mr Duignan: I agree, Mr Chair. Maybe the subcommittee can meet and go over the list and make a recommendation back to the committee.

The Chair: I have not had good experience with the subcommittee. Every time we have a subcommittee report, it is either overturned or members are unhappy or we have to redo the whole thing. I've told the clerk I'm not convening any further subcommittee reports because the process has proved to be a complete failure.

Mr Callahan: I move a motion that this committee endorse any decisions the subcommittee may make as long as they are unanimous decisions at the subcommittee. That will allow us to do what's being suggested by Mr Duignan.

The Chair: I don't think you heard me, Mr Callahan. I'm not convening any more subcommittee meetings.

Mr Cousens: The committee rules, not the Chairman.

Mr Callahan: Just a second, Mr Chairman. It's the committee that rules, with the greatest of respect.

The Chair: You may want to convene your own subcommittee meeting.

Mr Callahan: That's fine, but I'm moving that motion because I think what's being suggested by that gentleman makes eminent good sense. We could sit here all morning and discuss what might be the priorities.

The Chair: Well, thank you for your comments. The members of the committee have been told very clearly in the last moment or two what the items on the agenda are. We have 23 minutes left this morning. If we apply ourselves, we may in fact have a consensus between now and 12 noon as to what the committee wishes to do; that's if we apply ourselves. Mr Cousens.

Mr Cousens: Is there a motion on the floor? I heard Mr Callahan make a motion, and I don't know whether the Chair has accepted that motion or ruled it out of order, and by what authority he has done that.

The Chair: I'm not convening any more subcommittee meetings.

Mr Cousens: I don't want to challenge the Chair, but I'm saying that there is a motion on the floor and the Chair does not have the authority in any committee of this House to rule that kind of motion out of order. I would therefore call upon the Chair to reconsider the decision he has made, because I see this as a valid motion where the subcommittee would then have some authority to do something.

The Chair: And what would you wish to do in the next 20 minutes?

Mr Cousens: There are other things to discuss, but I'm saying, never mind just trying to fill time; there's a motion on the floor and I want to deal with that.

The Chair: Mr Callahan has moved that we have a subcommittee meeting to discuss the items that I outlined here a moment or two ago. I can outline them again for the committee if it wishes, but I'm sure you recall what they are. Any discussion on Mr Callahan's motion?

Mr Duignan: Yes, Mr Chair.

The Chair: Well, Mr Callahan made the motion, so we'll hear from him and then we'll start the regular rotation.

Mr Callahan: The purpose of this, Mr Chairman, is to eliminate what I understand your frustration is, that on the previous occasion there was --

The Chair: On a previous occasion or on every occasion, Mr Callahan?

Mr Callahan: I only recall one, but, in any event, to overcome that -- and I think that we all know, as you have told us, what the issues are that can be considered during the intersession. I think we can all support a motion that would call for the endorsement of the subcommittee's decision, rather than getting back in here and fighting over whether we endorse it or not.

I think it's very important that subcommittees' decisions be upheld and not be changed by the committee itself. Otherwise, the Chairman's quite right: It makes it a total waste of time to have a subcommittee do it. So maybe if we have that understanding that this will not happen in the future, perhaps I can withdraw my motion and we can refer it to the subcommittee.

Mr Cousens: I'm going to support the motion and I wouldn't want to see it removed, because I think the concern that Mr Mancini has had with regard to previous subcommittee meetings is justified.

The Chair: Thank you.


Mr Cousens: But notwithstanding that, there is value in having a subcommittee. Because one of the things that's going to happen is that next Tuesday the Provincial Auditor comes out with his newest report and there may well be certain items within that report that we will want to put closer to the top of the list. Some of the issues that have been already touched upon by the Chairman may well be the ones we want to follow on with, but there may well be others that come out of the new report that we would want to bring more quickly to the attention of the committee during the recess.

I make that point, and if the subcommittee comes in with each of the three parties presenting its list, it would be possible for that group to make a determination. I think the motion's valid and it certainly gives the Chair some reason for calling a committee meeting.

Mr Duignan: I certainly support the motion on those issues you raised here this morning and I feel that the report coming back here to the committee would be, hopefully, supported unanimously by all sides.

Mr Cordiano: I have to concur with the Chairman because if we're going to have a properly functioning committee to order its business in an efficient manner, then I think the subcommittee's purpose is to do just that. If we're going to thwart the work of the subcommittee once it arrives here at the full committee, then logic dictates that it's not worth doing. I think that's exactly what the Chairman is trying to point out. If you're going to have a subcommittee, then everybody must agree that the subcommittee's decisions have to take precedence once it comes to the committee.

Mr Callahan: That's my motion.

Mr Duignan: That's in the motion.

Mr Cordiano: Your motion may not be what results in the final analysis. Your motion does not override what the committee will do. Correct me if I'm wrong. I'll refer this to the clerk.

The Chair: We've asked Mr Callahan to put his motion on paper, but I just want to take a moment to express my feelings to the committee. It's an enjoyable committee and we know each other personally now over the last -- some of us longer than others -- and it's really great fun working with you individually, but as a group the subcommittee has not worked very well. Let me tell you about the frustrations I've had.

First of all, with all due respect, it's darn near impossible to get a subcommittee meeting because we cannot coordinate our individual schedules. It has proved to be one of the most frustrating events I've ever gone through. I receive numerous calls from the clerk that no matter what day we choose we can't get a committee together. Therefore, we've gone to meeting just prior to the regular committee meeting on Thursdays.

Now, if things continue on the way I believe they will continue, we're not going to be able to have a subcommittee meeting today, Monday, Tuesday or Wednesday. It's going to take place next Thursday at 9:30.

On every single occasion a subcommittee has met and made decisions, whether they were for one reason or another, controversial or non-controversial, the work has come back to the full committee, we've had extensive debate, far greater debate in the full committee than we did in the subcommittee, and all previous agreements have been overturned.

I don't mind convening meetings, but based on how things have operated over these last few months, it has been a total and complete waste of time to try to organize subcommittee meetings and then to have them. So I'm for efficiency in this committee, I'm for moving the agenda forward and I'm for listening to all members of the committee on what they want to do. That is the reason I told the clerk, after the last subcommittee meeting, that it appears to me a waste of time, I'll explain it to the committee and I really have no enthusiasm for calling these meetings because it hurts the effectiveness of the committee.

You are absolutely right. If you move a motion passed by the committee which says the Chair must convene a subcommittee meeting, we will try to convene one and we'll do all the somersaults necessary to rearrange my entire schedule to meet with anyone else's here. I have no problems doing that. I would be more than happy to do that, but I ask the members of the committee to do the same thing. Don't be surprised when we make these decisions if we have to come back and review them and overturn them.

The other problem is that we're close to the end of the session. I was hoping we could have a consensus today on what we wanted to do -- and I outlined very clearly what we had to do; things are backing up tremendously -- so that today we could prepare a letter and have it delivered to the House leaders tomorrow so they'd have the next couple of weeks to order our business for us, because we still have to request time from them. That is the purpose of the request I made today.

Mr Callahan: Maybe the motion could be read, because I think it should be clear.

The Chair: Yes, that's a good point.

Moved by Mr Callahan that the public accounts committee agree that any report of a subcommittee where the vote is unanimous will be adopted and acted upon by the full committee.

Mr Cousens: The only problem you have in coming to the House leaders with a determination of what schedule we're going to have during the hearings is, because the Provincial Auditor's report does not come out until next Tuesday, that is going to change the thinking we might make today because we don't know what is in that report. That is the main reason I see there being tremendous benefit to the committee meeting prior to next Thursday.

My second point is, I can assume that historically this committee has met for two to three weeks during the recess time frame.

The Chair: Some longer, some shorter.

Mr Cousens: I would have to say that I would support that you get your name in immediately for at least three weeks of hearings during the interim so we can at least begin to realize that there's enough to do. I know there'll be sufficient. Then we'd have the authority to do that plus the authority to travel.

The Chair: We'll ask for four weeks because we know they'll chop us back to three.

Mr Cousens: Mr Chairman, you missed my final point: along with the authority to travel on a number of these issues.

The Chair: I heard that, Mr Cousens.

Mr Johnson: Notwithstanding all the concerns the Chair has, I was going to vote against this motion until I heard it re-read and I heard the word "unanimous," because I think "unanimous" is very important.

The Chair: It's never going to be unanimous.

Mr Johnson: I also agree with the Chair that, with the time we have remaining, we could probably come to some conclusion.

The Chair: Absolutely. That's why I think we could do this work right now. It's going to take an enormous amount of effort to get a subcommittee meeting, and nothing will be accomplished, with all due respect.

Mr Callahan: Mr Chair, that motion is not asking for you to convene a subcommittee meeting. All it's doing is trying to lay to rest what I see as a waste of time, where four of you sit down and agree on something, which happened on a couple of occasions, and then when it gets back here, the full committee, with the strength of its vote, just wipes out all that's been done by the subcommittee. I quite agree with the Chairman: That's a waste of time for everybody.

What this is saying is that if the subcommittee isn't unanimous, if somebody wants to open up the can of worms at the subcommittee, fine; do it then. Don't waste the subcommittee's time or the committee's time. That's all this is. It's not asking the Chairman to do it at all. We can do it right now if you like. So I'd like to move the motion.

The Chair: All in favour of Mr Callahan's motion? Opposed? Carried.

Interjection: It's unanimous.

The Chair: Unanimous.

Mr Cousens made a good point and it may be in the form of a motion. He suggested that we request three to four weeks' time from the House leaders immediately, with authority also to travel. We'll fill in the details as we decide on the details. Mr Cousens, would you mind making that a motion?

Mr Cousens: I so move, Mr Chairman.

The Chair: Any discussion on Mr Cousens's motion? Mr Cousens, do you have any discussion on that?

Mr Cousens: When you're getting into any of these issues, you have to have firsthand experience other than just to sit here at Queen's Park. I think we often forget that we are responsible for the province of Ontario. If the Board of Internal Economy says, "Do you want to travel the world?" -- no. My concern is that we're dealing with Ontario issues and may well have to get out of Toronto. I think there's a real problem in this province when they see us coming into Toronto. This seems to be a place dominated by this city, and it isn't. I want to do everything I can to show northern Ontario, eastern Ontario, western Ontario and Markham that we're not just run by a Toronto-based group.

Mr Duignan: I support Mr Cousens's motion. Is it four weeks?

The Chair: Four weeks, yes.

Any further discussion on Mr Cousens's motion? All in favour? Opposed? Carried.

Does the committee want to spend -- I guess we won't do that, because I will convene a subcommittee meeting.


The Chair: But I'll tell you, it won't take place until next Thursday. I already know that, and I know we're not going to decide anything unanimously. I know that.

Mr Cousens: No, we could.

The Chair: Yes, and Santa Claus is for real too.

Mr Duignan: Maybe the Chair will buy us all lunch.

The Chair: And I believe in the Easter Bunny.

Mr Hayes: I can understand a lot of the frustrations in trying to get the members together for your subcommittee meeting, but is it possible, when you're all sitting in the House sometimes, that you could get together there, like go to a room, rather than, say, tomorrow night or tomorrow morning? When you're all in the House at the same time, is there a possibility --

The Chair: But it has to be organized. You're correct. That could be done, but there has to be --

Mr Hayes: But if you've got some specific issue you want to discuss -- I would suggest that; that's all.

The Chair: But it has to be organized. We have to have the clerk with us. We have to make motions. It has to be recorded. It has to be done in some fashion so that when you report to the full committee, it's done in a --

Mr Hayes: You don't need Hansard there.

The Chair: No, we don't ever have Hansard for the subcommittee.

Mr Hayes: Just trying to help you out.

The Chair: Anyway, please keep this in the back of your mind. We asked for a special report on the registrar general's office; we asked for a special report on non-profit housing that's going to be included in the annual report; there may be other items there that we're interested in; we're in the middle of the Toronto General Hospital matter; we've asked for the auditor to go in and work in the Ombudsman's office; and we're in the process of negotiating a review of the Audit Act with the government. Those are the key items, and there may be more next week.

We'll see everybody at the next subcommittee meeting, 9:30 am next Thursday morning here. Subcommittee members, next Thursday morning, 9:30 am. We'll advise you on the room.

The committee adjourned at 1152.