Committee Transcripts: Standing Committee on Finance and Economic Affairs - 2000-Feb-15 - Pre-Budget Consultations

Pre-Budget Consultations
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PRE-BUDGET CONSULTATIONS
PROVINCIAL COUNCIL OF WOMEN OF ONTARIO
NIAGARA SARC NETWORK

ST CATHARINES AND DISTRICT LABOUR COUNCIL

ONTARIO SECONDARY SCHOOL TEACHERS' FEDERATION, DISTRICT 22

ONTARIO CHILDCARE COALITION

ST CATHARINES PROMOTION TASK FORCE
NIAGARA COLLEGE FOUNDATION
ST CATHARINES CHAMBER OF COMMERCE

WILLIAM BENSEN, LEE SIMPSON

IAN SPRAGGON

TOGETHER IN EDUCATION

ONTARIO CHIROPRACTIC ASSOCIATION

TAXPAYERS' COALITION NIAGARA

CANADIAN CO-OPERATIVE ASSOCIATION, ONTARIO REGION

CANADIAN TRANSIT CO

CONTENTS

Tuesday 15 February 2000

Pre-budget consultations

Provincial Council of Women of Ontario; Niagara SARC Network
Ms Gracia Janes

St Catharines and District Labour Council
Mr Ed Gould

Ontario Secondary School Teachers' Federation, District 22
Ms Rosemary Hanes

Ontario Childcare Coalition
Ms Libby Walters

St Catharines Promotion Task Force; Niagara College Foundation; St Catharines Chamber of Commerce
Mr Don Johnston

Mr William Bensen; Ms Lee Simpson

Mr Ian Spraggon

Together in Education
Mr Brydon Elinesky
Mr John Ryrie
Ms Pat Cannon

Ontario Chiropractic Association
Dr Bob Haig
Mr David Chapman-Smith

Taxpayers' Coalition Niagara
Mr Ian Fielding

Canadian Co-operative Association, Ontario region
Ms Cathy Lang
Mr George Alkalay
Mr Ron Voortman

Canadian Transit Co
Mr Remo Mancini

STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS

Chair / Président
Mr Marcel Beaubien (Lambton-Kent-Middlesex PC)

Vice-Chair / Vice-Président

Mr Doug Galt (Northumberland PC)

Mr Ted Arnott (Waterloo-Wellington PC)
Mr Marcel Beaubien (Lambton-Kent-Middlesex PC)
Mr David Christopherson (Hamilton West / -Ouest ND)
Mr Doug Galt (Northumberland PC)
Mr Monte Kwinter (York Centre / -Centre L)
Mrs Tina R. Molinari (Thornhill PC)
Mr Gerry Phillips (Scarborough-Agincourt L)

Substitutions / Membres remplaçants

Mr James J. Bradley (St Catharines L)
Mr Peter Kormos (Niagara Centre / -Centre ND)
Mr Bart Maves (Niagara Falls PC)

Clerk / Greffier

Mr Tom Prins

Staff / Personnel

Mr David Rampersad, researcher,
Research and Information Services

The committee met at 0850 in Renaissance Fallsview Hotel, Niagara Falls.

PRE-BUDGET CONSULTATIONS
PROVINCIAL COUNCIL OF WOMEN OF ONTARIO
NIAGARA SARC NETWORK

The Chair (Mr Marcel Beaubien): I'd like to bring the committee to order this morning. Good morning everyone. It would appear that Mr Mike Allan has not appeared yet. Consequently, we'll go to our second presenter this morning, the representative from the Niagara SARC Network. Could you please state your name for the record.

Ms Gracia Janes: My name is Gracia Janes. I am presenting two briefs. I'm the chair of the Niagara SARC Network, and have been for 12 years. I'm also the incoming president of the Provincial Council of Women of Ontario. I'm going to split my time, if you don't mind, between the two presentations.

The Chair: On behalf of the committee, welcome. You have 30 minutes for your presentations this morning.

Ms Janes: Thank you very much. I'll deliver my brief from the Provincial Council of Women of Ontario first. This was prepared by myself and the vice-president of community services, environment, economics and housing.

Founded in 1923, the Provincial Council of Women of Ontario represents hundreds of thousands of citizens and a broad diversity of interests within its affiliated groups, namely, local councils and provincially organized societies. The local councils, some established as early as 1894 and comprised of a broad range of affiliates, are found in the major urban centres of London, Ottawa, Toronto, St Catharines, Hamilton and Windsor. The POSs number 11 and represent groups as diverse as the Business and Professional Women's Clubs of Ontario, the Ontario Farm Women's Network and the Salvation Army, Ontario central division.

Council policy is developed through a democratic and extensive resolution process and, once approved, becomes the basis of PCWO's dialogue with the government and the broader public. In this regard, PCWO has an extensive history of speaking to all public issues as they relate to the good of society and the family, using the precautionary principle, and with a view to the best interests of present and future citizens of Ontario.

As well, we are bound by national and international council policy and therefore we look to the very much wider public good. It is within these parameters that the PCWO speaks today on the issues before us regarding public social infrastructure expenditures, ie, for the public good.

Investment in long-term returns has always been considered basic common sense. Failure to do so brings greater long-term costs, ie, if one's roof needs repairs this year and one does not do it, the damage will be greater and more costly down the road. We consider that the social structure of Ontario needs investment in some areas and repair in others, or we will have greater costs in the long term.

Investing in children: One example of far-sighted investment, which we commend highly, is that planned by the government for early child development, in co-operation with all sectors. This investment should bring excellent long-term benefits. Nevertheless, as the government's own Early Years Study points out, many in our province find it difficult to provide the proper nurturing and stimulating environment for their children, because they are not getting enough to eat and they are wondering whether they will be evicted from their homes.

PCWO feels that this difficult situation is caused, for those on social assistance, by inadequate social assistance benefits. Recipients should not have to choose between paying the rent and feeding the kids. As we have done before, we urge you to improve your social assistance rates in order to avoid heavy long-term costs in terms of health, social dysfunction and delinquency, and to make investments in the nurturing and education of children and the stability of the home environment.

Child care: Child care is essential to the 70% of mothers who are in the paid workforce and it is in desperately short supply. Many mothers cannot get off welfare, even though a job is waiting, because no suitable child care space is available. We urge you to reverse your reduction in funding child care, which has placed an additional burden on the municipalities and the families who need that child care.

While many mothers use informal care, some of which is first-rate and others not, studies have shown that children and parents do better with children in quality child care. Therefore, we urge you to fund more such spaces. As well, some mothers would like to have child care in the workplace and some employers have responded to this need. We encourage you to work with employers to provide more such facilities, perhaps with tax incentives.

Another idea to consider is job-sharing. When both parents are working part-time, the need for child care is much reduced, if not eliminated. There is also greater flexibility for workers to take retraining and upgrading courses that contribute to the maintenance of a workforce geared to make use of the latest technology and shifts in product demand. The initial cost to employers of providing benefit packages for two sets of workers is recuperated from better-trained workers.

Housing: In the current booming economy, vacancy rates are low, affordable rental housing is scarce, private investors are not building affordable housing and economic evictions have increased. Tragically, many families end up in shelters, a terrible environment for children. Therefore, we urge you to increase the shelter component of social assistance benefits so that parents can avoid ending up in a downward spiral to homelessness.

In the case of the working poor, we consider a return to funding social housing, in co-operation with other levels of government, to be the best long-term investment, rather than shelter allowances which could prove to be a bottomless pit. Additionally, we urge you not to try to balance the budget in part by selling off scattered provincially owned houses, which offer desperately needed rent-to-income housing. Rather, transfer them to the municipalities, which you have made responsible for social housing.

We commend the government for making some initial investments to reduce homelessness. In addition, we urge you to move further in providing more supportive housing, harm reduction programs and supportive efforts for those with addiction problems, as well as finding solutions to the growing problem of youth on the street, which can have long-term and expensive consequences.

Investments in jobs, training and supports: We are pleased that the vibrant economy has meant that many workers have left welfare and many now move directly from EI to jobs. This means that those left on welfare have more barriers to finding jobs. Therefore, these clients require more work by the municipal social service departments, to find them the right training, education and supports so they may successfully achieve a transition to work. We urge you to reward municipalities for their success in moving clients into jobs and on to the provincial tax rolls, rather than penalizing them for failing to meet unrealistic community placement targets.

In the same way, PCWO urges the government to consider the advantages of allocating funding to programs that result in long-term return of funding that exceeds their original investment. One such initiative would be training programs that are organized in many units of small size and specific detailed curricula and which provide knowledge and skills that are in demand by employers and are flexible enough to respond to changes in demand. Those given this type of help will be valuable taxpaying citizens for a long time.

We would also urge the government to consider the problems of the many hard-working people who have moved from welfare to work in a minimum wage economy and find their situation precarious because of a lack of discretionary benefits previously provided to the working poor, such as drug cards. The Trillium plan requires upfront money which they do not have. Because of this, many may end up back on welfare and we urge you to reinvest in discretionary benefits for this hardworking group.

Health: In tune with most citizens of Ontario, health remains a significant priority for PCWO. It is obvious that, despite some government reinvestments recently to stem the most current and obvious problems, the substantive cuts to health funding early on, combined with a growing and aging population, have led to a crisis in service delivery. This may well jeopardize the future of health care in Ontario and lead ultimately to a two-tier, privatized service delivery model. Rather than allow this unfortunate result, PCWO urges the government once more to invest in long-term preventive solutions, such as quality health care within the system, funding of community care, increased numbers of nurses, avoidance of premature hospital discharges, funding and standards for home care and an adequate number of acute, long-term-care and ALC, alternative-level-of-care, beds.

Environment: In the interests of public health and safety, PCWO environment policy has long advocated strict environmental regulation, monitoring and enforcement and investments in safer, more sustainable renewable energy. Therefore, we are drawing attention to three current issues of critical importance, where investments could be made to improve the environment and reduce long-term costs to the citizens of Ontario, ie, improvements in the monitoring and enforcement of environmental statutes and regulations, the phase-out of coal as an electricity source and the eventual phase-out of nuclear power-starting with the final closure of the Pickering A and Bruce A nuclear plants-all with a view to reinvestment of savings in renewable energy sources .

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We recommend these investments in light of our knowledge that extensive cutbacks to the Ministry of the Environment's operating budget have seriously undermined the monitoring and enforcement that district and regional offices can deliver and the quality of our environment suffers. The use of coal has resulted in significant decline in air quality, an increase in health risks, and incidents in high-risk populations such as children, and has undermined the province's efforts to contribute to Canada's Kyoto commitment; and the use of nuclear has left the citizens of Ontario with an enormous and growing debt and a significant environmental risk.

In the case of coal, we would recommend a two-year phase-out, in favour of more inexpensive, indigenous Ontario sources such as renewables and gas. We draw your attention to the uncounted health and environmental costs and to the costs of importing coal. As well, promotion of renewables will stimulate small business in Ontario and help create leading-edge technologies for export around the world.

With regard to nuclear power, the 1997 shutdown of the Pickering A and Bruce A nuclear stations was due to documented serious deficiencies and dangers in operation. Pickering residents have demanded a complete environmental assessment before the start-up of Pickering A. Plant upgrades have cost millions more for taxpayers and the extraordinary cost of waste management has recently been added to the picture, with the producers of waste having to pay for their disposal. No matter who owns the nuclear plants in the future, the costs of waste disposal and the debt incurred by investment in this technology will have to be paid by the taxpayer, either through our taxes or our hydro costs. The costs of any further investment in nuclear could be better put towards renewable energy sources.

Education: Council is on record as supporting the funding of kindergarten and separating social assistance payments from OSAP loans so that eligible women can receive both in order that they may be encouraged to continue their education without incurring such heavy debt. This is especially important for low-income women on assistance in a time when the tuition fees for colleges and universities have risen substantially.

We have also expressed concerns in our annual 1999 brief to government regarding the controversies centred around the crucial issues of class size, increased teaching time load, reduced supports for special needs students, the one-size-fits-all funding formula and the need for investment in community support programs for children, eg, breakfast programs and after-school care in school.

In conclusion, the Provincial Council of Women of Ontario again asks for a significant investment in our children and their families in areas such as early years programs, child care, income adequacy, jobs, social housing, the health delivery system and our environment. Only by investing in what is good for the lives of the citizens of Ontario may we avoid a deterioration in all of these areas of the common good and, instead, look forward to a sustainable future.

I'll move right into my other presentation, if you don't mind. They're somewhat similar.

This is a presentation to the standing committee on finance and economic affairs from the Niagara SARC Network, a coalition of individuals, community groups and agencies, such as the Niagara South Social Safety Network and the St Catharines and District Council of Women, who have monitored welfare changes since 1988 and advocated for change in the spirit of the reforms of the 1998 Social Assistance Reform Commission of Judge George Thomson. That's what the SARC stands for, Social Assistance Reform and we've been at it that long.

Given the booming economy in Ontario, the Niagara SARC Network believes the government of Ontario should now make a significant investment in the poorest people, ie, those citizens who, through no fault of their own, require social assistance or are among the working poor.

Failing this, their living conditions and quality of life will continue to deteriorate. The government will not capitalize on their long-term potential and willingness to contribute to the economy and society, and we will all have to pay for the unnecessary and substantive social deficit in the very near future.

Children are important. The canaries are the poor children who live in extremely difficult conditions in this very prosperous province. While most of us have continued to enjoy a very decent lifestyle, poor children and their families have lost ground. This has come about as a result of a substantive 21.6% reduction in welfare benefits, an abandonment of investments in social housing, the tightening of rules to disallow the working poor and to force people off welfare into low-paying jobs which fail to adequately support them, the clawback of the child tax benefit, and the cuts to many community and municipal support services, for example, discretionary services.

Approximately one in five children in Canada lives in a poor family, one in three in Toronto is poor, and over 48% of those on social assistance in Ontario are children. It is well documented that children who are poor suffer much more from illness and suicide, the related costs of which can only continue to grow in the years ahead.

These seem obvious outcomes of going hungry and perhaps having more than one move in a year, or living in unsafe, inappropriate housing-motels-or being raised by parents who are tired, hungry and stressed from trying to make meagre ends meet.

Such living conditions are worsened by the social stigma of not being able to participate fully in their school and community life and by having their schoolmates know they are poor. For to be a poor child on social assistance in Ontario is by default to be stigmatized as part of a family who could be cheating Ontarians out of tax dollars, even though less than 1% are ever proven to cheat.

To be such a child is to be at risk of having one's parents cut off welfare forever. For some of us in the social advocacy field, even one child suffering in this way is too many, and for many Ontario citizens there is a sense of disquiet.

The adequacy of benefits will stem the poverty tide and prevent ever-escalating health and social costs. At the bottom of the disturbing trend to ever-deepening levels of poverty is the obvious inadequacy of welfare benefits. It is said that Ontario benefits remain, on average, 10% higher than the benefits of the other nine provinces. This avoids the issue that the benefits are inadequate across the country and that in Ontario, despite our productive economy, we do not give enough assistance to adequately feed and house people, much less pay for things most people would agree are essential, such as transportation, phone, and unexpected costs.

A recent regional document, Impact of Nutritious Food Basket Survey and Impact on Ontario Works Participants and Low Income Earners, takes a conservative look at the costs of a healthy diet and finds that for those on assistance:

"At the beginning of a given month, after food and shelter is paid, single adults on social assistance can expect to be in a deficit situation, assuming adequate dollars are spent on healthy foods.... It is evident, from the attached samples, that current provincially mandated social assistance rates are inadequate when a Nutritional Food Basket budget is used by low-income individuals and families and the basic necessities of daily living are considered."

People are in a Catch-22 situation. If they buy a nutritious meal-and this is not extravagant, being only $22 per week per adult and $19 per child-they may have difficulty paying the rent. If they pay market rents, which in Niagara range on average from $425 for a single person, who gets approximately $571, with tax rebates, to $725 for a family of four, who receive $1,475.94, with tax rebates, they will have paid over 50% of income in rent-74% for singles-and have little left for nutritious food, clothing and other necessities. In fact, the single person is in a deficit position of $13.63 and has no money for transportation, phone etc. If one excludes the tax credits, he or she is in a deficit position of $64.69. Without the tax credit, the family has only $45 extra for transportation and other costs.

It is also often asserted that people on assistance may earn back the difference in the 1995 cut. This does not account for the single parents of children under school age and avoids an obvious chicken-and-egg scenario. For instance, in the case of a single person, how can they find a job easily with no money for phone or transportation, much less emergencies? For single parents, how do they cope if sickness hits? There is no security of person or family, and this feeds into any existing health or mental health problems, creating an even more desperate situation.

An additional problem lies in the fact that those on assistance nowadays are those who need far more support than in the past before they are able to enter the workforce. They are not on the top of an employer's list to hire.

These facts beg the question: Why won't the province invest in adequate rates when such an investment will help people find and keep adequate, affordable housing, avoid food banks, get jobs, pay taxes, move money into local economies and prevent a growing social and health deficit?

Jobs, training and community supports do lead to long-term jobs. Key to the welfare of many families is having a good job. Here in Niagara, the economy has had its share of bad times, due mainly to the severe downsizing of GM and related jobs. Today, with the economy on an upturn, our unemployment rate in Niagara, at 7%, is higher than both the provincial rate and the national rate, and we have the eighth-highest unemployment rate-next to Saint John, New Brunswick-in Canada.

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Recent job cuts at GM and related industries probably account for this, and it means we have not yet recovered as well as most other cities. Also, many of the laid-off workers are older and find it more difficult to find employment that pays as well. We have many immigrants who, while skilled, cannot easily overcome technical barriers to employment in their trade.

It appears also that some workers are underemployed and may have given up looking for work. This is reflected by the participation rate, which at 60.4% lags behind Ontario at 65.9% and Canada at 64.8%. All of these are much lower participation rates than in the 1960s and 1970s.

Despite the recent upturn in the economy, there are a substantive number of low-paying part-time jobs in Niagara. An additional difficulty faced by workers who are laid off is the reduction in the EI payments, the much shortened payout period, and the difficulties in qualifying. This all means there are many people struggling to make ends meet. Prior to 1995, these families could benefit from social assistance supports such as drug cards and a top-up to their paycheques. Now the tightened eligibility rules have shut them out, and it is difficult for the region to assist, given its downloaded responsibilities.

For those still on social assistance, there are multiple barriers to employment, such as lack of experience and education. In addition, many lack cars, a necessity in an area where inter-city transportation is almost non-existent.

Prior to 1995, the regional community services department had a very good track record of job placement, even in the down years of 1990 and 1991. Today, in contrast to the temp-job-type agencies which provide short-term jobs and get tax dollars for the assistance money saved, the regional community services department is working hard to provide clients with the individualized, sometimes longer-term supports that are needed to move them into real jobs. In this, they are fortunate that in Niagara we have many community agencies with a long tradition and good track record of pre-employment support programs; for example, the Employment Help Centre, the YWCA, and Port Cares.

On the other hand, the Ontario Works community placement targets are unrealistic and the placements short-term in nature. More important, most community agencies are unwilling to supervise people who have to work for their welfare. As private placements are coming on line, public money is just subsidizing jobs that the private sector should and would create in the course of business. In this context, it would seem to make sense for the government to invest in employment supports provided by the region and community agencies at an individualized level. This way, having been better educated in a job-specific way and linked to employers who have certain needs-for example, tourism and small business-people may move into long-term jobs. A further wise investment would be to support the cost of transition to employment, ie, to support those who get a job so that they may keep it. Enhanced health and social services save money in the lonq run.

As stated in the regional document COM 68-99 in Niagara:

"There has been a significant increase in the sole-support parent caseload, as the FBA clients have transferred over to Ontario Works. There are now 4,800 sole-support parent families with 7,000 children in receipt of assistance....

"Sole-support families require a combination of supports, in order to become independent of the welfare system, for example, accessible and affordable child care, transportation, job referrals, educational upgrading, employment experience, and job preparation courses."

Along with an increase in staff and other new supports for this caseload, the regional staff looked into the internationally recognized work of Dr Gina Browne of McMaster University, which provided strong evidence that "Providing additional health and social services to mothers of social assistance families and making quality child care and recreation services available pays for itself in a relatively short time and produces more permanent beneficial outcomes in families at risk."

Regional staff concluded that, "The foregoing findings indicate that positive outcomes may be achieved for sole-support parents and their children by providing increased health and social services. By providing increased health and social services, families do better in the short term and in the long term the number of exits from the social assistance system are increased. In addition, these interventions produce beneficial outcomes for families at risk."

It is clear that such investments would benefit many sole-support parent families across Ontario and help people into the workforce for the long term.

We note that child care is often a key support for sole-support parents. In Niagara, the switchover of parents from FBA to Ontario Works has resulted in a waiting list, and parents would prefer to have their children in quality child care. The recent provincial disinvestment in child care means the region must take on yet another expense if they wish to support parents adequately and help them into the job market.

Housing helps everyone: Investment and housing benefit everyone-the poor, the working poor, the builder, the community and the general economy.

Just prior to 1995, social housing starts were on the upswing in Niagara, with many builders benefiting from turnkey arrangements whereby they had the help of provincial investments in building affordable units and then turned these over to the non-profit and co-operative boards to operate. Supportive housing was moving forward, and social assistance adequacy meant that more people could find and maintain housing for longer periods.

Unfortunately, just as the federal government withdrew from most of its commitments to housing, the provincial government halted all planned new non-profit housing units, and there has been little action by the private sector to fill the gap.

As well, the Tenant Protection Act has allowed more conversions of affordable apartments to condominiums and for landlords to raise rents to market levels when tenants move out. Most recently, there is a fear that the Ontario Housing units may be sold, further reducing the affordable housing stock.

The 1995 cuts to the maximum shelter allowance for social assistance recipients have exacerbated this extremely difficult situation. As we have noted above, most poor people are paying far too much for their rent and have little left over for necessities. They are living in crowded and unsuitable conditions, moving frequently, being evicted in growing numbers, and some, even with children, using hostels on a regular basis.

Our conclusions are that the Niagara SARC Network urges this committee to recommend substantive investments in this year's provincial budget in the area of social welfare. We hope these would include an increase in the social assistance rate-both basic and shelter components-to 1995 levels, plus an increase to reflect the rate of inflation since then; the retention by those on social assistance of the child tax benefit; investments in social and co-operative housing and no sale of public units; increased health and social services for sole-support parents; investments in child care; and increased funding of municipal and community pre- and post-employment supports for social assistance recipients.

The Chair: Thank you very much. Maintaining the same rotation we had yesterday, I'll start with the government side. We have two minutes per caucus.

Mr Bart Maves (Niagara Falls): Thank you for your presentation this morning. One of the things that you talked about near the end was social assistance rates. They're about 10% higher, in some cases, than the average in the other provinces right now. So you would advocate putting them back by 22% plus inflation for the last five years?

Ms Janes: Yes, I would.

Mr Maves: So we'd be about 50% above the average of the other provinces?

Ms Janes: I think if you work out the mathematics-I haven't worked out the math of what they would be above. What did you say, 15%?

Mr Maves: Probably between 40% and 50% above the average of the other provinces.

Ms Janes: I'm not sure that that would be. I'd have to work it out. But what I would say, again, is that the amounts that people get across the country aren't adequate amounts of money.

I've asked this question of many people: How much would you need, if you were a single person in Toronto, or even in Niagara, to live on? Given that you didn't own a house or anything and you didn't have a car, what would it cost you? They always say, "About $1200 is what I would need to get by"-

Mr Maves: Can you tell me what they earn?

Ms Janes: -and they get $520.

Mr Maves: Can you tell me what the earn-back program is in welfare?

Ms Janes: Yes, I can, and I've pointed out the problem with it. It helps some people, yes. But for young women who are on social assistance who have children who are not in school, that's a problem. The other problem is that they just don't have enough to get by even if they are keeping some of their wages, because they have to have transportation, they have to pay for their phone-it just doesn't work out that smoothly.

Mr Maves: How about the STEP program?

Ms Janes: The STEP program is fine, and the LEAP program is fine, and all these programs that help people. But the basic rate-and it is said by many people and it is being experienced by children up north who came down to Toronto to show how little they had, that they couldn't participate in their school programs. All the other kids in the class could participate; they went hungry. People are going hungry, and it is because the social assistance rate is too low.

Mr Maves: We have workfare, earnfare and learnfare. The community placements portion has been one of the most successful, actually, in taking people who have had placements and who then move from the placements into work. We've just announced some changes where we want at least 15% of people's caseloads in community placements, next year 22.5%, and the next year 30%. As a result of those changes, where we only had eight municipalities out of 47 at 15%, we now have two thirds that are going to hit that 15% mark. You still don't approve of that, I take it?

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Ms Janes: It's easy to say. It has actually been an abysmal failure. You had across the province something like 5% of the people in these kinds of placements and your targets were well above that. So most municipalities have not been making them. I doubt very much, if they don't make those targets, that they're going to make increased targets.

The Chair: Thank you very much-

Mr Maves: But two thirds are on track to make-

The Chair: Mr Maves, we've run out of time. I have to go to the opposition.

Mr Monte Kwinter (York Centre): Thank you very much for your presentation. It was excellent in that you covered an incredible range of issues.

One thing stuck out, and I wanted to get your reaction to it. When the House was in session we raised a question about a woman who had a double mastectomy and was sent home the same day. When I listened to it and when I told people about it, they were absolutely shocked and said, "That's just terrible, but it most have been a unique situation." Last night I talked to my wife and she told me of a friend of ours who is going into the hospital on Friday to have a double mastectomy and is being sent home the same day. I thought, "This is becoming the norm." I was just curious to know, because you talk about the avoidance of premature hospital discharges where people are going home sicker and quicker, how you feel about that.

Ms Janes: In our brief to the government this fall, we commended them for allowing first-time mothers of babies to stay in the hospital longer. We had word, and people's personal experiences indicated, that prior to that announcement mothers were having to go back into the hospital-and this is just one example-if they were sent home too soon. It seemed to make sense to us, and we urged the government to look at other people leaving the hospital and the kinds of costs that are involved in people going home and then having to come back to the hospital with complications, not to mention all the personal trauma.

When I think of all those women who are going down to Buffalo-I had a lumpectomy and radiation and had to wait about six weeks. But I can't imagine a mother with children and responsibilities who lives up north having to travel distances and stay away from her family for the length of time that I had to stay. I really empathize with that human component.

The council of women feels strongly that preventive measures are very important, that one doesn't just rush people out the door. It doesn't save any money and we're very concerned about it.

Mr Peter Kormos (Niagara Centre): A part of me wants to give up my two minutes for Mr Maves to ask you more questions, but I'm going to resist that temptation.

Mr Maves: Come on, Peter. I'll take them.

Mr Kormos: At your peril. Be careful what you wish for, Mr Maves.

In response to this whole issue around welfare rates and the cost of housing, my personal experience and my familiarity with the region are such that your figures on page 2 about rental costs, accommodation costs, are probably dead on, and significantly lower than what they would be in Toronto or other major cities where housing costs are significantly more.

The other thing that bothers me is that when I come to these committees or to the Legislature, the minimum wage in the Legislature for elected officials is $78,000 a year. That doesn't apply to the staff, and my apologies to them. Most elected officials make in excess of $78,000 a year. So I'm always bothered by people who are probably in at least the top 10%, if not smaller, of Canadian income earners-and at $78,000 the fact is you are-talking about my neighbours, my family, my friends, our children, our sisters and brothers, our parents living on those social assistance rates with what are the real housing costs here.

You mentioned the risk of selling off the public housing in Niagara, and I don't think it's a risk any more as much as something that's increasingly etched in stone. What is going to happen to those families-we have hundreds of families across Niagara living in public housing, rent geared to income-where are those people going to go? Do we know?

Ms Janes: No, we don't know, actually. We know that people are paying far too much for their rent and they're struggling to find accommodation they can afford. This will only make the situation worse.

Mr Kormos: My fear is that we're going to see the enhanced phenomenon of real homelessness-not television homelessness, real homelessness-among a whole new sector of our community. A lot of these people are kids and a lot of these people are persons with disabilities.

Ms Janes: I guess what we may see, which seems foreign to us here in Niagara, are the kinds of situations you have in Toronto where recent reports indicate there are more children in hostels. Children-quite inappropriate, very sad.

It's hard when I've dealt with so many issues, but I really would like to highlight two: One is the inadequacy, because all of the regional social services across the province are saying exactly the same thing, that the rates are not adequate and that people are going hungry. Mothers are giving up food so that children can eat, and children are going hungry. There is evidence with Dr Gina Browne's study-it's an internationally renowned study. There's a news article-I meant to get copies for you-that to get moms off welfare you have to invest in them. Education is needed, the long-term supports, and you need to do a good job so that when they have proven-the facts are there that if you invest in these mums, then they will get jobs. The jobs will be long-term, and the money will go back into the economy, the local economy particularly. The children will not go hungry and the children will be better off.

Investment is really important. You can cut as much as you want and down the road you're going to have all these costs. The costs are also documented. Children who live in poverty have higher suicide rates, have higher sickness rates, hospital entry rates, everything. I don't think you can avoid it much longer.

The Chair: With that, we've run out of time. On behalf of the committee, thank you very much for your presentation this morning.

ST CATHARINES AND DISTRICT LABOUR COUNCIL

The Chair: Our next presentation this morning is from the St Catharines and District Labour Council. Could you please come forward and state your name for the record.

Mr Ed Gould: Good morning. My name is Ed Gould. I'm president of the St Catharines and District Labour Council.

The Chair: On behalf of the committee, welcome.

Mr Gould: I handed out this short brief here.

With the strong state of the Ontario economy at the present, there's falling unemployment and there are continued relatively low interest rates. This is good news for provincial finances. Tax revenues are growing automatically and relatively painlessly as the economy grows. This leaves more room for spending on essential programs like health care.

It is very interesting to note that provincial tax revenues actually increased slightly as a share of Ontario's gross national product between 1995-96, when the Tories were elected, and 1998-99, despite the deep cut in personal income taxes. In 1995-96, provincial taxes equalled 11.2% of the gross national product, while in 1998-99 they equalled 11.7%. Rising corporate taxes and sales tax revenue offset the relative fall in personal income taxes. In essence, overall taxes haven't been cut under the Tories, but the tax system has become relatively less fair since personal income taxes, which were the fairest type of taxes, have been cut.

What I'm trying to say here is that the people with the highest incomes are getting the biggest tax cuts. Obviously that's not fair to the citizens of Ontario or the region or St Catharines.

It is wrong to claim that there's strong growth in Ontario as a result of the Harris tax cuts. Other provinces, like Quebec, have also had very strong growth. The stimulative effect of the Harris cuts was mostly offset by the effects of reductions in public spending. We've seen this throughout the province, with cuts in education, cuts in health care, cuts to social programs. Obviously it's making the numbers look good.

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The main factors explaining Ontario's growth over the last two years are continued relatively low interest rates, strong exports to the US and, since about 1998, deep government spending cuts. Again, when you're closing hospitals, closing schools, closing beds, cutting social services, taking the money out of the system and keeping it in the banks, obviously things will look good.

Ontario's government will have ample resources with which to make necessary reinvestments in health care, education, early childhood development and social welfare. In essence what we're saying here is that rather than have tax cuts for the rich and the corporations, we're asking that the citizens of Ontario share in this basic growth in Ontario, with spending on health care, education, child poverty etc. The government of the day has had a dismal record. They're too busy keeping the squeegee kids off the streets in Toronto.

Provincial program spending has declined by about one seventh as a share of the provincial economy since 1995, from 14% of the gross domestic product to 12% by last year. The long-run consequences of this withdrawal by the provincial government from our social and economic lives are becoming more evident every day. As we can see, hospitals are in crisis, public schools are crumbling and there is widespread poverty. Again, let's reflect on the poverty in this province. One of the richest provinces in Canada has one of the highest poverty rates for children. It becomes more desperate even as the economy improves.

The government should cancel the next proposed instalments of personal tax reductions and channel the additional funds into emergency investments in health care, education and other essential services.

The government's own budget papers from last year show the lopsided effects of those tax cuts; see pages 76 to 83 of the 1999 Ontario budget. A family with an annual income of $180,000 saves over $10,000 per year thanks to the tax cuts. A senior couple with an income of $47,000-that's two people-saves $1,500 per year. Lower-income Ontarians save even less because they paid little or no provincial tax in the first place. Obviously, you can see it's not a fair system.

Ontario has never before seen anything like it: hospitals closed; ambulances on redirect; patients piled up in emergency wards, unable to get a bed; thousands of staff, upon whom patients rely, gone; thousands of beds closed; length of stay cut to the bone, forcing patients out of hospital quicker and sicker than ever before. I just heard the presentation before this and I heard one of the MPPs state that there is indeed a crisis in the hospitals in this province. The government plans to close more than 3,500 beds, with vital services contracted out to the private, for-profit sector, and on and on it goes. It has been an unprecedented four years of turmoil. People have been harmed. Some have died. There was evidence of that in the Toronto newspapers, with ambulances reshuffling patients from hospital to hospital. It's just terrible the things that are happening in this province.

The tragedy didn't just happen this way; it was planned. The government refused to listen. It was told time and time again not to proceed with its plans to close hospitals unless and until home care and other services and sectors were properly funded and in place to provide care for us. But the government was so intent on cutting health care to afford its tax cuts, it ignored many of the voices and warnings. As a result, our once first-class hospital system is a nightmare for many who rely on it. Again, there is continual evidence, even in the media, on a daily and weekly basis.

Just some facts here about hospital care: Almost $1 billion has been cut from hospital budgets; 45 hospitals have been ordered to close, others severely cut back or downgraded; the length of stay in the hospital has been forcing patients out of hospital quicker and sicker than ever before; thousands of staff upon whom patients rely have been laid off; thousands of beds have been cut; there are lineups in emergency rooms, ambulances turned away, vital hospital services contracted out to big business.

Let's talk about that. If you have $1 in health care and 20%, 30% or 40% is going to profit, that means you're not getting a dollar's worth; you're only getting 60 cents to start with. You can see that would be the wrong way to go.

The Harris government has been busy crafting a two-tier health care system. They've done this by deliberately starving our public system and by imposing new rules in every sector, including hospitals, long-term-care facilities and home care, and weighting them in favour of the private, for-profit sector. Again, if you have a dollar's worth of health care and you're going to put 20%, 30% or 40% in someone's back pocket for profit, obviously that's going to buy less. It doesn't take a rocket scientist to figure that out.

This huge shift is having an enormous impact on all of us. For starters, citizens are already spending more money out of their own pockets than ever before for services that were once covered in the public system. At the same time, government restructuring has thrown open the doors to the for-profit health care industry. Increasingly, services that were once provided in the public sector and by the not-for-profits are now being delivered by big business. Again, if you're going to target patients who are willing to pay, and you've got a dollar and you can get a 30% or 40% profit, plus make some money on top of that from someone who is ill and will pay for those services, obviously they're going to do that. What the government is doing is basically asking us to go parachuting without parachutes.

Some of the radical changes include user fees for prescription drugs for seniors and social assistance recipients; delisting or tightening of many OHIP procedures such as eye exams and pap smears-that's an absolute disgrace, that someone who can't afford to pay is asked to pay; restrictions on home oxygen programs, forcing many patients to pick up the tab; cuts to hospitals, forcing patients into home care, where services are being rationed. I've gone to the hospital. I've had some problems with my health, and my family. I'll tell you, bring your own Kleenex, your own shampoo, your own soap, and spend time with your daughter or your wife or your cousin or nephew. Patients now have to pay for services if they can't get by on the minimal hours available. The elimination of minimal requirements in long-term health care facilities is forcing families to hire private agency nurses to care for their loved ones. And on and on it goes. As you're starving the system, only those who can afford to pay will purchase adequate health care.

The government has eliminated the minimum staffing standards for nursing homes which ensured that residents got at least two and a quarter hours of nursing care per day. Meanwhile, government funding cuts and hospital closures mean that most residents now require three and a half hours per day or more.

The government has eliminated the requirement for a registered nurse to be present in a nursing home at all times. There is inadequate care. Nurses are highly trained to monitor the body: its rhythm, its temperature and so forth. Chronic care patients dumped into long-term-care beds get much less care, a $1.2-billion boom for big business. Some 70% of the first 6,700 beds were awarded to big, for-profit companies like Extendicare, Versa Care and Leisureworld. Patients are forced to pay out of their own pockets to supplement care, and there are 18,000-plus people on waiting lists, but the government plans are only to be completed by 2004.

I just had this faxed to me today, so I can leave this if you're looking for it. I have to apologize for my brief today. I've had some illness in the family, and other matters.

Broken promises: Figures released by the Canadian Institute for Health Information last November now allow us to examine what is really happening to health care funding in Ontario.

A chartered but independent agency, the CIHI, is charged with the important task of monitoring public and health care expenditures across the country, and was created in 1995 to consolidate the health care information functions for several government agencies, including StatsCan and Health Canada.

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The CIHI operates as a arm's-length body from the government. To many observers, it is an important source of information, allowing a measurement of health care and spending and compromises across this province.

Analysis of the CIHI data reveals that rather than increasing health care funding by $1.5 billion as claimed, funding has actually been cut in Ontario by $1.97 billion over the terms of this government.

When Mike Harris was elected and the government claimed that it was spending more money than ever on health care, they failed to account for the 4.2% increase in the population, the inflation of 4.5% and the price of health care. That's simply dishonest. And this is an arm's-length agency that the government has set up.

In terms of real spending, the Mike Harris government has cut an increasing amount from health care each year since coming to power. The government cut $266.4 million in 1996, a further $628 million in 1997 and $1.1 billion in 1998. On top of trying to hide the facts by ignoring simple figures such as inflation and population growth, the government has also attempted to inflate expenditures for the year 1998-99 by including $500,000 in one-time costs associated with hospital closures and layoffs and by double-accounting more than $200 million in transfers to the municipalities.

Health care experts have clearly rejected these budget claims, although the attempts to artificially inflate spending account for 3.93% of the estimated 1998-99 expenditures. Even choosing to ignore this means health care funding comes $1.93 billion short over the last three years. This information comes from the Canadian Institute for Health Information in Ottawa on health care prices etc. There are a couple of graphs. I can make copies available by fax. I just got it this morning.

Many of you sitting here today are probably aware that there is the Ontario internal budget for 1999. I just wondered, later on in the brief, what the government of the day promised. They promised that middle-income families would finally get a tax break. What they delivered was 57% of the benefit of the tax to the highest 10% of Ontario households. There's something wrong with the math there. You're promising a tax cut, and 57% are getting less than the top 10%.

The average household in Ontario has actually lost ground by $28 under the policies of this government. The top 25% of the households saw tax cuts offsetting the costs. Again, I can furnish this document for the members of this committee if they're inclined to look at this other budget.

Health care: Again, this is from the Ontario internal budget for 1999. They promised that total spending would be reduced by 20% in three years without touching a penny of health care spending. That was out of the Common Sense Revolution, page 3. What they delivered was that 35 hospitals have been closed so far, emergency rooms regularly stopped, expectant mothers are shipped around the province in search of beds-that's an absolute disgrace. Cancer patients are sent to the US while more than 2,000 people suffer on a waiting list. All the government has to do is buy some more equipment and train some more people, yet is seems easier just to ship people to the US.

Downloading to regional governments: They promised to improve service and end duplication. What they delivered was a thinly veiled attempt to cut provincial funding in order to free up money for the tax cut. The government's so-called Who Does What initiative neutralizes exchange for responsibilities between two levels of government. In the end, the provincial government downloaded over $800 million more in costs to regional governments.

That concludes my brief.

The Chair: Thank you very much. We have approximately four minutes per caucus, starting with the official opposition.

Mr James J. Bradley (St Catharines): First of all, I want to compliment you, Mr Gould, on your excellent presentation and stating the facts as I think most people in this area know them to be.

Do you see a pattern out there, as an individual who has observed the political process for a period of time, with the present administration wishing to discredit public institutions and create a "crisis" within those institutions so that people will then accept a radical and what they would have considered to be an unacceptable solution, shall we call it, to that particular problem?

I look at health care today, for instance, where you hear now a lot of talk, particularly in the National Post and other places, about how we must go into private care or a two-tier system. Do you think this is true throughout the policies of this government, discrediting public institutions so people will accept something else?

Mr Gould: That's definitely going on daily in the papers, their press releases, everything. It's just a shame. Again, just being a regular, ordinary citizen, I can understand that if you have health care for no profit alone, you're going to get a whole dollar rather than lose 10%, 20% or 30% for profiteers. I also know that the starving of hospitals, emergency wards etc makes it look like it's the employees' or the workers' fault when in reality they are the ones who are being starved for funds.

Mr Bradley: You seem to believe, because you obviously consult widely with people within the trade union movement, that the significant majority of the people you talk to would prefer in this budget that the government reinvest in health care and education and social services and infrastructure, as opposed to giving yet another tax cut. Is that pretty well a prevailing viewpoint among the people you would consult?

Mr Gould: Yes, that would be. In fact, a fairer tax system would be to have progressive tax: The more you make, the more you pay. That would be an even fairer system, along with what you just said.

Mr Bradley: Looking at the field of education, which again the labour council is very interested in, and the potential for problems in the future, do you believe that by continually cutting income taxes in relatively prosperous times, the government of Ontario, whichever government it is, would be placed in real jeopardy if we entered a recession, because there simply would not be the revenues to maintain, say, the education system, the health care system and the obviously increasing needs to assist people who would require assistance in a time of recession?

Mr Gould: I totally agree with that statement. You have to spend some money to make the future better, and spending it on training, spending it on the youth of this country, on the squeegee kids, on the journeypersons of tomorrow, on the trained nurses of tomorrow, will benefit everyone in the future. So education is one of the prime motivators of any group that understands society.

Mr Bradley: The automotive industry is doing very well at the present time. You mentioned our exports to the United States, the booming economy south of the border, low interest rates, the low dollar-all of that important. Premier Harris said in a speech to the Fraser forum out west that he wanted to see the dollar increase in value as opposed to staying where it is. What would the impact on the automotive industry be if policies were geared to that?

Mr Gould: I would see tremendous job losses, myself.

The Chair: Thank you. Mr Kormos.

Mr Kormos: Thank you, Brother Gould, for taking the time on behalf of people in St Catharines and district.

I'm concerned about this whole persistent message of "booming economy." I can't dispute the data, the increase in GDP, but just from our own experience here, the economy isn't booming for the 330 GM workers who just got laid off.

Mr Gould: That's right.

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Mr Kormos: Any prospect of a return to work?

Mr Gould: Not at this particular time, Peter.

Mr Kormos: I'm told about a contracting out by General Motors of engine production to Honda.

Mr Gould: Yes.

Mr Kormos: I'm concerned about the 300-plus workers and their families from Union Carbide in Welland.

Mr Gould: They should be in.

Mr Kormos: We have lower unemployment, but my suspicion is that the new jobs tend to increasingly be minimum wage.

Mr Gould: Yes.

Mr Kormos: Part-time?

Mr Gould: Yes.

Mr Kormos: Temporary?

Mr Gould: Yes.

Mr Kormos: God bless the folks who work in Wal-Mart. But you can't pay a mortgage-

Mr Gould: Or raise a family.

Mr Kormos: -and raise a family on what you make at Wal-Mart. I just had to mention my concern about this.

Mr Gould: What I was trying to show here in the brief is that the economy seems to be going well but that there seems to be fear driven into the citizens of this province that we have to restrain, and we're restraining in the wrong areas.

Mr Kormos: Let's talk a little bit about your comments on health care. This whole Klein-initiated proposal, this two-tier health care system-I should tell you that just recently I had occasion to visit some private hospital facilities associated with Harvard University. I was similarly in Ohio where, again, Canadians go for health care treatment. What I learned, because these were excellent facilities, is that a day and a half of diagnostic testing resulted in tabs of US$10,000 to US$15,000. What I learned when I spent some time with the leadership from Physicians for a National Health Program in the United States, who are advocating a universal health care system, is that 45 million to 50 million Americans have no health care coverage, that the number is increasing-that's one out of six Americans-and that only the wealthiest can enjoy any measure of adequate levels of health care.

You've spent your whole working life with other workers, working families. Is there a single colleague, associate, friend, neighbour, family that you know who would agree with that type of health care system?

Mr Gould: Not one that I know of.

The Chair: Thank you very much, Mr Kormos.

Mr Kormos: Surely that wasn't five minutes, Chair.

The Chair: I said four minutes. To the government side.

Mr Maves: Mr Gould, I know that in the industrial sector here in the Niagara region we have a group of industrial companies, including Hayes-Dana and General Motors and many others, who have spent a lot of time in the last year, maybe even two years, talking about and trying to educate municipal politicians about the high industrial property tax rates, and that they're the highest in the province.

The province of Ontario took over setting the education portion of the property tax rate. The education portion of the property tax rate in Niagara is set to decline, courtesy of the province of Ontario, by about 30% over an eight-year period. We said to the regions, "If you can find your own savings and match a reduction, we'll accelerate that." In fact, the regional government has done that now for the second year in a row, and it looks like we're going to get to that large reduction in four years now rather than eight. Do you support that direction?

Mr Gould: I just wonder, has it shown any improvement? Can you prove to me that it has shown an improvement?

Mr Maves: The tax rate?

Mr Gould: Yes.

Mr Maves: Yes, it has declined. You could just look at a property tax-

Mr Gould: How many jobs did that create?

Mr Maves: Well, I don't know.

Mr Gould: You're the government.

Mr Ted Arnott (Waterloo-Wellington): About 600,000.

Mr Gould: Six hundred thousand jobs in the region of Niagara?

Mr Maves: No. In the region of Niagara they're starting to lower the industrial property tax rate. I think it's necessary-

Mr Gould: You were talking about the region of Niagara, right?

Mr Maves: Yes-so that we become more competitive with other areas.

Mr Gould: You're saying for the third year in a row-

Mr Maves: There are a lot of businesses-

Mr Gould: Pardon me, I'm trying to make sure I understand where you're going here. This is the third year in a row that regional government-

Mr Maves: The second year.

Mr Gould: The second year they have cut taxes.

Mr Maves: Yes, they are going to reduce them.

Mr Gould: I asked you the question, did you see any job increases there?

Mr Maves: There are thousands of job increases in the Niagara region, but that's not the question I'm asking you. I want to know if you support that direction. I know you come from industry, and the industry that I believe you work for wants and is asking for more level industrial property tax rates in Niagara, compared to other regions that we have to compete with. Do you support that or not? That's all I'm asking.

Mr Gould: I understand what you're implying here. I couldn't give you that answer fairly because I don't know what they're paying in other places. I don't believe there should be a competitiveness, playing one sector of Ontario off against the other, because someone is going to lose. They're going to lose in schools, they're going to lose in hospitals, they're going to lose in roads or they're going to lose in social. That's not where we want to go. There should be a benchmark across the country, as far as I'm concerned. So I believe I just answered your question.

Mr Maves: We should all have the same industrial property tax rate-

Mr Gould: By how many jobs have they increased for the last two years of those tax cuts?

Mr Maves: Go and ask each employer. There are lots of manufacturing jobs. In fact, across Ontario provincially there are 675,000 new jobs since 1995. The vast majority of those are actually in manufacturing, technology and communications. They're not low-paying jobs; they're not part-time jobs. The vast majority of jobs that have been created are full-time. So there have been thousands and thousands of jobs. A lot of those manufacturing jobs have been created in Windsor and Oakville and other places. Mr Kormos mentioned that General Motors has declined in our region over a period of time. The Ford glass plant in my own riding closed. Part of the rationale they're giving for that is that the industrial property taxes are just too high here. Regional politicians are starting to recognize that and reduce their rates also. I just want to know if labour supports that general direction.

Mr Gould: Could you show me job increases in that?

Mr Maves: I think over time we could, since it has only been one year that the property taxation has been reduced-

Mr Gould: Obviously there weren't, because there have been plant closures in Welland and layoffs at General Motors. So what you're telling me-

Mr Maves: I remember Cyanamid in 1995, and I can go on and on about all the different places that completely left-

Mr Gould: But child poverty hasn't gone up in this province?

Mr Maves: In child poverty we're the third-best in the world, according to the United Nations, which is an objective organization.

Mr Gould: Really what's wrong is that you're too busy down in Toronto worrying about squeegee kids.

The Chair: With that, we'll bring this discussion to an end. On behalf of the committee, thank you very much for your presentation this morning.

Mr Kwinter: Bart, just for your information, no one has ever closed a plant because of the difference in taxes, never.

Mr Maves: How do you know that?

Mr Kwinter: Because I used to be the Minister of Economic Development and Trade, and I'm telling you that it's ridiculous to suggest that you've got a huge client and they suddenly shut it down because their taxes go up.

The Chair: Let's have some order, please. We must maintain our order here.

ONTARIO SECONDARY SCHOOL TEACHERS' FEDERATION, DISTRICT 22

The Chair: The next presenters are representatives from the Ontario Secondary School Teachers' Federation, district 22. Could you please come forward and state your name for the record.

Ms Rosemary Hanes: I'm Rosemary Hanes, president of the Ontario Secondary School Teachers' Federation, district 22. This is Craig Brockwell, vice-president of the OSSTF, district 22.

The Chair: On behalf of the committee, welcome.

Ms Hanes: Thank you very much for allowing us to come and speak to you. This is a very emotional issue for me as I am approaching the end of my career, and I am very fearful that with the cuts that we are seeing in education, I am going to be forced to leave my career not as proud as when I entered.

Investing in education is the single most important way in which we can ensure a prosperous and healthy Ontario. However, the Tory government seems to be taking the opposite stance. The biggest problem educators face is a result of an inadequate funding formula, and unless it is revised, boards across Ontario will be in big trouble come September 2000. Teachers are not opposed to change, but they very much need the resources to bring about a successful change. We like our students to be successful and we like to have the resources so that we can also be successful.

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In 1991, both the former Lincoln and Niagara South boards were doing all the things the Tory government is now requesting of all school boards across Ontario. They had already begun coordinating activities with their coterminous partners and through careful budgeting had achieved savings before amalgamation. However, under the NDP and now the Tory government, they have not been rewarded for being fiscally responsible. The teachers as well had voluntarily been partners in cost-savings efforts by holding their wages and working conditions constant, in most cases for seven or eight years. Now that the economy is booming, teachers, whose standard of living has steadily been eroded over the past eight years, are expecting a raise that the funding formula makes impossible to deliver.

The government states that the average teacher's salary is $50,000 in the funding formula. Unfortunately, this is far from the truth in our board. During the last round of negotiations our average teacher's salary was $57,000, leaving us $7,000 short per teacher in a board of over 1,000 teachers. How can we possibly negotiate a contract with our board in this next round? Who will be the real villain if labour unrest returns, bringing chaos to our schools? In fact, the Conference Board of Canada has reported employees can expect healthy but moderate increases in their take-home pay. Teachers will expect a salary increase. I don't know how we can negotiate that unless changes are made to the funding formula to allow us to do this.

The District School Board of Niagara has 22 regular schools and one adult learning centre. We have prided ourselves on offering small community schools. The board spans a huge area from Fort Erie to Grimsby and has a mixture of both urban and rural schools. Unfortunately, we do not qualify for any rural funding, although we have a number of rural schools: Niagara District, South Lincoln and Ridgeway, just to name a few. To receive rural funding you must be more than 150 kilometres from the nearest large urban centre; therefore, we do not qualify, as Toronto and Hamilton are within the required distance.

The government also provides funding based on the physical space of the building. Many of our schools are older buildings with wide halls. This extra space is counted against us and we are given less funding for educating students. If there are too many bricks and too much mortar, there is less funding for schools. I don't think this is common sense. Our schools are filled on average to 62% capacity. The funding formula bases funding on utilized space. The government feels that to be efficient, schools should have enrolments of 1,000 or more students. We have four of 23 of our schools that have even close to that number.

Should we close our small community schools, many of which are the only school in the community? Ridgeway, South Lincoln and Niagara District are just such schools. Parents who pay taxes certainly will be opposed to the closure of their community's only school. Niagara District is a school with severely underutilized space, and despite what Bart Maves, local Tory MPP, has said to reassure our parents here, many of whom voted Tory in the last election, it does not qualify for rural school funding.

To keep Niagara District open, the board has even considered tearing down a wing of the school to avoid being penalized for having too much space. This destruction will cost the board an additional $150,000 which could be better spent providing resources, training and new technology. What happens in the future when more space is needed? Is this not a waste of taxpayers' dollars?

The government's one-size-fits-all funding formula fits no one. Education spending in Ontario continues to fall under our current government. A recent analysis of per pupil spending in North America ranked Ontario as 62nd of 63 jurisdictions. Mike Harris's solution seems to be to distribute inadequate resources more equitably but in doing so to bring everyone down to the lowest common denominator. Cheap education is not quality education.

In 1997, $64 million was cut from training programs and $125 million from elementary and secondary school operating grants. This included a $90-million cut to adult education. In our board, we were forced to eliminate an exemplary program for adult education which had a 90% placement rate. In Niagara we have lost two adult schools. All classes that are offered are now on a cost-recovery basis and must have a minimum of 30 students. Most courses are computer-based. We have lost the academic programs-math, science and English-which many adults need to upgrade. We've lost all the technical and vocational programs. So how do adults who have been out of school for a number of years get the necessary and specialized upgrading needed to become gainfully employed in the new technological and knowledge-based economy of the modern world?

By 2003, the new rules of secondary reform will apply to adults. They will have to take a literacy and numeracy test to qualify for further education. Most will fail. No longer will every resident of Ontario have the right to an education. If there is no opportunity to escape welfare, taxpayers will pay more in the long run.

In 1999, $167 million was removed from the 1999-2000 school board budgets, and $385 million was lost in one-time transition funding for education. In 2001, $381 million is to be removed from the 2001-02 school board budgets. In recently talking to Mr Reilly, the chair of our board, he indicated to me that $800 million will be taken out. These cuts have had, and continue to have, terrible impacts on our school programs.

One result is that in many more of our classrooms we are seeing multiple grades and multiple courses taught within the same classroom. There is less time for program delivery, less time for individual attention and less time for teacher preparation.

Secondary education reform has also ignored a whole level of our student population, the vocational students. Not every student will be going to college or university, but this does not mean they should be condemned to a life of no employment. There are no resources to deliver curriculum to those students who can't read or are deficient in their math skills. What happens to these students who will fail their grade 10 literacy test? Are these students to become our throwaway children because they can't keep up and there is not the money to provide special resource teachers and the remediation needed? Who will be blamed: the powerless classroom teacher doing the best with what he or she is given or the government that controls the purse strings?

At a time when teachers are faced with curriculum changes of great and overwhelming magnitude, many of the necessary supports and resources are sadly lacking. The master teachers or department heads infrastructures that were in place to deal with mentoring young teachers coming into the profession and implementing change have been gutted. There is no time and no money to do the kinds of things we are asking department heads to do. The teachers and department heads are the ones who have to deliver the new curriculum. At a time when they are most needed, the professional development days for staff development have been removed. Much of the secondary reform money has been directed to administration rather than to the classroom teacher, who ultimately must make the changes in curriculum and help students achieve success. Once teachers are in the classroom, it's very difficult to remove them to do the training that has to be done to implement secondary ed reform successfully. We need professional development days. No industry trains people on their time; they do the training during work time. There is not enough money to free up teachers during their workday for staff development, and this will be exacerbated if we are forced to teach more than six of eight classes per day.

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The recent announcement to put more money into textbooks is wonderful, but is this new money or money that has already been announced? Last evening an art teacher told me that it will cost him $70 per student to implement his grade 9 curriculum, plus $389 for the teacher resource kit, and that's just for one class. Furthermore, much more money than is allocated is needed for the new technologies. Computer and software spending is not sufficient to implement the new curriculum. Computer networks and Intranet access and technical support are very expensive. Loss of school technicians has resulted in equipment not being repaired and even more work being downloaded on the back of the classroom teacher.

As more and more experienced teachers take the opportunity to escape the problems and uncertainties of the classroom through early retirement, boards across Ontario are facing a looming teacher shortage. Faculties of education have taken over their allotment of new teacher candidates, whose success depends on the mentoring and training provided by quality associate teachers in our schools. However, without the time to do even the job they are paid to do-teach kids-many long-standing associate teachers are having to decline accepting teacher candidates in their classrooms. Who will provide this most necessary training?

I work with the faculty of education at Brock University, and many of the students there say that the workshops we provide and the training they get by being in classrooms with master teachers is far more valuable than what goes on in their faculty of ed classrooms at Brock and the other faculties across Ontario. Associate teachers do need time to do this job. Unless they are given it, they will not be doing the training of our new young teachers that needs to be done, and we are getting more and more of them in schools. Department heads don't have the time to deal with the problems of classroom management that many of these young teachers have. This is really a problem that will have to be addressed.

Special education places even greater demands on an already cash-strapped educational system. Although the government has agreed to put additional money into special education, there are so many requirements that must be met that few special-needs students fit the established profiles in their entirety and therefore do not qualify for special-ed funding. By law, the board must still provide a program for each special-needs student, but the funding has to come out of the general education pot. Special education is expensive. There is no way the board can deliver the level of service parents are expecting. Services for preschoolers aged two to five are good, but the same level of funding is not there once children are placed in schools. Parents have come to expect this level of funding. Our board has only four language pathologists and one speech pathologist for 3,400 kids. The funding formula does not match the reality of our world. Teachers find it very frustrating. They are doing their best to meet students' needs but, with the funding available, find it impossible to meet parental demands. And we're not lying. Parents are starting to think that we are the liars and that we are the crooks and that we just don't want to meet their students' needs, and that's not the reality.

The funding line for transportation has not been revised since March 1998. This was one area our board was criticized for in the EIC report. Since this time, the board has introduced junior kindergarten, which increased transportation costs. A further increase was incurred with the consolidation of schools. Also, we lost the partnership with the French-language school, which now does not share transportation costs with us. Although our transportation costs are lower than in 1997, we are still $950,000 over what the funding formula allows, and we have to find that money somewhere.

Special education also impacts on our transportation budget. Many high-needs students have to be transported to a specialized school for program needs. One high-needs student requires a rider on the bus and must travel a considerable distance. This one student will cost the board $35,000 in transportation costs for just one year. The funding model does not allow for such exceptional circumstances. Where are we to find the money to deliver costly government-mandated programs?

We are a large, diverse board of both rural and urban schools. If we are to fund all our costs, these must be real costs. Over the last few years our costs have increased due to inflation; however, the funding provided does not reflect this. Hydro, gas, snowplowing, CPP costs, up 10% from last year, and employee benefits are necessary expenditures and aren't accounted for in the funding formula.

Boards are stretched to the limit and, without more funding, are doomed to fail. With what will we replace them? Should we encourage our boards to go into deficit financing to do what local taxpayers have elected them to do: to provide quality education for all the children in our schools and in our communities? That's what I'm going to encourage our board to do if adequate funding is not there for us to provide quality education to kids in Ontario. That's what we have prided ourselves on in Ontario, and I certainly hope this government does not intend to privatize education but to fully fund quality, universal education for everyone.

Recommendations: Give boards the ability to raise funds through education taxes. This is necessary at a time when the economy is booming. Let the boards decide what kinds of programs their communities need. The government is far removed. I don't see them listening to our concerns.

The funding formula should be revised to reflect the diverse needs of boards with a mix of both urban and rural schools.

The funding formula should be revised to reflect inflation and real costs.

The funding formula should be increased to allow for professional development at a time of such enormous change in curriculum, assessment and new technologies.

The funding formula should be increased to address the need for salary adjustments at a time when the economy is booming and teachers are seeing salary increases for many other public and private sector workers.

Transportation funding needs to be addressed. Not only the mixture of our urban and rural schools, but also extracurricular activities and special education, bring added transportation costs.

As evidenced from the chart that outlines the percentage change in spending per full-time equivalent pupil in secondary and elementary education in Canada, Ontario's percentage of spending decreased much more than all the poorer provinces that are not experiencing the great growth and economic boom that Ontario is currently experiencing.

The funding formula is in serious need of revision if public education, universally accessible to all, is to survive. Thank you.

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The Chair: We have two minutes per caucus. Mr Kormos.

Mr Kormos: Not very much time, Chair.

Thank you kindly. Your comment, "Not every student will be going to college or university," I accept that. We've struggled in this province for a long time to improve the retention rate. That is the number of young people who enter high school but who then complete it.

I was at an event the other night with a whole lot of teachers, talking to special-ed teachers who can confirm everything you say. These are teachers I know. These weren't political comments. They were just personal comments to me. Have we seen anything in this regard yet? I think the bar was raised. It's no longer just a matter of completing high school. Really we need some post-secondary education for young people. When I was a kid, it was completing high school on a good day. Are we seeing any changes in the retention rate, if I've got that right, as a result of what's been happening, the gutting of any number of programs in our high schools?

Ms Hanes: More and more students-and this is going to increase when the literacy and numeracy tests are imposed-are just not going to make the grade. Students who need more assistance are not getting it. We don't have enough EAs. We don't have the resource teachers available to assist those students, and teachers have taken on an increase in their workload. They are doing 1,250 minutes now, therefore there is less time. I think you're going to see more and more hard-to-serve students, special-needs students failing us. They will just become frustrated and they will drop out.

Mr Kormos: Not even finishing high school, never mind going to college.

Ms Hanes: Yes. They won't be able to because they are not going to be able to pass these tests.

Mr Kormos: Incredible.

The Chair: You've still got 30 seconds.

Mr Kormos: No.

The Chair: No? OK.

Mr Kormos: Wait a minute. Chair, in these 30 seconds, this is a shocking revelation after the struggle-

The Chair: Mr Kormos, we allocated 30 minutes for the presentation.

Mr Kormos: No, I'm talking about my 30 seconds.

The Chair: They took 22 minutes. I have divided the time equally. I will not debate the issue and I'll go to the government side.

Mr Kormos: What happened to my 30 seconds? The Chair used it.

The Chair: We've used your 30 seconds.

Ms Hanes: Help us, Mr Kormos, speak for the students and these young people in the Legislature who cannot speak for themselves.

Mrs Tina R. Molinari (Thornhill): Thank you very much for your presentation. As we've been travelling across the province and listening to different views from different people, we've heard a number of presentations from OSSTF. There seems to be a consistent stream, yet there are individual situations which you've raised, and we appreciate your doing that.

Just some clarification. I have a couple of questions and I don't know if I can get them all in in two minutes. Just so that I get a better understanding of the school board-from your presentation it's the District School Board of Niagara-you indicated 22 regular schools and one adult learning centre and somewhere here you said there are 3,400 kids?

Ms Hanes: No. There are probably over 15,000 students, but just for language and speech pathologists we have 3,400 special-needs students who need those services, and those are all the people we have to serve them.

Mrs Molinari: So in 15,000 students, there are 3,400 students who need speech and language. OK, thank you. Of the 22 regular schools, how many are elementary and how many are secondary?

Ms Hanes: They're all secondary.

Mrs Molinari: They're all secondary, because you represent the secondary. That's not the full Niagara board. Then there's the elementary component.

Ms Hanes: We have 1,050-some teachers. The elementary teachers are something like 1,900.

Mrs Molinari: I'll focus on that. I was just trying to get a picture of how big the board is and the school is.

I appreciate your comments on the fact that the Lincoln and Niagara south boards were already doing all the things that the province wanted them to do. I have to say that not all the boards across the province were doing that, so it was necessary to put some things in place that would allow other boards to be as efficient as the one you've indicated. There were some that had some very efficient ways, and we're looking at those to come up with the best practices and share that with all the other boards. I thank you for that.

Ms Hanes: But part of our problem here was that we were then penalized for it. Where other boards were given mitigation monies, the fact that we had been fiscally responsible was never considered. It made it much more difficult for us to meet the demands of the government when we had already cut. There wasn't a lot of fat for us to cut as far as our administration and as far as our consultants. At a time when we have to implement all these new changes, and at a time when department head structures have been removed and department heads don't have the time to be master teachers in the schools, we need consultants. We need people who can say, "Okay, here's what you have to do to make the implementation of secondary ed reform successful." We don't have those people.

The Chair: Thank you.

Mr Bradley: Excellent presentation. I'll only be able to focus on a couple of areas, obviously. One is going to be special education. As an educator, you would see the consequences of not addressing the special needs of those students who can be disruptive in the system because of the problems they experience. They simply are unable to cope. What happens if we do not put that investment in special education, both at the elementary and secondary schools? What are the consequences for those students? What usually happens to them?

Ms Hanes: They become throwaway children. Unless they come from wealthy families where the parents can provide the support and some form of education so that these students then can find a job, they become unemployable. No employer will look at them. Often now the schools provide the training so they can go out and find jobs where they feel proud and they earn their own way. That's not going to happen.

It's these students I am most fearful for and whom the teachers in our board are fearful for, because right now we don't have any program or any path that says, "This is what you're supposed to be doing with these students." From my understanding, we have to wait for another whole year before we get anything. So teachers are doing what they think is best for those students who are entrusted with their care.

Mr Bradley: My second question deals with the students when they leave the secondary system and go to post-secondary. Today they face drastically increased tuition fees, huge increases in accommodation costs and other ancillary costs that we see for post-secondary education. One effort was made with the Millennium Scholarship, but the province decided it would take that money and put it in its own coffers instead of allowing it to go to the students.

What is the consequence of high tuition fees-huge ones, particularly for professional programs-and other costs in education at the post-secondary level?

Ms Hanes: Fewer students are choosing to further their education. This is going to cost us all in Ontario, because we are a knowledge-based economy. I think it's very short-sighted on the part of the government to throw roadblocks in the way of young people who really want an education.

I would have been one of those people, because I came from a family of seven. My father was a railroad worker. We did not have a lot of money. Unless I had grants and scholarships available to me, I could not have attended school. Then I would not have gone on to further make a contribution to Ontario.

Just a few days ago, at the BEC conference where Jane Stewart was speaking, at my table sat a young man I had taught at Welland high. He was now working for the parks commission. It's those kinds of successes that make teaching so rewarding. Fewer and fewer of our young people are going to have that opportunity to contribute to a prosperous Ontario, and that is a great shame.

The Chair: On behalf of the committee, thank you very much for your presentation this morning.

Ms Hanes: Thank you for having us. I had lots more to say but not enough time.

Mr Bradley: You should be in the Legislature, where it happens all the time.

1030

ONTARIO CHILDCARE COALITION

The Chair: Our next presenters this morning are representatives from the Ontario Childcare Coalition. If you could come forward, please, and state your name for the record.

Ms Libby Walters: Libby Walters, Ontario Childcare Coalition.

The Chair: On behalf of the committee, welcome. You have 30 minutes for your presentation this morning.

Ms Walters: Thank you for the opportunity to address this group. As a child care worker and trainer of child care workers for over 20 years, I sit on the executive of the Ontario Childcare Coalition. The brief I will be presenting to you is similar to one that some of you would have reviewed in the Toronto hearing. That's why I did not provide it for you. I will be presenting it today with my own additions, and that is why you don't have copies.

I work at a community college where I train early childhood education workers, but I also work in child care. I am fortunate to be in a setting organized by OPSEU, and that is why I'm here today. I really see that we need to draw this government's attention to the issues in child care.

As you probably know, the Ontario Coalition for Better Child Care was founded in 1981, with a mandate to advocate for the development of high-quality, non-profit child care services in Ontario. The organization includes representatives from education, health care, labour, child welfare, injury prevention, rural, First Nation, francophone, social policy, anti-poverty, professional, student, and women's organizations. The fact that I'm here is because we have a women's organization called the Provincial Women's Committee in which child care is one of the issues that we strongly support.

In addition, we serve community-based child care programs and local coalitions across the province, so we're linked right across the province, trying to give the support that's needed to programs, centres and home care providers who are out there on their own. It's a very fragmented system. Unlike the system you just heard about which has been highly organized for many years, our system has been struggling. Groups like the coalition help to bring it some support.

The coalition is a public awareness organization bringing benefits to early childhood education and attention to the public and policy-makers like yourselves.

The work of the coalition covers a wide range of activities. It monitors provincial child care policy and legislation, and lobbies for changes and improvements. It develops policy alternatives for government consideration to improve the quality and management of and the accessibility to child care services. It develops books, manuals, fact sheets and news bulletins on child care policy and operations for use by child care programs and early childhood education training programs-that's what I'm a part of-and also by parents and the general public. It conducts public information campaigns through written materials, videos, public service announcements, public speaking and media relations campaigns.

The coalition was responsible for helping to promote wage grants which came out in the 1980s and has helped to keep people employed at a decent living in the field. We also lobbied for pay equity, because this group was going to be excluded in the pay equity legislation because of its being a female-dominated occupation. The coalition is constantly out there trying to improve the lot of these workers.

The coalition also conducts research and provides a variety of services to assist community-based child care programs. A lot of the coalition's funding has been cut over the years, so one of the ways it can continue to survive is through getting research grants. That has been very helpful to us to be able to then provide the information to the public as to what's happening in our field.

We participate in an array of advisory committees, task forces, community planning bodies and child development associations, and play an active role in the development of high-quality child care services at a local level by offering information, training workshops, supports and advice for child care programs and allied service organizations.

The current environment in Ontario has seriously affected the accessibility of quality services and threatens to destroy the entire system, which was once the envy of every province in this country. Although the Ontario government maintains that it is spending more on child care than any previous government, analysis of the provincial allocations for regulated child care shows the difference of $70 million between 1995 and 1998. The actual annual child care expenditure per child has dropped 15% since 1995, from $281 to $238 per child. In addition, between 1995 and 1998 the number of children under 12 with mothers in the workforce has increased by 70,000, but only 19,000 new child care spaces were created. This came from the Child Care in Canada study, from the child care resource and research unit at the University of Toronto.

It is clear that the present system is not responding to the needs of families in Ontario. Some of the additional pressures that are affecting child care include-it's interesting, because I've spoken on this before, and people who see a lot of these pieces I'm going to talk about as separate don't realize that when you put them together they all impact this particular sector quite desperately.

The first one is municipal downloading. The downloading on to municipalities of child care costs was fully implemented in January 2000. In 1997, when the decision to download was initially made, parents and other members of the child care community, as well as municipality representatives, lobbied the province strenuously so that we could keep 100% of the subsidized parent fee revenues, worth $25 million, in order to protect existing subsidies.

Recently, the province reversed this decision, thus downloading an additional financial burden to the cash-strapped municipalities. Municipal governments are still trying to assess the impact as they prepare their budgets and it is clear that without additional provincial funding, municipalities will either increase property taxes or cut funding to public services and community-based programs, such as child care. Every time a municipality sets its budget, this will have a direct impact on the centres and their workers because the next impact is just not the parents and the children, but also people who work in this field and to whom I'm directly related in training.

The Harris government is also privatizing child care. In some ways, instead of privatizing the services through provincial legislation, the province has downloaded the services to the cash-strapped municipalities. They're responding by saying, "OK, deregulate; privatize." That can cause additional impacts on the quality of the program.

The privatization of municipal child care programs: Traditionally, these fully subsidized municipal programs were established in communities where there was no other child care available or in neighbourhoods with very low-income and high-needs and special-needs families. Staff training and qualifications reflect these realities.

To date, as a result of downloading, facilities in York region and Elliot Lake have been closed and their services contracted out to the community-based sector, where staff with fewer qualifications and who earn lower wages will have to deal with this high-needs population without the appropriate supports. That flies in the face of the work that we're trying to do in the college sector to train these people, when they can't get jobs with decent wages, and the programs are then not available for the children as well.

This underfunding of community-based subsidized programs-their staff are struggling with per diems that have been frozen for the last six years. Contending with these funding shortages, municipalities are not increasing per diems to reflect the annual costs, and the actual costs as well. As a result, parent boards are forced to increase parent fees and cut funding for outings, games, supplies and educational materials, as well as staff wages and their benefits. Clearly, program quality will deteriorate if funding is not restored.

The next one is rationalizing wage grants to the child care workers-wage grants which we fought for, as I said, back in the 1980s. Wage grants were implemented in the child care sector because public policy-makers recognized the relationship between quality child care and a stable workforce. In its downloading process, the province gave municipalities the discretion to reallocate wage grants as a flawed option for managing increased child care costs. If acted upon, the same pot of money will be used to provide grants to new staff in non-profit centres who currently don't receive grants, possibly to staff in the profit sector who traditionally have been excluded from the bulk of the grant.

Child care workers in the non-profit sector remain grossly underpaid for their work, even with wage grants. The coalition is opposed to the idea that these staff should be subsidizing the wages of child care workers in non-profits who don't receive grants and who are even more grossly underpaid. It just sets workers against workers. Many workers in our field don't know their status. Their funding comes in bits and pieces. There's a grant here, there's a subsidy there. It really makes for a lack of job security and it makes it a very contingent workforce. I think the stats are that one in five will end up leaving within about five years or less than five years. They don't stay in the workforce, which is a waste of training and a waste of good people.

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I have also participated in the development of a health and safety training module with the Workers' Health and Safety Centre. What was interesting-we were looking at the health and safety of the workers, so you would be thinking about exposure to chemicals and musculoskeletal injuries, and we did look at all those things. But the additional thing we looked at was the stress of lack of job security and low wages. I think those things are really important to mention here, because what is happening with the rationalization of wage grants and the municipal downloading is that you're impacting this workforce more and more and making them more and more disadvantaged, which again affects the quality of the program.

Furthermore, some municipalities are considering including the for-profit sector in their reallocation proposals. Reallocation will result in lower wages for the majority of child care staff. Where reallocation includes for-profit providers, it will represent public dollars being used to subsidize private businesses that are not accountable to the taxpayers. So what will happen is that the wage grants and subsidies that are going into the hands of private for-profit operators will go into their pockets, and that's where our tax dollars are going, as opposed to going into the programs and to paying the staff adequate wages. We just can't accept that.

Ontario Works child care is another impact. Municipalities' inability to implement this program was documented in the KPMG report which concluded that the Ontario Works program could not succeed in the long term with inadequate access to child care. It predicted that children of Ontario Works clients would be forced into informal care irrespective of parental choice. Part of the reason for that is that the amount of money provided for child care is not adequate to pay for organized child care, so parents will make a choice of perhaps a family down the street and unregulated care, which puts children at high risk.

Some municipalities have indicated that they will use only unregulated care for these children because of the lack of adequate funding. These children are already at high risk and it is they who benefit from participation in quality, regulated child care services.

This is the first time public policy in Ontario has created two tiers of child care service by forcing low-income families to use unmonitored care. As a result, these parents will be put in the unacceptable, unconscionable position of having to leave their children in settings of dubious quality and safety in order to access the money they need to feed and house those same children.

Privatization through the reallocation of funding to the for-profit and unlicensed sectors does nothing to address the needs of thousands of parents already on waiting lists for subsidized quality child care services. Privatization means children being placed in care of dubious quality, parents losing equal access to benefits for quality services, fragmentation of an already fragile network of services, increased parent fees, deterioration of wages and working conditions for child care providers and a loss of accountability to taxpayers.

The province has also pursued other initiatives which, unbeknownst to them-but I'm going to let you know-have a really negative impact on child care services. One is child care in schools. Some 40% of Ontario's licensed child care centres are in schools. However, with recent cuts to education, as we just heard from the previous speaker, they do not treat the child care centres in the schools as legitimate school expenses. If forced out of schools, child care programs have no capital funding to relocate.

Under the previous government, before the Harris government-and you probably know this-new schools were to have child care centres, every one of them, and that was a really good way to approach it. Now schools are closing, centres are closing and if any new schools are being built, child care centres aren't a part of that. So we're really going backwards in that regard.

The coalition completed a survey to determine how child care programs in schools are being affected by the government's policies. The survey data reveals that child care programs across the province are facing eviction, increased rental costs and reduced space. These are many issues that are jeopardizing an important link between child care and the schools. The one really wonderful advantage of that for parents-many of you who are or have been parents or grandparents know that if a child is in child care and is in kindergarten, there is a real concern, if you are a working parent, about how you get your child from half-day kindergarten to child care. Well, if the child care centre is in the school, they just walk down the hall. It's such a safe situation, yet we're closing child care centres in schools.

Cuts to capital funding and the playground initiative are something new that's happened. In 1995, the government eliminated capital funding for child care programs, so that wasn't new, but the impact of that is what's happening this year. In September 1999, the Ministry of Community and Social Services had a new playground directive requiring all operators of licensed child care centres to meet new Canadian Standards Association standards for outdoor playgrounds. All licensed child care operators were required to develop a playground safety policy.

While this on the front end sounds really wonderful, what ends up happening, because there's no capital funding, is that the child care centres are forced to dismantle their programs-it's been quite well publicized in the paper-and then have nothing in their playground because they can't afford to refurbish it. I sit on the board of a child care centre in Hamilton-it's located in a church-and our playground has been deemed below standard. There's no capital support, and we're going to have to go begging and pleading to find money because right now there's nothing in the playground for the children. We've been given five years by the Ministry of Community and Social Services to bring it up to standard. I note that the municipality in the city of Toronto is giving 20% funding to help and they are giving them seven years to bring their playgrounds up to standard. But that's only 20%, and where's the rest coming from? I think it needs to come from the provincial government.

While the child care community supports the move to ensure that outdoor play environments are safe, we are astounded that the government would expect to implement such a policy without any training or capital funding. Successful implementation of this directive requires a partnership. If the government is serious about keeping children safe, it should ensure that necessary resources and training are available to make this directive successful.

The next item that has affected child care is the changes to the OSAP regulations, OSAP being the student assistance program. The decision in 1996 to remove parents in post-secondary education from social assistance and eliminate the child care bursary is still having a devastating impact. Low-income parents struggle for a better life for their families. They are graduating with untenable debts and are the only parents expected to borrow money to pay for child care. Again, working in a college setting, I see this all the time. Many of our clients are parents who are returning to school so they can get a better job. They need child care in order to do that, yet they're just building up huge debts to do that, which doesn't give them a good start.

Pay equity, which I mentioned before, has also impacted the programs. While legislation mandates that child care programs continue pay equity adjustments beyond 1998, the government refuses to flow additional money to meet this obligation. Child care programs are being forced to decide between making the pay equity adjustments and accumulating debts that will become unsustainable, or discontinuing further adjustments, putting them in direct contravention of pay equity legislation.

After many years of advocating for children, the coalition has come to appreciate a holistic approach to providing support for the early years, but families in Ontario need help to support them through the parenting cycle. In Ontario, parents need a judicious mix of benefits and services that are targeted to meet the identified needs and not designated to favour one family type at the expense of another.

The next part I'd like to talk about is a little bit about the background and research which has been fairly well presented publicly, but I'd just like to put it together for you so you see where we're coming from.

The child within the family and within society: The formula for good child care is no mystery. Extensive research shows that quality programs have high adult-to-child ratios, consistent caregivers, small group sizes, appropriately trained and compensated staff, and an adequate, safe physical environment. These elements of quality care depend on adequate public funding, non-profit delivery, parental involvement and enforced regulatory standards.

Numerous reports and studies from experts in the areas of social policy, health, economics, education and child development agree that the best way to support children is by supporting their families through a progressive family policy. A recent University of Toronto study entitled The Benefits and the Costs of Good Child Care established that for every $1 that government invests in quality child care services for children aged two to five, there is a $2 return in increased labour productivity and decreased social costs. The study demonstrates that child care is a prudent and productive use of scarce public funds.

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The National Council of Welfare stated that many social programs support families, but child care is the backbone of them all. The Early Years Study, commissioned by the Ontario government, envisioned the development of a system of early child development and parenting centres to support children from conception to formal school entry, and also support their families. This concept ensures that optimum parenting and early child development support the most sensitive period of brain development. That was in May 1999.

The Federal-Provincial-Territorial Council on social Policy Renewal found that the quality of child care received in the early years directly affects the way they will think and learn and has a lasting impact on their future abilities.

The Royal Commission on Learning found that a major factor in future success in school is participation in quality early child development programs.

The Ontario Coalition for Better Child Care is calling on the provincial government to invest in the future of Ontario by developing a comprehensive system of early childhood development services, including child care, to support families during the important years of child development. We know from the volumes of research available to us that the early years are too important to waste on the patchwork and disjointed system and the diminishing services available in Ontario.

Why do we need a system of early child development services? I've just mentioned that it supports healthy child development. We recognize that regardless of parents' employment status, early child development opportunities benefit all children and help them realize their full potential at each stage in life.

We need a system that fosters economic growth. Early childhood development services enable parents to work or be trained so they can enter employment opportunities. Flexible, reliable, affordable services help parents maintain their employment.

We need a system because it creates jobs. With the government invested in early childhood development services, we will create thousands of jobs for our early childhood education graduates over the next 10 years.

We need a system because it reduces child poverty. Affordable early child development services allow parents to participate in the workforce and break them out of that poverty cycle.

We need child development services to invest in our future workforce so that we have children who have the best start in life and who can become skilful, competent workers. It is more cost-effective for the government to invest in high-quality services now than to pay later for the results of low-quality or non-existent services.

The Ontario government can make the development of early childhood development services a high priority by co-operating with the federal government in its negotiation of a national children's agenda and by allocating their own additional resources. When I went to speak to my own MPP, that's the answer he gave me. My own MP gave me the opposite answer. One said, "Go to the federal government." The other said, "Go to the provincial government." I'd like to see you guys work together. You've got to work together on this.

The coalition recommends that the Ontario government return to its traditional leadership role in developing licensed quality child care by making substantial new investments in this sector. We also recommend that the government undertake a five-year plan to increase child care spaces and provide base funding for child care services through the creation of a pilot project modelled on Quebec's universal child care system. Ontario used to be the leader in child care in Canada. Quebec and British Columbia are moving far ahead of us now in providing services for their children and families. While there's been criticism of Quebec's model, it has a lot of really important tenets that we need to look at and consider in Ontario.

The Ontario government must provide ongoing funding for mandatory pay equity adjustments in recognition of pay equity principles. The Ontario government must immediately dismantle Ontario Works and invest in a job creation and training program that will lead to permanent jobs and access to quality child care for the unemployed and for people on social assistance.

We recommend that the Ontario government restore all funding cuts from education.

We recommend that the Ontario government reinstate the policy that required all new school buildings to include child care space. I mentioned that before. I think that is so important for the safety of our children.

We recommend that the Ontario government make new and substantial investments in children and address the serious issue of child poverty.

We recommend that the Ontario government restore capital funding for child care, provide the necessary resources and training to child care programs to enable them to meet CSA standards and implement safe playground policies.

Finally, we recommend that the signatory to the National Children's Agenda, the Ontario government, demonstrate vision, political will and commitment to regulated, licensed, non-profit services for Ontario's children and families in the next provincial budget. That's why we've come to you today.

Just a final note from myself as a worker and an advocate in this field: I have trained early childhood education workers for over 20 years, and I have seen the system struggle. This government needs to direct their energies to a system of child care that will give children a better start. It needs to recognize the workers in this system who are well-trained and need to be fairly compensated. They are a key element of the quality care that is an essential component for our social infrastructure. A coordinated system with sufficient public funding is what we need. Thank you.

The Chair: We've got time for a quick question from each caucus. You have one minute.

Mr Arnott: Thank you very much for your presentation. I certainly learned a great deal from your presentation this morning. We've heard from many child care advocates in the course of our deliberations as a committee, but you've provided additional information that will be helpful to the committee as well as the Minister of Finance.

I listened carefully to your presentation, but I don't recall if you mentioned the Ontario child care supplement for working families, the program which spends about $200 million for low- and modest-income families. I think it's up to $1,100 per child under seven. Do you think that's a good approach to ensure that there is a program to assist low- and modest-income families and allow them choice in their child care decisions?

Ms Walters: I think it's part of the answer. One of the problems in allowing choice is that if there's only a set amount of money, similar to the Ontario Works program, parents could very likely choose unregulated settings because they're cheaper. The problem is that the system is fragmented. That's only one small part of it. Yes, parents need assistance, but we have a system that's so fragmented. It's regulated, but it's here and there, and parents could choose something that could possibly be inappropriate. We need to work with parents. We need community centres and support centres for parents to help them make those proper choices. That's not out there.

Mr Bradley: The problem that you identified of the various levels of government working together is indeed a very valid one. I was getting a number of telephone calls as a provincial member. When the federal government increased the amount of money that is provided for child care, the provincial government deducted a certain amount. When one level of government provides more money, regardless of what level of government that happens to be, would you think it legitimate for the other level of government to deduct that much so that ultimately the people don't get any more money at all?

Ms Walters: Are you kind of leading me down the path of saying that we should not be working together? My comment to that is that the two levels of government need to work together on this. That's the major problem. We need a child care system nationally, but I think Ontario needs a system. What you're talking about is giving dollars, taking dollars away. That isn't the answer. I'm sorry, that's just not the answer.

Mr Bradley: Good. Glad to hear you say that.

Mr Kormos: Thank you very much for taking the time, notwithstanding that the coalition made a presentation in Toronto as well. I don't know who your MPP and MP are, but I'm sure that neither of them are New Democrats-

Ms Walters: They're not.

Mr Kormos: -because we have the luxury of criticizing both the province and the federal government at the same time.

One of the problems, and it happens around here, is that you've got right wing radio talk show hosts still pounding away at the irresponsibility of parents who would utilize child care, not understanding that it isn't just about taking care of children while a parent or parents are working, but it's also good for the kid, for Pete's sake. You do it because the kid should be in, maybe not five days a week, some sort of disciplined structure where there's professional input.

How do we respond to those dough-heads, and I'm putting it generously, those afternoon radio talk show hosts who put under attack parents who would choose child care for their children? Do you know the kind of dough-heads I'm talking about?

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Ms Walters: Yes, I hear it all the time, and the whole thing about babysitting and how you don't need training. I've been involved in this field for 20 years. I think what we've been trying to do in our sector is broaden the area of support. Economists from the University of Toronto are talking about the economic sense of having child care. Health care reports-Dr Fraser Mustard, people like that, who are well-recognized professionals, are getting up and speaking about this. It's not just, "Where do you put your kid when you don't need it?" These things are well-documented, that we need proper, adequate care, we need it to be accessible, we need it to be affordable and we need it with trained, qualified people.

How do you deal with these talk show hosts? I think you have to educate them. I think more of us need to go and talk with them. We need to bring people in and see what's happening in the programs. As a group, child care workers need to become advocates for themselves as well. But the support of people like you, who maybe aren't familiar with the field, is really important. Coming before you today has been that opportunity to help to educate you. I think that's one of the things, but also the support of the government-this government or any government-is what we really need, to look at it not just as a fragmented give-a-dollar-here, take-a-dollar-there, but as a system that really works.

The Chair: On behalf of the committee, thank you very much for your presentation this morning.

Ms Walters: Thank you.

ST CATHARINES PROMOTION TASK FORCE
NIAGARA COLLEGE FOUNDATION
ST CATHARINES CHAMBER OF COMMERCE

The Chair: Our next group this morning is the Niagara College Foundation and St Catharines Promotion Task Force. On behalf of the committee, welcome. You have 30 minutes for your presentation. Could you please state your name for the record.

Mr Don Johnston: Good morning. My name is Don Johnston, and I'm the chair of the St Catharines Promotion Task Force, chair of Niagara College Foundation, and a past president of the St Catharines Chamber of Commerce. Actually, I will have some comments on behalf of the chamber of commerce as well in my presentation.

Initially, I'd like to talk about Niagara College as an example of some of the current problems encountered by colleges in Ontario.

The Niagara College Foundation was established in 1989. It has 22 directors, including the college president and a member of the college board of governors, as liaison to that board.

The foundation has two primary roles. The first is fundraising for capital campaigns: One we have just wound down in regard to financing a new campus at Niagara-on-the-Lake, plus some major additions in Welland, plus fundraising for student bursaries and scholarships. We have now raised about $1 million, the income from which is used for bursaries and scholarships. Again we have to thank the government for its two-for-one program wherein they matched public funds that we raised.

The other function of the foundation is advocacy on behalf of the college throughout Niagara and beyond. It is in that role that I am here today.

Niagara College was founded in 1967 and has three campuses in Niagara. The main campus, also the administrative centre, is in Welland. It was built in the late 1960s and early 1970s and has some recent additions. It has currently 3,260 full-time students.

Glendale campus, the new campus in Niagara-on-the-Lake, was built in 1998, replacing two buildings which were over 100 years old and were the worst college buildings in the whole system. It currently has 1,400 full-time students. That building was initially designed for 1,200 students, with growth to about 1,400, but we have moved in with 1,400. Because of changes in student choice and the programs offered at that campus, it's already full.

We also have a hospitality and tourism centre in Niagara Falls which was opened in 1989. It has 420 full-time students. A major increase in that building is planned to satisfy business demand for more graduates. As new hotels and restaurants are constructed in the Niagara Falls area, there has been a greater demand for our hospitality and tourism students, and we are in the process of planning a major addition to that centre.

In total, Niagara College has full-time enrolment of 5,080 and 15,000 registrations in continuing education programs at all three campuses. Its current-year budget is $54.8 million.

Niagara College, like most of the 25 community colleges in Ontario, has some specific problems which should be addressed in the next budget or budgets. Some 33% of the 25 colleges already have accumulated deficits at the end of March 1999. Our forecasts indicate a similar situation at Niagara if our problems are not addressed soon.

Our information systems are badly out of date. The cost to update these systems averages $2.5 million to $3 million per college. At Niagara, upgrades and replacements of hardware and software will cost nearly $1.8 million. In addition, the ongoing cost to maintain appropriate computer and non-computer equipment is $750,000 and $400,000 respectively each year. There currently is no separate funding from the province for these costs, resulting in continual deferral of new purchases.

Because most college buildings are 30 to 40 years old, all of them have serious deferred major maintenance costs. Prior to moving to the Niagara area, I was chair of another community college in another city and I have visited 23 of the 25 community colleges in Ontario. I can say that there are a fair number that need upgrades. The cost to restore these facilities at Niagara is estimated to be about $4.5 million, and throughout the college system, $410 million.

Because of insufficient funding, colleges have also deferred other types of expenditures. For example, at our learning resource centres in the three campuses, only 19% of circulating books are less than 10 years old; 58% of these books now predate 1980. Obviously we're hooked into the Net, but someone must have written a book upgrading the educational processes since 1980. Possibly you could throw some light on that, Jim. This situation at Niagara and other colleges falls far short of the standards recommended by the Canadian College Learning Resource Centres.

Because of the 15% drop in funding in 1996-97, class size per instructor has increased 19% during the last six years. This has resulted in less time available to assist individual students.

The various deferrals and changes in class size are largely the result of conditions which are beyond the control of local college administrations. For instance, provincial grants per full-time student, and in total, have declined significantly during the last 10 years. There is a chart in my presentation which shows that in the 10 years ended 1997-98, the grants per student for elementary and secondary school boards increased 8.2% to $7,222; per student grants to universities in Ontario decreased about 2% to $10,854. However, to community colleges, in the 10 years to 1997-98, the funding per full-time student has declined over 20% to $6,770.

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Annual increases in tuition have been generally capped. There is a 10% cap on most courses. There are some specialty courses that have been uncapped and their costs per student have increased. However, the fee increases, while significant to students, are far from sufficient to offset reduced grants. As you know, student intolerance of these fee increases is growing and becoming more militant.

As an offset to that, the grants in the two-for-one bursary program have allowed us to give out more bursaries to needy students. Basically our program of bursaries and scholarships has moved away from scholarships rewarding marks to one of bursaries awarding qualified students financial assistance, not only in the first year but in continuing years. That has helped significantly.

Salaries for academic, support and administrative groups are either negotiated centrally or set at the provincial level with very little input locally. Salaries and benefits of any community college represent about 80% of the annual budget and they obviously continue to increase each year.

We sincerely appreciate the government's financial support for new buildings and new specialty equipment. Of course, a case in point is the $32 million that formed part of our granting for the new facility at Glendale and also for the partial financing of the $11 million that has gone into upgrades in Welland. In addition, the provincial government recently announced a $1.6-million grant to purchase state-of-the-art equipment in our advanced manufacturing and research facility. In that area our equipment was decades old and it has now been replaced, and our students are now operating with equipment that they will encounter when they go out into the workforce.

However, the demand for work-related, technology-based education grows, but colleges under the current grant system are progressively hindered by lack of adequate funding to provide up-to-date replacement resources to supply such training.

We urge the Ontario government to address this problem in the next budget, particularly to.

(1) Provide funding for cost increases, such as salary costs, which are negotiated provincially.

(2) Provide funding to upgrade computer and other equipment and maintain it thereafter. This is a major suggestion on our part and on behalf of all the colleges;

(3) Provide funding to restore older buildings to a proper state of repair. As I said, we've got good support for new buildings, but our 30- and 40-year-old college system requires some upgrading and repair.

(4) Provide funding for growth programs such as agribusiness. There's a major increase in the student population in our agribusiness area because our Niagara Peninsula is one of the main agribusiness users of our students. Hospitality-we've spoken to that before. Integrated manufacturing and applied research and international trade-we have one of the pre-eminent international trade courses. Our students are accompanying these world tours. They represent Canadian firms and they are all university graduates. We have 132 university graduates attending Niagara College-at least last year we did. I don't know what the figure is at this moment. That says that a lot of them are looking for specialty assistance in their education, and we're there to provide it. Currently, funding for growth programs only applies to computer-related programs.

(5) Modify the enrolment-driven formula-growth for growth's sake. I believe monies should be directed to growth programs rather than just increasing the funding per student. If the province feels there are certain areas of economic growth that we need to support and to grow, those are the ones that should receive the greatest amount of funding. Maybe it can be addressed through an increase in general grants, if that's the easiest way, but that isn't necessarily the best way to treat it.

Those are the recommendations of our college foundation.

I've got a brief comment also on behalf of the St Catharines Promotion Task Force. It was established in 1990, receiving contributions from 246 businesses in the St Catharines area. Its mandate was and is to support projects which assist existing business to stay and grow and also to support projects to attract new firms and employment to this area.

One of our major concerns has been the level and annual growth of municipal taxes in St Catharines and throughout Niagara. We believe that major restructuring of municipal services and costs must occur in Niagara.

We think that a single- or three-city solution will happen within the next few months, whether agreed and decided locally-and that's what we're still working on-or whether out of frustration it is ultimately mandated by a provincial adviser. Hopefully, whatever solution is decided, aggressive restructuring will start immediately and continue for the next 12 to 15 months.

In addition to being past president of the St Catharines Chamber of Commerce and past president of the Chatham Chamber of Commerce, I have followed very closely the restructuring of Chatham-Kent and the savings, something like $11 million, $12 million per year, that have resulted from the restructuring down there. It takes time, though. It takes more than the nine months Chatham-Kent had. In Niagara, with 400,000 population, it's going to take 12 to 15 months to do it right.

Such restructuring will entail significant one-time transition costs for personnel downsizing, building closures, new signs etc. The transition government or governments will require provincial assistance for this task, as did other restructured governments such as the Chatham-Kent area. We suggest that some funds be allocated by the Ministry of Municipal Affairs for this situation.

Ultimately, the businesses and citizens of Niagara will receive more efficient and less costly municipal government services, but we will require your help over this initial hurdle.

I have just a couple of brief comments relative to the chamber of commerce. Some of them will be addressed in another presentation. In quick summary, they're indicating that in order to maintain Ontario as the most competitive jurisdiction in the country, we have to move beyond deficit elimination and dedicate some of the surplus to debt reduction and continue to balance budgets.

One of the significant Niagara concerns of course is the mid-peninsula transportation corridor. There's been a lot of talk about it. We would like to see that because since the 1999 report, Niagara Frontier Gateway Study, nothing really has been done. A joint MTO-Niagara study was started and it's still in limbo, and I'm not too sure what "in limbo" means because it could be deferred for a short time or a long time. We believe that the assessment, planning and construction of a new thoroughfare through Niagara will help our general economy. We encourage the ministry to proceed with the needs assessment study so that we will have sustained economic stability and growth in the Golden Horseshoe.

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Balancing the budget: We commend the government for reduced deficits, and I understand that the estimated deficit will be $1 billion in this fiscal year and that balancing is targeted. We suggest that in the current budget, the minister forecast the amounts of surpluses he estimates for the next five years and, to follow that up, to move towards the reduction of the debt-to-GDP ratio back to the 15% historical level within the next five years.

Finally, to maintain the Red Tape Commission and to see that the commission also looks at how the government can utilize technology to simplify the process of delivering of government services. The comments regarding the municipal assessment and taxes will be presented in a few minutes, so I won't speak to those.

In your package there is also a copy of the Niagara College 1999 annual report. I'm available for questions.

The Chair: We have two minutes per caucus and we'll start with the official opposition.

Mr Bradley: Thank you, Mr Johnston. You're wearing about three or four different hats today. I can't think of anybody who's more knowledgeable about the community college system than you are, and as a person from business and industry you would understand the importance of the community college to our future.

You are proposing to what is now called the SuperBuild Fund, which is a renamed existing fund for capital distribution in the province, in my opinion. I guess I could ask you this question, because you've covered so much so well: What kind of impact would the approval of the funding from SuperBuild on your applications have on the community college?

Mr Johnston: It means that certain projects will move forward faster and others will have to be deferred. With our limited facility people we can't do it all at the same time. Our greatest immediate need is an expansion of the facility in Niagara Falls. We have demand from incoming students which would double that facility. Architectural drawings are now underway to not only double the size of that building but also to build a residence which will not be funded by the college; it will be similar to the one in Welland, which is privately run. We have some of the best-known graduates from that course in the world-a graduate who was executive chef at Truffles in Singapore. I followed up and he's now executive chef of 14 restaurants at Bell'agio, which is the largest hotel in the world, running a huge staff. There are others similar to him. Our annual chefs' special dinners that are put on monthly encourage incoming students. We've got to provide for them but we're also encouraged to take students from outside Niagara because we are a specialty here and we've got some really top-notch instructors. To utilize them means that some of the incoming students are from outside of Niagara; they're coming from other areas of Ontario. So we're going to move forward on that.

We would like to have moved forward on things that have to be done in Welland. We have done a lot in Welland but there are a fair amount of other things to do. Because part of our funding will have to be public as well as government, whatever that ratio is-I think it's 20% or 25%-we can't just move forward on all the fronts at the same time. We're addressing that SuperBuild project initially on the Niagara Falls campus.

Mr Kormos: Thank you, Mr Johnston. You may or may not know that I'm a big fan of Niagara College, and I appreciate your presentation here this morning. You and I were becoming really good friends while you were making the presentation on behalf of Niagara College, but then you switched hats. I've got to tell you I disagree with the presentation made in other regards, except for the fact that I think there are people out there who concur about the three-municipal option. Tell them I'm confident we would be pleased to take on governance of the rural area, Thorold would love to take on governance of the industrial part of St Catharines, and Niagara-on-the-Lake I'm sure would take on governance of that tourist-dominated area stretching down south to Niagara Falls. I concur with you. Pelham, Thorold and Niagara-on-the-Lake would probably concur with the three-municipal option if it were designed as Niagara-on-the-Lake being the dominant community, Thorold the dominant community and Pelham the dominant community.

Mr Johnston: What would happen to your favourite place, Welland?

Mr Kormos: Welland and Fort Erie are renegade communities. They'll probably secede from somewhere.

Mr Johnston: Is there a question in this?

Mr Kormos: Yes, besides just having some fun with the fact that you and I disagree profoundly in that regard.

What do you say to the proposition that the Fort Erie survey revealed that most Niagarans appear not to want the imposed megacity options? What about grassroots democracy? I'm serious. What do you say to that, that people have a right to determine how they govern themselves?

Mr Johnston: You're suggesting that there would be a referendum?

Mr Kormos: Maybe.

Mr Johnston: I don't know that we want to run that up. If we're going to do this, we can't wait three and a half years for it. We need reduced costs. Whatever the mix of geographical cities is, I think we need significantly reduced costs, and Chatham-Kent proves that. It's only 10%, but they took 156 politicians down to 18. If you talk to the citizens now, two years later, they're very happy with it. The mayor and many others weren't at the time, but they're happy.

I don't know that the Fort Erie survey was sufficiently broad outside of the boundaries of Fort Erie. A couple of hundred people is not a good representation. If you watch channel 10 on Wednesday, Saturday and next Monday, you'll get my side of the story.

Mr Kormos: Fair enough.

Mr Maves: Thank you for your presentation. I note in your book that at the Maid of the Mist campus in my riding there's a room named after Mr Kerrio. I would encourage you to maybe name a room at the new Glendale campus for Tom Froese. With $30 million from the government for that, maybe you'd consider naming a room in that building after Tom.

One of the points you had in here is about who is intolerant of fee increases. There are more and more people, actually, who are continuing to enrol in colleges and universities, and that may be the type that will require more and more enrolment grants.

The other thing I want to ask you is, surely you believe that students should pay some portion of the cost of their own education, because there is a benefit to them. Do you have any thoughts about what percentage of the cost of their education a student should pay?

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Mr Johnston: I don't know. My one son just graduated. He now has four degrees. He hasn't got a job yet but he just got his MBA from the Ivey School of Business. That was $11,000 per year annual tuition, plus the cost of going there, which he and I financed. I don't know that he could have financed it by himself. Hopefully before I pass on I'll get some of that back. I don't know. I'm not counting on that.

But I don't know that there's a fixed figure. If you're going to move into an immediate high-paying job, dental hygiene-there are a number of types of jobs or positions that are so well paid immediately that we can charge, and I think they should pay, 50% plus.

We have one in Welland making microchips. We're the only college in Canada that manufactures microchips, and we can't keep our students until their graduation. They are being hired away in their final year, before they graduate, because the pay is so significant. It's very high.

The Chair: We've run out of time. On behalf of the committee, thank you very much for your presentation this morning.

WILLIAM BENSEN, LEE SIMPSON

The Acting Chair (Mr Ted Arnott): Is Mr William Bensen in the room? Would you please come forward. Welcome to the standing committee on finance and economic affairs. You have 15 minutes for your presentation.

Mr William Bensen: I'm William Bensen. I'm a rheumatologist. With me is Lee Simpson, an arthritis patient. We want to make a plea today for an investment in arthritis care, which we think will be an investment that will actually save money.

Let me give a brief outline. The outline is in the handout.

The impact of arthritis in Canada in undeniable. Already in Ontario arthritis is the principal reason for primary care visits and the principal reason for long-term disability, and as well is a very frequent user of our drug plans, our hospitals and surgery. With the aging population and the coming boomer bulge, it will overwhelm our medical and financial resources if we cannot develop new paradigms of management to tame what we call this awakening giant of health care.

In Canada, arthritis is the leading untreated but treatable disability. Arthritis is not always curable, but it is usually controllable, especially if treated early. Early treatment dramatically improves prognosis, but as well is remarkably cost-effective. In Canada, it is estimated that for every dollar spent now, $10 to $30 can be saved later. Immediate diagnosis is the cheapest option, long-term palliative care the most expensive and costly, yet in Ontario right now early management is virtually impossible.

The treatment that we use toward the goal of personal best in each patient is a combination of a management team and treatment modalities. In recent years, hospital-supplied management teams have been obliterated by cutbacks and there have been no new resources put into outpatient care. To give an example, renal dialysis patients have $4,500 of capitated professional care a year. The last estimate for rheumatoid arthritis patients is $50 to $70. In no place in Ontario have physicians been able to rehire the management teams of nurses and therapists, and therefore this appropriate care has become unavailable. Arthritis patients, however, when treated early and brought under control, usually return to or maintain their work and become taxpayers again.

So we have a problem with the management team, but we also have a problem on the drug side. The drug treatment for rheumatoid and osteoarthritis has advanced more in the past five years than in the previous 50. The non-steroidal, anti-inflammatory drugs which up to now were the baseline of our therapy have been replaced, and will be replaced, by these remarkable specific COX-2 inhibitors, which have the same potency but have the side effects and intolerability that we normally see with a placebo. Already we know that these drugs would save millions in terms of hospital costs and doctor costs, but these drugs are currently unavailable in Ontario in the government-sponsored plan and in many of the private-sponsored plans.

Similarly, we're getting new drugs that have the ability to turn off the disease process. We call these the DMARDs, or disease-modifying drugs. These drugs are expensive and the way you give them, sometimes intravenously, is expensive. We don't have a fee structure in Ontario that will even pay the cost of handling this. The $22 for a $500 cost makes these treatments also functionally unavailable. I believe, and the statistics show, that the short-term gain from these limitations will soon be paid in long-term financial and medical pain by our patients and by all of us as taxpayers.

In essence, I am here to plead for an investment in arthritis care, an investment which the evidence clearly shows will pay an annual dividend of about 50%. We believe that in the current gridlock of health care and the crisis it is going through, arthritis care changes won't happen. We need the resources now to replace the management teams which have been cut back by the hospitals, and to give us the new drugs that will do the job and allow our patients to get their disease under control.

We believe that an investment in arthritis care, coupled with new management paradigms on an outpatient basis, would save both dollars and people's lives and would be a win-win solution for the government, health care providers, the public at large and, most importantly, the patients.

I'll turn it over to Lee Simpson.

Ms Lee Simpson: My name is Lee Simpson. I'm here today as the incoming chair of the Arthritis Society, but I speak to you truly from the heart as an arthritis patient.

I was diagnosed with osteoarthritis at age seven. My drug of choice during the 1960s was aspirin, and I went from there to what they call the non-steroidal anti-inflammatory drugs, NSAIDs. These are drugs like Arthrotec and naproxin, and during the working and productive part of my life these kept my arthritis well under control.

In the mid-1990s, however, they started to take a toll. I was then publisher of Chatelaine magazine and happily working in my job when the grinding feeling in the pit of my stomach which I'd been feeling for a while erupted into a full-blown ulcer. I found myself in hospital with what was first diagnosed as a heart attack but turned out to be a very irritated ulcer. Well, there were no more NSAIDs in my life. When you reach that stage, they really don't help, and there wasn't anything that did.

For a year, in the most productive years of my life, I found myself reduced to someone who was looking, frankly, at long-term disability. In a year I went from a productive, working citizen to someone who couldn't move very well, couldn't walk upstairs, couldn't possibly sit all day in a boardroom meeting. These things were gone from my life.

I would probably have ended up in a very sad state of affairs, both physically and psychologically, you might well imagine, if it hadn't been for Celebrex, the first of the COX-2 inhibitors. It came along just in time. I have very recently had the courage, due to the health reformation that Celebrex has given to me-I'm able to exercise again; I'm back on the motorcycles that my husband and I so much love-I have entered a new phase of my career and I have gone back to school to do my master's of divinity. This is a reformation in my life that made me want to become more involved and tell the story.

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The second tiny little tale I want to add to that is the story of someone who's near and dear to me, my mother, who also suffers from arthritis. However, when she last year hit the threshold of the end of NSAIDs, the start of the ulcers, her doctor was most reluctant to prescribe Celebrex because she said she was concerned about my mother's pocketbook, and rightly so. We have many elderly female citizens particularly for whom having drugs that are not on government-assisted programs is a major difficulty, and a difficulty in the mind of the prescribing physician when it comes to alternatives to NSAIDs. Had I not persisted with the physician, my mother would not be on Celebrex. My mother today leads a happy, productive life and enjoys her grandchildren and all that life has to offer.

I hope that these two stories make a telling point and help you understand better from the citizen's and arthritis patient's perspective why it is so imperative to get drugs like the COX-2 inhibitors and the TNFs that are on the horizon that can help control arthritis and help those of us who suffer from it live with it rather than fall victim to it. Thank you, ladies and gentlemen.

The Acting Chair: Thank you very much for your presentation. We have just over a minute per caucus. I'll start with the New Democrats.

Mr Kormos: I'm no fan of pharmaceutical companies because I think they're greedy and rip off consumers left and right. But Celebrex, you're saying, isn't covered in the drug benefit plan?

Mr Bensen: That's correct.

Mr Kormos: And what's the cost to, for instance, a senior citizen?

Mr Bensen: The cost is about $1.25 a day for osteoarthritis, and it's equivalent or less for many of the other plans. In fact, you hear Bill Clinton arguing about the Americans coming across the border. That's because the company in Canada put it at 40% less than the States so it would be more available for people.

Mr Kormos: And the government is unresponsive to requests to put Celebrex on the list?

Mr Bensen: I think it's being processed, but so far there's been no decision made about it, as I understand.

Mr Kormos: That's nuts. It's whacko. No taxpayer would agree with the government not listing that, no fair-minded taxpayer. That's a problem our constituency office has on a daily basis, among things like home care, which we have big problems with, the reduced amount of home care available. Delisting of pharmaceuticals is one of the big problems we encounter on a daily basis. I wasn't aware of Celebrex, but I could list you a whole bunch of other pharmaceuticals in any number of areas of treatment-mental health care, other ailments-that have been delisted. Doctors are in a dilemma. People who can afford it get it; the whole rest of the world, including, obviously, a whole whack of seniors, are denied it. That's pitiful.

The Acting Chair: Turning now to the government side.

Mr Maves: Mr Kormos is right. What's pitiful is that the NDP delisted hundreds of drugs in the five years they were in office.

Mr Kormos: I didn't agree with that.

Mr Maves: You never agree with anybody, actually.

Contrary to that direction, we've actually added 700 drugs to the formulary since we've been in office. Obviously, you know there's a process in place where a company that manufactures a drug has to apply to a panel which then researches the drug, looks into the drug and then decides on whether or not it's going to be added to the formulary. You've indicated that that process has been undertaken already?

Mr Bensen: It has been undertaken; that's correct. In a number of provinces they are listed. Because we have a process in place in a sense to get health care and to get drugs, what we're asking for is a different initiative, a different step, because arthritis isn't going to be high enough on the radar screens of these committees to make those decisions, yet it's the investment that keeps pouring away.

Mr Kormos: Bart, you can make it happen. Just say yes.

Mr Maves: I don't have the ability to say yes. Mr Kormos knows that.

So that process is being undertaken. Do you know how far along they are in the approval process?

Mr Bensen: No, I don't.

The Acting Chair: We'll turn to the Liberal caucus.

Mr Kwinter: Mr Bensen, I don't know whether you know it or not, but I have introduced a bill in the House on alternative medicine. I have no interest in any specific treatment; I'm only interested in freedom of choice for the doctor and freedom of choice for the patient. That was really the intent of the bill, but as a result of introducing it-and it has now been introduced three times and it's gotten unanimous approval-one of the side effects of it is I have been inundated by people who tell me about all their complaints and all their different treatments. The most prevalent by far, like 20 to one, is people calling me about glucosamine sulfate, telling me how it helps their arthritis and they're saved by it. We don't have time, but I could tell you a story about a doctor at Mount Sinai Hospital who's doing a study on it. What can you tell me about that?

Mr Benson: In a nutshell, the data to date shows it does have an analgesic effect, and there is some data, that isn't perfectly put together because of the X-ray technology, that suggests that maybe it'll help slow the process. In a sense, it would be like a Tylenol. It would have an effect of about this much. The drugs we're talking about here have an effect of about this much and the data's very clear. There's no question, some people do get a response from the glucosamine, but it is not enough of a response to return them to normal life. So we tend to tell people that if they want to take it, please take it, because that will help, but you need the bigger things also, at the same time.

I wasn't aware of the bill; I'm sorry.

The Acting Chair: Thank you very much for your presentation. We appreciate your advice.

Mr Kormos: Point of order, Chair: I'm concerned about M. Beaubien, the Chair. He's been gone for some time. I'm not sure whether he's well or not. Should somebody go looking for him?

The Acting Chair: I think he's just fine.

Mr Maves: Could I make a motion that Mr Kormos go and look for Mr Beaubien?

Mr Kormos: You don't know how much I'd love to.

The Acting Chair: Thank you very much, Mr Kormos.

IAN SPRAGGON

The Acting Chair: I'd like to call forward Mr Ian Spraggon, if he's in the room.

Mr Ian Spraggon: I'm Ian Spraggon.

The Acting Chair: Welcome, Mr Spraggon. You have 15 minutes for your presentation.

Mr Spraggon: My presentation is not generic, but is related directly to the Niagara region. I will be brief.

I'll draw your attention to those charts I distributed. Down the left-hand side is the tax ratio and along the bottom are some of what we consider to be the competing areas to the Niagara region-not a difficult calculation. Obviously, as you can see from those charts, the Niagara region has an enormous property tax problem, which I suggest affects the economics and certainly obstructs economic development.

The Fair Municipal Finance Act, 1997, is quite specific when it says the tax ratio for residential/farm property class is 1. The act, to the credit of the government, I think really simplified the process. It was always very difficult for someone to appeal their taxes because they never understood where the calculations came from, and today a homeowner can understand where they came from and, without the expense of an expert, can figure out their taxes, ie, the tax ratio multiplied by the property value equals the taxes in dollars. They can then make an educated decision on whether or not to appeal.

The subsequent regulation, which gives the allowable ranges for tax ratios, gives us multi-residential of 1 to 1.1, commercial-industrial of 0.6 to 1.1. My interpretation of that is that the minister wants the tax ratio on commercial and industrial properties to be no higher than 10% of residential. Therefore, if I have a house valued at $400,000, my property taxes will be $4,000. My factory valued at $400,000 will be taxed at $4,400. The legislation, if I read it correctly, gives the municipality until 2005 to achieve the balance.

My concern and the reason for my presentation today is I'm not sure that the municipal politicians in Niagara have understood that the clock is ticking and that we're nowhere close to achieving these ratios. I'm not even convinced that they understand this despite the fact that we have 130 of them-one for every 3,000 of the population. The regional chair, as an example, on a recent television appearance quoted the Slack report of September 1999, which suggests that the taxes in Niagara are right in there with most Ontario communities. I would totally disagree. Let me give you an example. A $150,000 house in Milton, which most of us would agree is pleasant community, with good shopping, good highway access, an international airport nearby, GO train in rush hour, a lot more things than we have-taxes are $1,650, a 1.1 ratio. Niagara Falls, same house: $2,150, a 1.7 ratio. Real estate practitioners will tell you that house deals collapse for a whole lot less than that.

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With the tax ratios we now have in Niagara, this is the scenario. That $400,000 house has a ratio of 1.7 and the factory has a ratio of about 9. If you do the math, the house taxes are about $6,700 and the factory about $36,000. However, if my interpretation of the legislation is correct, those factory taxes should be closer to $7,400. How do we close the gap? We can pray hard, obviously, for another government in the next provincial election to rescind the legislation, or we prepare, I think, for an unbelievable increase in residential taxes. I don't see where else it's going to come from. I can almost guarantee you that you, the provincial politicians, will be blamed.

There are many examples, and I'll give you one excellent one. A friend of mine, employed at Brock University-he's not a dummy-wrote to me about his property taxes. He has a rural property of about four and a half acres and said that on the market value assessment he got a dramatic increase. Being a fair sort of person, he said: "I don't have a problem with that. I wasn't paying sufficient taxes anyway." Interesting. Then he got his notice, which came at the time of the actual value assessment from the province, and his taxes increased 21%. In fact, his taxes increased 15% because of the region and 5% plus because of the municipality. But that was not his position; his position was that it was the province doing current value assessment.

My appeal to this committee is to urge the finance minister to make these municipalities face the music now and persuade the government to put the citizens of this region out of their misery by addressing the governance issue. I think it should be one city of 414,000; I noticed yesterday that it had jumped to 422,000. Dispose of 120 politicians and allow us to speak with one voice on economic development, not 12. It's unbelievable that we have 12 economic development offices for a population of 414,000. I recognize that you're not the economic development committee and you're not municipal affairs, but my mother always told me that he who pays the piper calls the tune.

Lastly, one of Conrad Black's better hires is a young writer in St Catharines by the name of Doug Herod. The header in his column on municipal-regional government, November 19, 1998, says, "More Mischief in a Dysfunctional Family." And he got it right.

The Acting Chair: Thank you very much for your presentation. We have some time for questions, if you care to take them, from the three caucuses, starting with the government this time.

Mr Maves: I think Doug Herod is actually a favourite of Mr Bradley's.

Mr Bradley: Don't stick him with me.

Mr Maves: I'm sorry. I thought he was; I know Conrad Black is.

Mr Bradley: They all get told what they have to write.

Mr Kormos: Do you know Conrad Black?

Mr Maves: No. I never met him. We had an earlier presenter from the St Catharines Labour Council and we were talking about the industrial tax rate. This really shows how out of whack-I said at the time that ours were amongst the highest in the province. This chart shows that Niagara Falls, Welland and St Catharines, the three principal cities in our region, all have about a 9% industrial tax rate. The closest you get to that is about, what, 7.5% in Kitchener? Cambridge is 7.2% or something. Those municipalities are ripe and leaning right towards amalgamation themselves, so you would expect that rate to decline, probably below 7%. That leaves us 2.5 points above anyone else in Ontario.

I suggested at the time that that has a negative impact on an industry's decision to do business in this region, would discourage them from doing more business, and in some cases retaining current business, in this region. Do you think that's the case?

Mr Spraggon: I've always classed Mississauga-Oakville as being our competition. I have, for the most part, avoided industries sitting on Highway 401, figuring that's not exactly our competition. But even when we look at those municipalities, we're totally out of whack. If you look at property prices, industrial-commercial in Mississauga or Oakville, they're about the same as here, $3.25 or $3.50 a square foot to lease a place. Then you give them the whammy with the taxes. You do the add-ons, the TMI-the taxes, maintenance, insurance-and we're simply out of whack.

If you're talking about 2,500 square feet, it's not a big deal in the scheme of things. But if we're talking about a factory that's dear to a politician's heart-50,000 would sort of indicate it's a little bit labour-intensive-it's huge, absolutely huge.

Mr Maves: This also indicates that we're higher than every municipality on this chart in residential property taxes right now.

Mr Spraggon: That's right. Incidentally, I did not prepare those charts. Those charts were prepared by the region.

Mr Bradley: I agree with the challenge that we have to meet. I don't actually agree with the prescription, Ian, that you have for it. Unfortunately, we haven't heard on this matter from Dr Andrew Sancton, who is expert on the field of megacities and their effect. Dr Sancton states that there are no savings. He's done several studies. There are no savings, ultimately, with one big city, contrary to what some people continue to write.

Second, he pointed out that in places like Boston, New York, Los Angeles, Cleveland and Chicago, they have all kinds of municipalities within the municipality, so the argument that if you speak only as one big region somehow it's an advantage, he indicates clearly that that is an advantage which is far overestimated.

The obsession with too many politicians-I can think of what you'll have for the regional council. You may be happy with it; I wouldn't be. If you have a 16-member regional council, they'll all be rich candidates, because they'll have to be rich to run, or you will have party politics sitting there. If I were a lobbyist, I'd be delighted to be able to get at only 16 people. It won't be very representative of the community. I disagree with individual councillors from time to time, but at least they reflect the community.

I would suggest, Ian, that the real problem is the downloading of $18 million in additional net costs on the region by the province. That's why we see such a huge increase. I do agree with you that we have to address that, and the nine bills that have been passed in the Legislature dealing with it, each one correcting the last one, have not done so so far.

Mr Spraggon: If I could address that very briefly, I liked the quote the bank president gave: "The status quo is not an option." The huge tax rate is not new to us. It has been lying around there for years. The Kingston report-and then you go to the Chatham-Kent experience, which is not just a report-is interesting because they went ahead on the basis of that report.

My main thrust in everything is economic development or the lack of it. We are so parochial in this region, we absolutely kill ourselves. I asked the mayor, when he went over to Cologne on the world rowing thing, "How many people asked you on which bank of the St Lawrence St Catharines sat?" He said, "Nobody asked that specific question," but everybody asked him where it was. We kill ourselves in St Catharines because we're not Niagara. You need to geographically, in their heads, decide where they are.

We are so parochial. I had an example just a month ago where I got an inquiry for a 5,000-square-foot restaurant in downtown St Catharines from the city. That same inquiry went to Niagara Falls. But because I'm not in Niagara Falls, I don't get the inquiry despite the fact that I have a 5,000-square-foot restaurant in Niagara Falls. In terms of economic development, we would rather see that person drive up the highway to Mississauga than locate them elsewhere in the region. In other words, they don't believe that if somebody sells a washing machine in Port Colborne, I'll eventually make a dollar.

Mr Kormos: I appreciate your comments, quite frankly. They're very provocative. I think you know where I'm coming from a little bit on this megacity stuff. You've got Welland, St Catharines and Niagara Falls. I can't dispute that. I'd like to see Thorold, Pelham, Fort Erie. I don't know where they stand with respect to those other communities that are listed here, but it would be interesting to see where they stand with respect to St Catharines, Niagara Falls, Welland, because my impression, based on what people tell me, is that they have lower rates. Have you got that data there?

Mr Spraggon: Let me tell you. Residential, you're one point higher in Welland than you are in St Catharines, which means you're two points higher than Niagara Falls. You're 1.8442. Thorold, you're 1.684, which is about the same as Niagara Falls, which is 1.686. Go to industrial, almost the same. Thorold is 0.8. I don't have Welland there, but I'm sure Welland is up there too.

Mr Kormos: Those are some of the figures I'd like to look at. It's too bad, because the region wanted to come here today. I've got a letter from Debbie Zimmerman, the chair-

Mr Spraggon: They weren't allowed to?

Mr Kormos: It would be fascinating to put the points you raise to the chair and have some debate here. That's what this is all about. I've got a letter from the chair, Debbie Zimmerman, dated February 9, expressing her regret that, notwithstanding their efforts, the region cannot participate directly to express its concerns. In the letter she talks about some of her concerns about the 10-5-5 issue and about the overall tax issue and the fact that the region has shown some restraint, reduction in services among other things. It's unfortunate because I appreciate what you've had to say. At face value, I don't quarrel with it. How can I? That's the data. But it would be so nice to be able to engage the region in that debate.

Mr Maves: On a point of order, Mr Chair: I think you should perhaps explain to the committee how people get selected to appear.

The Acting Chair: Thank you very much, Mr Maves. I will. The subcommittee of this committee, which is a committee represented by members of all three parties, makes determinations as to how the committee is going to deal with presentations. You will know, Mr Kormos, that a member of your party is on that committee and was a part of that decision-making process. It's my understanding that the region made a request to present before this committee but that the request came in after the deadline. Certainly the region has an opportunity to present a written submission to this committee which will be considered in the context of all the other presentations.

Mr Kormos: On the point of order, the committee is scheduled to sit until 3:30, which means 4 o'clock, as the last presentation is at 3:30. However, the data I have show that the 2 pm presentation is cancelled. I wonder if staff could give Ms Zimmerman a call and invite her to come and fill in that little spot.

The Acting Chair: I'm not the permanent Chair of the committee and I feel it's not appropriate for me to make a ruling on that.

Mr Kormos: Where is the Chair? He's been away from here for a long enough time. Chair, please.

Interjections.

Mr Kormos: I understand. I'm getting older too.

The Chair: Sorry about missing the discussion, but apparently you raised the concern with regard to the region of Niagara not being able to make a presentation. The reason is that we made a decision as a subcommittee that they were not on time in asking to be a presenter in Niagara Falls. We've also had other requests from other groups whose applications were not on time. We decided that we would not make any exception for any groups. Consequently, we are sticking to-no pun intended-our guns here for the rule of consistency throughout the hearings throughout the province. The region of Niagara is not the only one that has requested. We had other groups. However, we refused the other ones and consequently will maintain our consistency.

Mr Kwinter: Mr Chairman, I should explain also. The 2 o'clock slot has been filled, but it was filled with a presenter who had presented on time but couldn't be accommodated. He had made his presentation on time; we just didn't have room. He was contacted to say, "There is a spot for you," and they will be presenting.

Mr Kormos: May I make a motion, please? I move that this committee sit an additional half hour and that the region be contacted to invite them, Ms Zimmerman or any other representative of the region, to be the final presentation today after the Taxpayers Coalition of Niagara.

I appreciate the explanation about the subcommittee, but this committee has the power to overrule the subcommittee. It can control its own process. So I so move.

The Chair: Mr Kormos, I will not entertain taking that motion on the floor. I have made a decision, and if you don't like my decision, you'll have to appeal it to the Speaker. My decision is not debatable.

We are now adjourned.

The committee recessed from 1206 to 1302.

TOGETHER IN EDUCATION

The Chair: Good afternoon, everyone. I'd like to bring the committee back to order. Our first presenter this afternoon is the Elementary Teachers' Federation of Ontario, Waterloo local. Would you please come forward and speak your name for the record.

Mr Brydon Elinesky: Actually, there are three of us here and we represent a group that is known as Together in Education, from Waterloo. The groups that we represent in our submission are the Elementary Teachers' Federation of Ontario, Waterloo local, the Ontario English Catholic Teachers' Association, Waterloo unit, the Ontario Secondary School Teachers' Federation, district 24, as well as AEFO, who are not present here this afternoon. The three of us-myself, John Ryrie and Pat Cannon-will be making individual presentations as we go through this.

The people we represent are 75,000 students and more than 4,000 teachers in the region of Waterloo, and educational workers as well. The following presentation indicates our belief that the education system lacks the resources to provide the quality of education Ontario students deserve and expect.

The current Ontario Teachers' Federation public education campaign indicates that the great expectations of students, parents and the general public, plus great teachers, along with the government support, equals great results. We are here to encourage the government to provide the necessary support to reach this lofty goal.

Mr John Ryrie: If we look back at least two years, the Ontario government at that time proclaimed it would provide stable funding; it was a primary goal. Funding was going to be stable in a couple of ways. First, boards would be receiving the same amount of money per pupil. They would continue to receive similar amounts per pupil for the foreseeable future, thus creating a stable and level playing field in all boards across the province. This stability, once reached through increases in funding to boards who had historically received less per student, such as the separate and rural boards, would allow all boards to provide the same level of opportunity and support to all students in Ontario. At least on paper, this was a noble ideal that promoted the equitable use of social resources.

The other idea reflected in the concept of stable funding was that students, schools, boards and parents would know henceforth that funding would not be subject to fluctuations of political whim or the uncertainty of local or regional economic growth and development, such as were talked about by previous people this morning.

Through equitable, centralized funding, schools would be stable in the delivery of their programs, their level of service and their staffs. On both counts the government is failing to deliver stable funding. On page 17 of our submission you will see a chart of the 1998-99 and 1999-2000 figures for 56 school boards, which was recently produced by the Ministry of Education. The chart clearly shows that reforms have not produced equal funding. In fact, the funding is tremendously unequal on a per pupil basis, and the differences are not cosmetic or trivial but represent a difference of millions of dollars to a public board such as our own, which educates 60,000 students. If we had $100 more per student, for example, we'd have $6 million more.

On the one hand, such differences are likely inevitable and reflect, to a degree, real differences in geography. This would certainly explain why many northern boards appear near the top of the chart. They have extraordinary transportation and heating costs before you even begin to count their other exceptional costs, such as communications and supplies as well as financial incentives to entice employees to work in remote environments.

On the other hand, only some of the discrepancies can be attributed to geography. Instead, the chart suggests these conclusions: (a) equalized funding, and equal student opportunity, to date is a social lie; (b) since June of 1995 the province has simply rearranged the haves and have-nots by replacing one form of inequity with another; (c) the gaps between boards are too large and pronounced to be closed by merely tweaking efficiencies, which was certainly the focus of the EIC as it went around the province fairly recently.

On January 13, the director of the Waterloo Region District School Board announced, via an interview reported in the Kitchener-Waterloo Record, that the board is looking at a $5.2-million shortfall for 2000-01. This figure has been repeated at public budget forums as recently as February 3. To cope, the board is looking at further cuts to school staff and school programs. Basically it is looking to reduce what it offers to students. Logically, however, if the Waterloo Region District School Board had truly stable funding, it would have enough money next year to fund all the classes and programs the board has this year, but it doesn't.

This is not a short-term problem or an aberration. This shortfall is a problem that comes on the heels of seven years of cuts. In 1992-93, Waterloo spent $6,700 per student. In 1999-2000 the same board is spending, by its own reckoning, $6,100. The board has more students than ever before, and yet its income in 1999-2000 is millions of dollars less than it was several years ago. In fact, throughout the 1990s the public board in Waterloo has lost teaching positions, library and guidance positions, secretarial positions, custodial positions, dozens of consultants, senior administrators, middle management, small schools-the list goes on and on. In the back of the document you have a list from 1996, which shows just the examples from one year of cuts.

The obvious question is: Where is the stable funding that has been promised? Unless the legislative grants increase in March, stable funding is just a political myth, a fantasy assuagement of the anxiety of parents, who want the best for their children and thought that provincial funding would deliver it and continue to deliver it.

What one sees in Waterloo and other boards is not stable funding but rigid and inadequate funding. One could also call it static funding or stagnant funding, or perhaps even strangulation funding. Simply put, the funding model fails to provide the support required to create a true educational stability.

First, the model ignores inflation, as someone also pointed out this morning. Yet if the Waterloo Region District School Board were receiving a modest 2% increase, the board would also be receiving an additional $7 million dollars, which would be well over the predicted shortfall. By not building in escalators, the funding model continues to reduce educational supports for students. When boards have no choice but to pay more for heat, light and supplies, something else has to be lost or reduced. Ironically, in refusing to add funding to compensate for inflation, the Ministry of Education constrains schools and boards in a way that neither the business community nor the government generally constrains itself.

Secondly, the funding model is blind to reasonable salary expectations. Nurses, auto workers, even Ontario government employees, have all received pay increases of 2% and up, some even retroactive to 1998 as the nurses recently got. But even though teacher salaries have been essentially frozen for seven years, since 1992, the ministry through its funding model continues to expect educators to fund any pay increases by losing positions and taking on an increased load such as a seventh secondary class. The funding model only haphazardly supports the long-standing structure of six of eight for secondary; for the most part, the funding formula presumes an average workload of 6.5 or 6.67, which is a destabilizing pressure. One need only review the last two years at a few boards such as Durham Public and Dufferin-Peel Catholic to see and understand the devastating effects of assigning additional classes to full-time high school teachers.

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When the ministry first developed the funding model, many critics said it was too simplistic, that no simple formula could possibly apply equally well to all areas of Ontario or even to two commensurably identical boards. Nevertheless the government claimed that equal funding would fix discrepancies and put everyone on an equal footing. This has not happened. The most painful consequence of all the rush and confusion and ministry abstract policies has been the reduction of educational standards in many boards of education including the Waterloo Region District School Board.

Fewer dollars has meant fewer supports for students, not better or enriched opportunities. In this sense the ministry, ironically, has not demonstrated the accountability it has demanded of everyone else, and the real goal has not been the improvement of education, as Bill 160's title promised, but the squeezing of the more extensive and sophisticated boards, such as Waterloo, into a plainer, barer and, without doubt, cheaper box.

What we would like the ministry to do is provide truly stable funding. Truly stable funding would recognize inflation. Truly stable funding would treat educational employees no worse than other employee groups in both the private and public sectors who have been receiving pay increases and improved working conditions for the last several years. Truly stable funding would recognize the real complexities of geography and school-building history, especially in large boards. Truly stable funding would map out the stable needs that are required to support students everywhere and then fund those needs, instead of imagining a mythical norm and then forcing boards to make ugly educational amputations to achieve the mythical ideal.

Finally, scapegoating boards, teachers and students during a period of unprecedented growth, development and success is a major contradiction. If school failure were so rampant and truly responsible for provincial uncompetitiveness in a global economy, our whole economy and social structure would be failing miserably. Instead, Ontario is leading the G7 nations and Canada. Most of the employees fuelling this growth were educated in a period of substantially higher support for students. Concomitantly, decades of rigid underfunding of California schools ruined that state's educational infrastructure. Years of underfunding of schools in Great Britain has also devastated their system. More money is certainly not the only answer to any deficiencies in our present system, but it is certainly part of the answer. Bill 160 itself accepted this idea in pushing so strongly for improved funding for separate and rural boards.

What we would like the ministry and current government to do is ensure adequate funding so that boards can stop making cuts that in the short and long terms simply reduce the viability of the job of teaching and in turn the opportunities offered to students.

Ms Pat Cannon: I'd like to deal with a couple of specific areas.

The early years: There is a great concern for the way funding is allocated for early year classes, being kindergarten and JK, in schools. Because the children are included in the 25:1 ratio for the aggregate count in a school, we end up with a couple of areas of concern.

First, it is extremely unreasonable to think that a class of 25 or more three- to six-year-old children is a manageable group. There are, however, many situations where this is the case in Waterloo region. To accommodate these numbers there are many blended or split JK-K classes, which would indeed have this age range in them. This becomes an issue from purely a safety aspect. One adult supervising that many little ones, let alone attempting to teach some academics, would have his or her hands full. Because funding is limited, an educational aide is not hired to assist until the average number of students in these classes for the separate board exceeds 23. For example, in a school where there are 52 JK-K students, one class is kept around 23 and the other would have 29 and receive an educational assistant to assist for that half day. This is the current practice, although it can hardly be considered an adequate resolution to the concern.

Research has shown us that smaller numbers of students in the younger grades has a positive effect on their ability to learn because of the increased amount of individual attention they receive from the teacher. Consequently, many elementary schools endeavour to reduce the number of students in early years classes, if they possibly can, by rearranging the numbers of children in the other classrooms. Accommodating lower numbers in JK and K classes has the detrimental effect of causing the rest of the classes in the school to be larger than the 25:1 legislated by the government. This puts added stress and additional workload on the teachers in the upper grades.

Second, the full-time equivalent per pupil amount of funding for JK and K students doesn't recognize and account for the double usage, and therefore high cost, of regular replacement of early years classroom equipment such as toys and games, outdoor play and gym equipment as well as the many learning activities and materials that are necessary for this age group, nor does it cover the cost of the large amount of consumable materials. Indeed, most early years teachers subsidize their students' classroom learning by purchasing many materials and activities with their own funds. This is often the only way the teachers can assure they will have the equipment or materials they need when they want them.

In a survey conducted by Environics for OECTA two years ago, they found that teachers spend an average of $400 a year on their classes. You can be assured that the early years teachers would be spending at the higher end, contributing to that average. Most teachers don't mind buying special things for their classrooms. We just should not be depending on their contributions as a subsidy to the current funding situation.

Burnout is another issue. How is funding affecting the burnout level of teachers? This is a more complex situation, but the relationship is definitely there. Every week, we as federation leaders are seeing and counselling more teachers who are finding it harder and harder to deal with the multitudinous curriculum changes that have been downloaded onto classroom teachers over the last year and a half. They are expected to implement all the changes in every area of the curriculum, based on new and more difficult expectations for each age level. They are expected to evaluate the children's progress using an entirely new assessment model. Then they have been required to report on the progress on new report cards using faulty and defective computer programs which frequently have caused teachers to lose an entire class set of reports when a spell check was done.

Because of these problems, we find ourselves in a major dilemma. The teachers continue to require a great deal of in-service just to begin to accomplish some of these expectations. Normally, in previous years, this would or could have taken place on professional development days that were scheduled for this purpose. We now have only four such days in an entire year. This is far too little time to manage the gargantuan task that is still ahead of us. We therefore must find some other way to deliver the necessary information.

Can it be provided through workshops during the day? This would seem reasonable at first glance, but there is too much information to be dispersed, causing too many teachers to be out of their classrooms too much of the time. To further complicate matters, there are often not enough occasional teachers available to cover classes for the teachers receiving professional development. As well, in many cases there is not enough money provided in the budget to pay for occasional teachers to cover classes for professional development to take place during the workday. Conversely, the classroom teacher would actually prefer to be with their own class, teaching their own students, during the day. PD opportunities should be available when they don't conflict with so much classroom time. It would seem reasonable to schedule more PD days.

More schools and boards are now scheduling PD opportunities after school. This may be the answer to the cost issue, but we now enter the teachers' own time, and how much of it is actually available with all the planning, organizing and marking that needs to be done. Teachers generally spend three to four hours of additional time beyond the six or seven hours at school. The added pressure this expectation brings increases stress in their lives to a very high degree.

Split grades are another problem, and one that is further exacerbated for teachers when they are responsible for having two grades within their classroom contingent. There is currently not enough funding to allow for greater flexibility in the arranging of classes to eliminate this split grade situation. Teachers who have split grades are now responsible and accountable for knowing, teaching, evaluating and reporting two full grades of curriculum. There is not time in one's day to fit in all that is necessary for a single grade, let alone two.

Teachers continue to take on more and more, and now many of them are starting to break under the pressure. Teachers with the Waterloo Catholic District School Board have one of the highest LTD experience ratings in the province. In the private sector there is a claims rate for LTD of about seven per thousand claims. In education the Ontario rate is about 16 claims per thousand for 1998-99. With the Waterloo Catholic District School Board the rate was almost 30 per thousand. In education as well, over 50% of the claims are stress-related. Inadequate funding is creating increased workload situations that are proving to be hazardous to teachers' health.

From the Catholic perspective, as previously outlined in this report, there are many similar concerns about the effectiveness and inadequacy of the funding model for the Catholic boards as well. While it is true that some Catholic boards are receiving more money than they did before, the previous amounts were much lower than what public boards received. Because of the long history of lower funding for Catholic schools in the province, many of our schools have been unable to maintain physical and educational equality with their public school counterparts, let alone improve these standards. Even today in Waterloo region there is a large discrepancy in the amount of money received per student by the Catholic versus the public board. In total it would make an over $3-million difference if we were funded at the same level as the public board.

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In Waterloo region, the Catholic schools have been without the services of teacher-librarians for the last six years. We have been unable to fund special qualified itinerant art and music teachers for over 10 years and, to my knowledge, we have never had drama, physical education or guidance teachers in the elementary schools even on an itinerant basis. Our base of resource people at the board level, such as consultants and special service teachers, has been steadily declining over the last 10 years. Consequently, associated programs have deteriorated or disappeared altogether.

We have had a reduction of department heads in our high schools from over 100 several years ago to a total of just 40 today. All these reductions in staff have a huge effect on individual teacher workload and program delivery, as many of the tasks have been downloaded on to their shoulders.

Ongoing costs continue to rise, and current funding does not meet the regular class expenses. With the recent wholesale changes to the curriculum, there are no longer sufficient textbooks and learning materials in classrooms to meet the needs of children in the schools. Texts for intermediate geography, history and science average $40 each. Most schools are unable to purchase enough texts for every student in every subject area. They often have to share texts by alternating days that students can take them home or through creative scheduling when there are several classes of one grade. This would allow all students to have some opportunity with a textbook; however, it hardly provides the quality education we have always delivered in the past.

It becomes increasingly apparent that the funding model is too restrictive to accommodate the local variations and needs of individual school boards. More flexibility to accommodate local and district needs is necessary.

Mr Elinesky: Another area we would like to address is special needs, in particular ESL and special education.

As pointed out in the recent EIC report, Waterloo, like many other school boards, is seriously underfunded, especially in the areas of special ed and ESL. Waterloo has one of the highest rates of settlement by recent immigrants to Canada and therefore the needs for ESL are even more immense.

There is also a significant number of students who come to our schools from non-English-speaking homes. The Mennonite population of Waterloo is a prime example. We have many students entering kindergarten and grade 1 who do not speak English and who are not eligible for ESL support because their families have been in Canada for many years. This compounds the problem of high numbers in our primary grades, as discussed earlier, as our teachers try to accommodate the special circumstances of these non-English-speaking students.

Special education funding for our neediest students is also dangerously low. Over many years, the board has developed special education programs to meet the needs of our students. The lack of funds in the current model has forced the board to cut programs drastically. As reported by school business officials across the province, the boards are spending $100 million more on special education than they receive. The Waterloo Region District School Board is no different as they spend nearly $2 million more than they are allocated by the funding model. This does not include transportation costs of an additional $3 million to transport those students to special classes.

The Waterloo Region District School Board has attempted to cope with the situation by overbudgeting for ESL and special education. As a result, serious cuts have been made in spending for administration, school operations, computers, textbooks and so on. Boards have come to the end of the line for cuts in these areas. As pointed out earlier, the board is now in the untenable situation of trying to maintain quality but with dwindling funds to provide programs. Our youngest, neediest students are at risk. Not to address their needs when they are entering the school system is to condemn them to failure, and the resultant cost to society will be huge.

As a result of having insufficient funds for vital programs and materials, the level of fundraising in our schools is at an all-time high. In years gone by, schools spent money on fundraising for perceived extras such as creative playgrounds. Now, students and school councils are on the streets for a different need. Let me quote from a recent newsletter sent home by a local school council: "Parents are fundraising more than ever just to cover the basics. Fundraising now goes to replace broken and outdated equipment and to purchase text books and wall maps."

In conclusion, there are many issues that we have pointed out in this document. It is our sincere hope that you will look at our recommendations as positive suggestions for improving the quality of education for our most important resource, our children. Teachers want to do the best job possible. They want our system to work well. But they can't do it alone; they need the tools, resources, both human and material, as well as an environment that will help encourage and develop a positive love of learning in our students. You can help by recognizing that some changes are necessary in the funding as well as expectations for the curriculum in order to foster this development in our province.

As a summary of recommendations, we would like to see that the funding formula takes into account inflationary pressures such as, but not limited to, heat, hydro and salary increases; that the funding formula adequately funds early education programs such as junior kindergarten; that there be a reduction in class sizes for all grades, particularly primary classes; that there be a cap on maximum class sizes at all grade levels; that the funding model be adequate to allow a reduction in the number of split classes; that there be adequately funded professional development opportunities for teachers during the regular workday; and that the special education, ESL and learning opportunities grants be increased to meet the needs of our students.

The Chair: Thank you very much. We have two minutes per caucus, and I'll start with the official opposition. Mr Bradley.

Mr Bradley: Thank you very much. You have painted an interesting picture of what is happening in the Waterloo area. I suspect that many areas in the province are experiencing the same thing.

I guess we have to look at the consequences of this for the students and for society as a whole. The funding model you have talked about does present a genuine problem. But I want to deal with one phenomenon that is happening at the present time, and that is the number of teachers who are retiring, not in the year they can retire, not in the month they can retire, but on the day they are eligible to retire.

It seems to me that you are losing an inordinate number of teachers who are, as you say, the mentors to others, who potentially provide that balance, because you need some good younger teachers and some teachers with experience who have been there for many years. To what do you attribute the fact that people are now getting out of the profession the day they can get out, as opposed to years gone by, when they taught for many years beyond when they would be eligible for retirement?

Ms Cannon: I think part of it is a true reflection of the burnout that teachers are feeling. As I mentioned in my section, the workload has increased for teachers. The expectations on teachers now to provide more and more services as well as fund some of these things themselves are far too great for people to consider, at that point in their careers, that they should still be doing work to that degree. There is certainly a sense of resentment at a government that does not listen to the needs that are being expressed to them on a regular basis. When you get that kind of response to suggestions, and none of it is taken into account, there is a sense of despair that a lot of these people feel, and no longer feel they have a commitment to a system that isn't listening.

The Chair: Thank you, Mr Bradley. Mr Kormos.

Mr Kormos: It's interesting that you came to Niagara to make your submission. I understand your complaint about the ranking of Waterloo region board, at 43. Take a look at Niagara. We rank 53rd. Holy cow.

I've been blessed, because at least once a month I get into an elementary or a high school. Over the course of years, because I have gone to the same classrooms with some of the same teachers, I have seen kids with special needs-and some of these needs are very dramatic, or very demanding. Let's put it that way. Teachers used to have aides helping them out, but these kids have been a charade, as we all know, to that classroom education. Your average of a $400 contribution per teacher-you pointed out that it's only the average. I know these teachers and have seen them taking stuff in at 8:30 in the morning. I think teachers are spending incredible amounts out of pocket. I suggest your figures are, dare I say, conservative.

I'm especially concerned about our kids with special needs, ranging from those more readily responded to, to the more-these kids are just getting swept aside. Teachers are paying a huge price, and the kids are paying an even higher price.

What's the response when you get MPPs into your classroom and you say, "Here, look for yourself. If you don't want to listen to this sort of submission, come into the classroom and look for yourself"? What's the response of MPPs when you do that?

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Mr Elinesky: It's interesting to note that we'll be inviting our MPPs. We have a meeting with them on February 25. We're inviting our local MPPs to come to class with us to see the situation.

The effect is twofold, actually, in having the students in the class. It's not only that those students aren't receiving the adequate teaching that they deserve to have for the special needs that they have, but also the effect it has on the teacher because then they are having to spend more time with that student in the class and therefore have not the time to spend with the other students. It's a Catch-22 between them. Both groups are then getting inadequate time.

Mr Kormos: One former MPP suggested that those kids with special needs have no business being in the classroom because they only detracted from-

Interjection: Name names.

Mr Kormos: Well, he's not an MPP any more.

The Chair: That's your time, Mr Kormos. To the government side, Mr Arnott.

Mr Arnott: Thank you very much for your presentation. I think you've done a very effective job of expressing your views. You would be surprised if I said I agreed with everything you had said, I think. But I do appreciate the fact that you've made the effort to come to the committee and I want to assure you that your views will be taken into consideration among all the presentations that have taken place over the course of these public hearings.

For my part, I want to say to Mr Kormos that I accept invitations to visit schools when I can and I would look forward to visiting a school in Waterloo region if I receive an invitation of that type. I know that Elizabeth Witmer has made time in her busy schedule recently to visit schools in her community, and obviously shares my viewpoint on that.

One statement you made that I want to ask you about is on page 6 of your presentation. "Bill 160 itself accepted this idea in pushing so strongly for improved funding for separate and rural boards." Technically, it wasn't Bill 160 that provided additional funding for some rural and Catholic boards, but it was Bill 160 that empowered the government to bring in the new funding formula, which in turn provided equalized funding, which meant that many Catholics boards, if not most Catholic boards, would have received an increase in their per pupil funding compared to what they had been able to afford before, as was the case in many of the rural boards across the province. Certainly in Wellington county, the area that I represented in the Legislature up until 1999, the public board received considerably more funding per pupil than was the case previous to Bill 160.

I was just wondering, did the Waterloo Catholic board receive an increase in per pupil funding as a result of the new funding formula?

Mr Elinesky: Yes, they have.

Ms Cannon: Indeed they have, but according to the list that John was referring to, Waterloo public is ranked as 55th and Waterloo Catholic is ranked at 67th, with a $144 difference. Unfortunately, that isn't on the page. We didn't have all the figures. We're way down here at the bottom.

So yes, indeed, we did receive some additional monies, but one might think, if we're talking equalized funding, that for a similar region both boards would have been receiving similar amounts of money per pupil. This makes almost a $3.5 million difference.

Mr Arnott: I look forward to discussing this further.

Ms Cannon: It will be brought up.

The Chair: On behalf of the committee, thank you very much for your presentation this afternoon.

ONTARIO CHIROPRACTIC ASSOCIATION

The Chair: Our next presenter this afternoon is the Ontario Chiropractic Association. Could you please step forward and state your name for the record.

Dr Bob Haig: Good afternoon. My name is Bob Haig. I'm a chiropractor practising in St Catharines and the director of government affairs of the Ontario Chiropractic Association. With me is Mr David Chapman-Smith, who is general counsel of the Ontario Chiropractic Association.

The Chair: On behalf of the committee, welcome. You have 30 minutes for your presentation.

Dr Haig: We appreciate the opportunity to present to you today.

The main message that you'll hear from us today is that adding more funding or tinkering around with the health care system is not really going to be enough to solve the big problems that are ahead of us, that are ahead of the government. Really, the government needs to do three things.

It needs to completely rethink how it funds services and why it funds health care services.

It needs to make restructuring decisions and funding decisions based on outcomes. I mean best evidence of patient outcomes, what works, and I mean best evidence of cost-effectiveness, what works, and what works in the most cost-effective manner, because we are all completely aware of the issues facing health care funding down the road from now.

The third thing the government needs to do, regardless of the historical silo funding that exists, regardless of what might happen with respect to federal funding for health care, regardless of what some people would call the antiquated provisions in the Canada Health Act, is to find some way to make the best possible use of non-physician practitioners if in fact the health care system is going to be restructured so that it works effectively for the people of Ontario down the road.

There's a brief before you. What we propose to do is not to go through the whole thing, but to go through the executive summary with you and then leave plenty of time for questions so that we can delve into specific areas of the brief that are of interest to you or other things beyond that.

I'll turn it over to David at this point.

Mr David Chapman-Smith: Good afternoon. Actually, to illustrate the second point Bob made, imagine the management of back pain. There would be many of you sitting there who would think the most cost-effective thing to do is to rest for a couple of days and take nothing because that doesn't involve going to health practitioners or, if you do go to a practitioner who says, "Go to bed for two days," that's much better than getting into drugs, getting into manipulation, getting into all sorts of other things.

It is now firmly established that the most expensive thing you can do in the management of back pain is to tell people to rest, because it promotes disability, both physical and psychological decline. There is a tremendous volume of evidence in the last 10 years and now clinical guidelines telling health practitioners: "Don't tell people to rest. Keep them moving. Keep them positive. There are certain things you can do like over-the-counter drugs and spinal manipulation that are good, but don't send them to bed." A lot of the common sense sort of things you might think about in the costing of health care are actually rather different at ground level.

The submission we've put before you is a little bit large and, as Bob has said, we're not going to go through the whole thing. Fundamentally, it covers two areas: first, health care policy, which is not your concern but is the background to our presentation today, and secondly, economic issues. What I have tried to do in preparing this submission is to, as you will see in the table of contents, give you relevant questions and areas, deal with them in a very succinct fashion and give you good references. So if you or policy people with you want to read about this afterwards, I suggest it does reward reading. It's good material. It's easy to get into.

You will see in the table of contents that there is a review of complementary and alternative medicine, which we see all around the world and which is here to stay. Two of the quotes I have in here are from the Journal of the American Medical Association and from the New England Journal of Medicine, both from leading physicians saying: "This isn't a fad. This is a complete restructuring of the health care system and it's here for good."

Basically, patients want both. They know they want good medical care for certain reasons, but for chronic and lifestyle disorders and various other things, they're shopping around for various complementary forms of care. They want both. They haven't decided for one or the other. I needn't say much more about that to Mr Kwinter, because I know about his background in this area and the pressure he put on the CPSO to come out with the recommendations they did in favour of the integration of complementary care just a couple of years ago.

Then I look at: What do Ontarians and others think of chiropractic services? There have been good surveys done in the province now. If that interests you, that's covered in detail there. Who uses chiropractic services? The basic answer is, everyone across the population, but the details are there. How strong is the evidence of effectiveness? How strong is the evidence of cost-effectiveness? What savings could be achieved? That is the only section that I'll come back to, because that's of relevance to you.

Turning now to the executive summary, the first two paragraphs are what I call the health care background, and then we get straight into money. Bob has made the first point, that it's not a question of just putting in more funding; we really are at a point of history where we have to look at quality and restructuring.

(2) The rise of complementary alternative care has been significant. As I say, we've given you quotes on that, and I don't go into that further.

(3) Quality control and cost savings: The government must focus not only on funding services but also on assessment of their quality. There is a compelling need for evidence-based care and funding for services which have proven effective, cost-effective and accepted. Health economists, and this is Professor Manga and his team from the University of Ottawa, predict-and we give their most conservative figures here; in their full report you'll see they predict three levels, hopeful, likely, and in any event, and these are the "in any event" figures-direct savings of at least $380 million year, and disability and other indirect savings of $1.25 billion, if barriers to access to chiropractic services are reduced so that the number of Ontarians using chiropractic services for musculoskeletal pain doubles from 10% to 20% annually.

There are in fact two factors-the other one mentioned elsewhere in the brief-that are relevant here. One is the volume of patients seeking that form of service for those problems, and the second is doing it early. At the moment, over 80% of chiropractic patients have had their problem for six months when they finally pay out of their pocket to find chiropractic services, and during that six months, of course, many things have happened. They've used the other health care system, they've had disability. If you can get them to an appropriate service quickly, the speed is also relevant there.

It may be that some of you who have been sitting around these tables for a number of years still feel there is an element of major conflict between medicine and chiropractic and that the Ministry of Health is a little bit chary of getting near chiropractic. In fact, at ground level things have changed, thank goodness, for patients tremendously in the last 20 years.

Paragraph 4 draws your attention to the Chiropractic Services Review Committee Report. That's the Wells report in 1994, named after Tom Wells, who chaired it. That was a bipartite committee of the Ministry of Health. Their representatives were led by Bob MacMillan, an ex-OMA president and general manager of OHIP at that time, and it had a number of senior ministry reps. There were four OCA representatives, including Bob and myself. I can assure you that when that report came out after three years, at every level of the ministry every word had been approved, because it was saying some new things.

You'll see three of the recommendations here: "That on the grounds of effectiveness, safety, patient satisfaction and public acceptance ... chiropractic services should continue to be accepted and funded by OHIP." I think a lot of people in the ministry to that time felt it was just political pressure, but on policy reasons it was felt that that's now well established.

Secondly, "That the citizens of Ontario should have improved and genuine freedom of choice...." To achieve that, a number of barriers to access had to be removed.

Finally, of relevance to you, "That the current level of copayments for chiropractic services, particularly in a ... system where other services have no copayment, represents an inequitable barrier to access which should be minimized."

In paragraph 5, the funding of services: The government's decision last year to reduce funding from $220 to $150 per person per annum and to maintain funding at its frankly silly level of $9.65-25 years ago, when chiropractic was brought into OHIP, the government funding was $5 a treatment; it's now at $9.65-is wrong in terms of cost. Substitution with chiropractic services will bring huge savings, but these services will not be used while patients are paying $20 a treatment to get there.

And here I pause, because it has always seemed to me, in the work I do for the profession, that to advance its interests the OCA and I have to look at the public interest and have to look at better integration and maturity in the profession and coming into the health care system. One of the amazing things we see now is the average physician wanting to refer patients but unable to do that with a lot because it's such a financial burden to the patient. I even know of physicians in Ontario who have as a spouse a chiropractor who won't refer to their spouse because the patient can't afford the care. So the integration which is so much needed in the system is really being prevented for this cost reason.

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The second bullet, policy: The Wells report has recommended that the services should be improved, but the user fee is now approximately $20 per visit. I've just mentioned that. The breakdown is there. Actually, the real cost is the first visit, where you're having X-rays and all of that. It's a big shot of money straight off, and then 20 bucks a visit after that.

And it's wrong in the public interest, we assert.

The OCA recommendations of a financial nature to this committee are:

At a minimum, funding should be restored for chiropractic services to the level in the 1970s, namely, 2% to 3% of the OHIP provider services budget. This would increase access by reducing the patient copayment from over $20 to less than $10 per visit. The copayment was $1 when in the 1970s chiropractic was brought into OHIP. The level of chiropractic during the early 1980s was between 2.5% and 3% of the OHIP provider services budget. Since then we've seen a huge growth in the profession, a huge acceptance of its services, many more patients coming, directly or on medical referral, yet it's a much smaller percentage of the provider services budget that is going to the profession. That, of course, is where the funding squeeze is.

Subsidiary points: the second one is restoring access to funded diagnostic imaging in hospitals. Everyone agrees this should be done, but it's been stuck in the ministry for a while.

Third, restoring access to funded lab services as necessary.

Fourth, making chiropractic services available in hospitals, primary care reform pilot sites etc.

The only other thing I'll direct your attention to before pausing for questions is the first of the three appendices. That is the executive summary of a report by the economists Manga and Angus. It could well be that you are assailed by many people arriving here who sit down and say, "Fund us; you will save money," that you are suspicious of the sort of figures being thrown around. How could you have such big savings through better use of a relatively small profession? Incidentally, there are about 2,200 chiropractors in Ontario today.

In the executive summary, page A2, paragraph 5, which, with your forbearance, I will take you through, there are some facts that might be surprising and will show why this is so.

(a) Approximately 95% of chiropractic practice is musculoskeletal or neuromusculoskeletal disorders: headache, neck pain, back pain etc.

(b) These disorders, which means things like arthritis and just idiopathic problems or injuries, are the second and third most costly categories of health problems in the economic burden of illness. Further than that, musculoskeletal disorders are the most important reason for activity limitations and short-term disability and are first in prevalence in chronic problems. So on every count, this is where the money is spent.

(c) Musculoskeletal disorders rank first as a reason for consultation with a health professional in Ontario and second as a reason for the use of prescription and non-prescription drugs.

I think (d) is significant. The poor and lower-middle-income groups and the elderly are low users of chiropractic because of the deterrent effect of high copayments, yet the prevalence of these conditions is highest in these groups.

Finally, (e), there is considerable empirical support for the cost-effectiveness and safety of chiropractic management of those conditions.

That is the essential underpinning of that argument. The full report, which is too long, and we haven't given it to you, can either be downloaded from the Web site, which is on the first page, or the association will be happy to provide a copy.

I hope I didn't bombard you with too much. We would welcome questions.

The Chair: Thank you very much. We have five minutes per caucus.

Mr Kormos: Why would the OCA maintain as its position the maintenance of user fees, having said what you say about chiropractic? And I don't dispute any of it.

Dr Haig: Perhaps we're caught up a little bit in the same game that the government is, and that is that it's easiest to tinker with what's there. Fundamentally what should happen is that chiropractic services should be included as a part of the health services provided by the government regardless of what form that takes, whether it's on a fee-for-service basis, the way a lot of health professional services are paid for now, or whether it's part of a CHC where chiropractors and physicians and everyone else are on a salaried basis, or whether it's part of the primary care reform. The fundamental point is that it should be there with everything else. I suppose it's just too much of a leap for us to think that the government would go that far.

Mr Kormos: If I accept your arguments in terms of it reducing overall cost and at the end of the day constituting a saving, and if I continue to believe, as I do, in my opposition to copayment-because you can reduce the user fee and that might mean that the deterrent it has will impact fewer people, but nonetheless it will still impact significant numbers of people. That was my concern.

Mr Chapman-Smith: Can I just make a brief comment? Important as it is to try and operate at a level of principle, we are surrounded by a real world also where, if the government here were to explore any other jurisdiction worldwide and any other payment system, there is some small user fee in there. So that's an additional reason for that.

When the second Manga report was prepared-the first one was prepared by the Ministry of Health, or for it, and funded by it, and we thank Frances Lankin and your party for the funding for that. That was an important report in 1993. The second one was commissioned by the OCA. At that stage what we put to Manga, and what in his report he put to the government, was full funding for seniors and those on social assistance and then a user fee under $10 for the rest.

Mr Kormos: I appreciate that the Wells report dates to 1994. I recall that government. It didn't last much longer than 1994. That government was also plagued by huge deficits because of the recession.

I just wanted to express that concern. If the argument is a user fee because people, in principle, should bear part of the cost, fair enough. I disagree with that, but that's an argument. The other argument is user fees to provide a control on people "abusing" the system. To that-and if you've got time I'd like you to reflect-I say no, regulate the profession. Just as if you have doctors abusing their access to OHIP payments, although it's very difficult now because of the caps, if you have chiropractors abusing it and giving unnecessary treatment, deal with them within their own regulatory regime. Is that a fair proposition?

Mr Chapman-Smith: Yes, it is. There are some interesting issues here that I could get into for the next half hour, but to cut right to it-and a lot of the members of the OCA would not be happy to hear me saying this right now, as many members of the OMA wouldn't be happy to hear their reps saying it-in reformed primary care I think we're going to see a lot of salaried services. That's going to solve so many problems in terms of utilization rates, how you deal with patients and everything else, and the ability to use different professionals without the user fee.

Mr Kormos: Interesting that you say that.

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Mr Maves: I've seen the members opposite today kind of nod their heads in agreement with people who have come and called for increased funding support for home care, new drugs, long-term care, arthritis, nurses' salaries, hospitals, child care, secondary schools, elementary schools, including ESL, junior kindergarten, teachers' salaries, bureaucrats, welfare recipients' increased funding, special ed, developmentally challenged adults, colleges, universities, debt reduction, social housing and capital spending.

By my count, if we do all that, we're back to about an $11.3-billion annual deficit. Thankfully, we've gone from that $11.3-billion annual deficit to a balanced budget, largely through trying to tighten some of our spending, and through some tax cuts, which have helped to spur the economy and have actually increased revenues to the province and helped us get closer to a balanced budget.

My question, actually, is almost brought out by Mr Kormos's comment. Among all these things, number one, where does the additional expenditure on chiropractic services rank or fit in? Number two, related to that, you say there are direct savings of $380 million. I've read it before. I've talked to a lot of chiropractors. Dr Taylor is very good at what he does. The savings from Manga and Wells I know about. On the same basis, does that $380 million kick in right away? Does that kick in the same year we bring in funding or is that a couple of years down the road? How does that all work?

Dr Haig: That kicks in immediately. This is why I started the whole presentation by saying that the government or the ministry needs to completely rethink how and why it's paying for things. The government is not going to save money if it pays more for chiropractic services but does not capture that savings anywhere. As long as the ministry only looks at funding in its little silos, that won't happen. It needs to take a bigger look. Just as if you replace some physician services with nurse practitioner services there are going to be immediate savings, if you replace some physician services and other health care services with chiropractic services there are going to be immediate savings.

Mr Maves: It has to be a replacement, not just an addition.

Dr Haig: It has to be an integration. You need to look from the top down and figure out how you get the best bang for the buck out of the pieces you've got on the table.

Mr Maves: To your credit and Dr Taylor's credit, you guys have been after this for quite some time and you've not been able to get the NDP government or our government to really move on this, despite the evidence. Why is that? Is that because of the silo mentality, the doctor-dominated mentality in the Ministry of Health? What is the rationale, in your view, because of that?

Dr Haig: It's not fair to say it's a doctor-dominated mentality. I use the term "systemic inertia." The Ministry of Health and the funding structures that exist are big and complicated and they've been there forever, and it is very difficult to change anything like that. I think we've all seen successive governments look and say, "We'd better see if we can do things differently and better." We're just supporting that concept. I'm completely convinced that if the government were to look at how we can make the best use of these services, they can find a way to do it.

Mr Maves: On that note, in your presentation on page 4 you say, "Making chiropractic services available in hospitals, primary care reform pilot sites, health service organizations...." Related to that, I would ask how your organization feels about the possibility of the province moving to rostering or group practices with doctors and maybe a nurse practitioner and a chiropractor and so on. How would your group feel if we moved with primary care reform in that direction?

Dr Haig: That's obviously a very broad question. I think David has already said that fundamentally it's a good idea to move to a more manageable form of delivering health care, one that removes some perverse incentives and puts in some better ones. It needs to be done in such a manner that you are using the best people for the job and making the most appropriate use of the people. The best examples are nurse practitioners, chiropractors and midwives. I'm not at all convinced that the process underway now is doing that.

Mr Kwinter: Thank you very much for your presentation. In your opening statement of your executive summary you say that the system doesn't necessarily just need funding, it needs "changing societal attitudes." I think that's the core of some of your problems. As you know, the medical profession 20 years ago openly denounced chiropractic and called chiropractors "quacks." This attitude has stuck.

Let me give you an example. I sit on the board of a hospital in my riding. The physiotherapist came to a board meeting to say, just as a point of information, that two of her physiotherapists would henceforth be providing acupuncture as a treatment. She didn't need approval-they're a self-governing body-it was just information. The chief of medicine said, "There is no way that acupuncture is going to be practised in my hospital." The board was caught sort of unawares and we said, "We'll report back at the next meeting," and at the next meeting it was approved. Mount Sinai Hospital now has an acupuncture facility.

I think it's going to take time; I don't have to tell you. It was announced that the chiropractic college was going to be located at York University and immediately there were all sorts of people coming forward and saying, "It is absurd that you would in fact diminish the reputation of York University by having a chiropractic college on its campus." I think that is one of the problems and it's really the crux of my bill, which is to say that there should be freedom of choice for the doctor and for the patient to have access to those treatments that can be shown to be of help. It may not be the conventional way, but it is probably as effective as some of the conventional treatments. Do you think that's a valid statement?

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Dr Haig: Yes, I do think it's a valid statement, but I need to say that we're not talking about services in a profession that is quasi. The things you've said are problematic for us. You're right, they're political. When you look at the evidence of effectiveness and you base your decisions on that, it makes no sense, for example, that there's an acupuncture clinic at Mount Sinai but not a chiropractic clinic, if you look at it from a rational point of view. I do agree with what you're saying, that patients should have access to services.

Mr Chapman-Smith: Can I just add a brief rider to that. The point that I would draw attention to-and this is a difficult thing; again, without spending time, but I'm sure this will ring true to you-is that there really are very few people against the chiropractic college going into York University. By a huge majority, I think 68 to 13, the senate approved it in principle, but as soon as it was done, the few remaining sword-rattlers in political medicine get to work and create all this fuss.

Let me give you one example that you will have read about in the press recently. You have probably read that there's a woman who's alleged to have died following a chiropractic neck manipulation. There's been a press conference, litigation, everything else. Dr Murray Katz from Montreal, who has fought the profession for 30 years with money out of the United States, got to the coroner's office-and I know this through speaking to coroners; and there's not going to be a coroner's inquest in this, which is what he was pushing for to get months of bad news-got the name of the family of this woman who died years ago two weeks after seeing a chiropractor, persuaded the family to file litigation and set up a news conference, all of this to help oppose the entrance of the college into York University, to give bad press. I speak to so many physicians who are irate about it all, but that's not what you read in the press.

This doesn't invalidate at all what you're saying because it's perceptions that count, but really-and I know a little bit about this having a wife who's both a medical doctor and a chiropractor-the level of acceptance now is extremely high, based on evidence and interdisciplinary guidelines. Throughout the world now there are well-established guidelines that for the average patient with back pain, spinal manipulation and early activity is as effective as anything and that you should be seeking skilled manipulation. So there are wonderful things happening, but still there are these closet problems and it will take about another 10 or 15 years to get the final ones out of the way.

The Chair: Gentlemen, on behalf of the committee, thank you very much for your presentation this afternoon.

TAXPAYERS' COALITION NIAGARA

The Chair: I've just been informed that the presenter for 3:30 is in the audience, so with the endorsement of the committee, we'll proceed with the presentation from the Taxpayers' Coalition Niagara. Would you please step forward and state your name for the record.

Mr Ian Fielding: My name is Ian Fielding.

The Chair: On behalf of the committee, welcome. You have 30 minutes for your presentation.

Mr Fielding: I really don't intend to read what we have written, but I'll paraphrase some of it.

The taxpayers are fully supportive of the present Ontario government and the many changes they have brought about to eventually attain a balanced budget.

One of the books I've read and listened to is by Roger Douglas. Three of his principles when he was turning around the New Zealand government-and he did do it-were, "No subsidies, no monopolies and no privileges," and he lived by those three principles, and they have worked.

The only problem we see now is that there is a possibility, because we are enjoying good times in the province, that we may go into a spending mode again. Then, if the economy changes, we'll be back to where we started. I would just like to say that we don't want to see this happen. I'm not saying no spending, but we don't want to go back to where we were. One of the subsidies I have mentioned here was actually offered to us. We find it disturbing that there is so much money out there that it can be offered to organizations like our own.

On the medical side of things, we really don't believe we can see OHIP being maintained in its present form. I don't think we can be all things to all people and just supply on demand whatever is required. As our technology grows, so does the cost of medical care within OHIP. We have a couple of examples here of abuses of the system by users. There are also abuses of the system by doctors, and one of them is here as well. It was a personal one that happened to my wife.

Further on, under budget controls, the one thing that amazes me and our group is that when the original health plan was put together the federal government, I've been told, was funding 50% of it and Ontario 50%. I know we probably can't do much with it now, but why is it that when the government sets up systems like this, we don't have a binding contract that once the proportions are agreed to, those proportions cannot be changed in order for the federal government to make room for new programs and free up finances and it is just downloaded onto the province? In a business you certainly wouldn't enter a contract that didn't have any binding agreement. I don't see why we as a province should enter those agreements either.

Going back to OHIP spending, because of certain extended health care clients and because of the shortage of doctors in this area, there are many examples of people who go to the emergency room or a walk-in clinic-but sometimes the emergency room is their first choice-to get a prescription so that they only have to pay the $2 drug fee rather than pay for something or wait for an appointment with a doctor.

On the education system, I'm very pleased to see the proposal that children have to attend their home school. I think we have to do a little bit more, because of the proposals that are now before us for funding for all groups. In the past it was only the public and separate systems, but I believe we are going to be faced with funding all the other groups' schools as well. So we're really going to have to come up with an innovative plan to save the taxpayer.

On downloading from the provincial government, one of the problems we found was that certain business people were claiming that the new tax loading was going to put them out of business. I know there were some inequities in the system, but we have to make sure, when we download to local authorities, that not only do we give them the tools but we make sure they use the tools so they don't put people out of business and therefore lessen the tax base again. We want to keep the tax base up so that everyone benefits from it.

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The Chair: Thanks for your presentation. That gives us about six minutes per caucus, and I'll start with the government side. Mr Maves.

Mr Maves: Welcome to the committee, Mr Fielding.

One of the topics you have touched on is the medical system. We have already had some presentations about how even though we're funding it from $17.4 billion to over $20 billion now, and it will continue to grow to at least $23 billion in a couple of years, most people will say it's not enough, and doctors and nurses and hospitals will want more money and so on. There are more and more people-and I think you indicate this-who don't seem to understand that when they access the health care system they don't access it properly. They don't understand that even though their doctor basically says it's free, in fact it's not free. It comes out of our pocketbooks.

Have you got any solutions on how we can deal with that and make people recognize that there is a cost?

Mr Fielding: I remember one time that I came out of hospital and I actually got an invoice, which was mistakenly sent to me, for the cost of the procedures I received in hospital. That certainly wakened me up to the actual costs. We have to put some management tool in place to make the public access the system properly, so we're not paying $500 for a visit to an emergency room-a figure that was stated for Scarborough General. It was in excess of $500 per visit.

I really don't know how you do it. There are various ways to do it, but finding the most equitable way to do it is certainly a difficult question. It's probably much easier to manage the doctors' side of it and to make sure they do not abuse the system. The fear of a lawsuit against them for malpractice is probably one factor that drives the massive amount of testing that goes on. I know that the popular way of managing it is to put a cost on it. I'm not really against that.

Mr Maves: You mean user fees, or something like that?

Mr Fielding: I'm not completely against it, because if a person really can't afford it, it can be refunded to them or it can be waived. I think there's got to be something put in place to just stop the misuse of the system-not for somebody who's using it and really needs it.

Mr Maves: I remember, back when I turned 18, having an $89 OHIP insurance bill for six months sent to me. I had spent lots of time in the hospital when I was a kid, so I thought this was a great deal, that I could get all that health care service for $89 for every six months. That's gone by the wayside and of course we can't do user fees in Ontario or any other province, with the Canada Health Act. I know in Sweden they had a problem like we have here, and many other countries with public health care systems have had a problem with misuse. Sweden, the home of socialization, the grandest socialization experiment anywhere, actually had user fees for a while and it did reduce their use of the health care system. Those are just options that I've heard discussed here and there, and I thought that was what you were getting at with some of your comments.

One of the things you touched on was the federal-provincial split, and you're right: Some time ago there was a 50-50 health care split between the province and the federal government. Over time that has declined, especially between 1993 and 1998, where it declined dramatically. It became about 8% that the federal government is funding health care and the provinces were funding the other 92%. In 1999 they put back a little bit. They haven't even got anywhere near 1995 levels yet, but they've put back a little bit and their percentage grew to about 11%. Subsequently, we added more money and their share has dropped down to more like 10%. Do you see that as a problem and do you think we should have some kind of contract binding the federal government and ourselves in that funding relationship?

Mr Fielding: Well yes, I think if you're going to enter into a contract, enter into an agreement of any sort, it's not advisable to enter into an agreement where you have no control and the other person has all the control. This, from the outside, seems to be what's happening. I would like to think that if my company is negotiating with our parent company or with another company, when we sit down and negotiate a contract, that contract is binding. So I would like to think that if our government is negotiating a contract with the feds, they would ask the federal minister to sign it in blood before they walk away. Because if you take it now that we're supporting it 89% and they're supporting it 11%-that $23 billion, the differential there, would be very attractive to the government of Ontario right now, to have that in their pocket, rather than not to have it.

The Chair: I'm sorry, we've run out of time. Mr Bradley.

Mr Bradley: Following on that line of questioning, would you agree, then, that any contract between the provincial government and the municipal government should follow the same principle?

Mr Fielding: Absolutely.

Mr Bradley: I'm glad to hear that it's a matter of principle on that.

Dealing with the problem of provincial debt, the taxpayers' coalition has been an advocate of elimination of debt, lowering of debt, dealing with the debt problem that we have, and has on many occasions stated how much, even probably to the minute, we pay in terms of servicing that debt. The provincial government of Mike Harris-and you extolled their virtues in here-has added at least $22 billion to the provincial debt, part of it by making a decision to invoke tax cuts before eliminating the deficit, something that I think my friend across the way Mr Arnott advocated against many years ago, advised the government that they should in fact deal with the debt before they invoked any tax cuts. Do you believe that it would have been wise to try to pay down that debt and save the tax cuts for when we reached a position where we had eliminated the debts in the province?

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Mr Fielding: I'm not an economist, and I think if you asked half a dozen economists the same question you'd get half a dozen different answers.

If you're going to make the economy in the province better by giving tax cuts-and most economists agree that tax cuts boost the economy-then you're going to have greater revenue to pay down the debt. There's merit in both arguments. As I say, I'm not the expert. I just pay the taxes; you're the guys who spend them.

Mr Bradley: The Dominion Bond Rating Service, a very small-c conservative organization that watches governments such as the Ontario government and has not placed it at a triple-A rating-I think the last time we had a triple-A rating was 1989-said the government was yielding close to $5 billion a year in potential revenue which could have been applied to debt reduction, in other words, bringing the deficit down at an earlier point in time. So this $22 billion or $24 billion worth of debt accumulated under the Harris government would perhaps have been $12 billion or something of that nature.

Wouldn't it have been preferable to reduce that debt and bring in the tax cuts later on, once the deficit had been dissolved?

Mr Fielding: Yes. I'm not saying I agree with everything the Harris government has done. But we certainly seem to be in a much better position today than we were in when they took over.

Mr Bradley: You mentioned New Zealand. I think we recognize that the people of New Zealand have turfed the government since the last election-haven't they?-and gone to a different government with a different point of view. But that's their decision to make.

You talked about emergency rooms. With the redirect crisis we have, where ambulances are told, "You can't show up at Greater Niagara General Hospital; you have to go to Welland County General Hospital," or something of that nature, that was not due to people going in needing a Band-Aid for a cut. That was due to a lack of beds available in the hospital. These were serious cases where they had to redirect because people were sitting in the hallways.

Would it not be desirable to try to deal with the problem of serious people sitting in the hallways by investing in the health care system, as opposed to eliminating funds from the health care system for that purpose?

Mr Fielding: From what I've been able to read in the newspapers-

Mr Bradley: I hope it's not the Standard.

Mr Fielding: -when the Bob Rae government was in, they closed the beds. I believe that Mike Harris didn't close any more beds; he closed the buildings.

Mr Bradley: And the beds with them.

Mr Fielding: But the number of beds overall was near enough maintained.

Mr Bradley: I don't think so.

The Acting Chair (Mr Ted Arnott): Thank you very much, Mr Bradley. In rotation now, the NDP caucus.

Mr Kormos: Thank you, Mr Fielding. I appreciate your coming by. You mentioned the government before the last government, the government of 1990. It's remarkable how much you have in common with the former leader of that party, the former Premier. He was a big fan of New Zealand as well.

Mr Fielding: It was a Labour government.

Mr Kormos: He was a big fan. He played that W-5 videotape to his caucus till we were all-you know how your grandkids know all the words to the Lion King because they've seen it? All the caucus were reciting the words along with the narration.

I just found it interesting-I don't think you and I would agree ideologically on very much. We might enjoy each other's company sitting down over a beer, but ideologically I suspect we're at opposite extremes. Were you as shocked as I was when the Harris government proposed the multi-million-dollar subsidy for those NHL hockey teams?

Mr Fielding: Millionaires. I was one of the first people to phone and complain about it.

Mr Kormos: I hope so. I darned near swallowed my bubble gum. So did most people in the province.

Honestly, do you think you speak for most people in, let's say, Niagara Falls?

Mr Fielding: I can't say I speak for most people, but I think I speak for a fair number of taxpayers in Niagara Falls.

Mr Kormos: I appreciate that you are very critical-this HRDC boondoggle over the last few weeks is not new. Various sources have reported these sorts of wacko things-

Mr Fielding: Oh, no, that's not the last few weeks. This was a long time ago.

Mr Kormos: But the revelations about it, or at least the focus on it. I agree. I mean, there's some wacko stuff that's come out of HRDC.

Although I wish it wasn't the case, all four ridings have elected Liberals-my riding, Niagara Centre, Niagara Falls, St Catharines, down in Erie-Lincoln. Notwithstanding everything that you say, Liberals have been elected handily in the federal elections, and none of those Liberals are closet right-wingers. They're all liberal Liberals and they've all backed their government, even though there are times over the last three weeks that I've learned of-but that's not the point; that's me.

Interjection.

Mr Kormos: I'm serious. So here you are saying the things you do and pointing out some stuff that, again, I can't quarrel with. Some of the HRDC stuff, along with stuff-I like criticizing every political party. Why should anyone be immune from my wrath? But why is it then that people in our communities, knowing all the things that you know, still elect Liberals handily and support the Liberal government in Ottawa?

Mr Fielding: Well, I think as long as we-and, by the way, I was probably a bigger labour person in the UK than you are. I was in the union business much more than probably you-

Mr Kormos: So was Samuel Gompers.

Mr Fielding: But to answer your question, we've got a system here where we've got Preston Manning on one side and we've got the old Tory party on the other side. As long as that is maintained, Jean Chrétien will be there for as long as he wants to be. There is no alternative.

Mr Kormos: Who's your money on, Tom Long or Stockwell Day? Come on. Let me in on it.

Mr Fielding: I don't know.

Mr Kormos: A lot of help you were today, Mr Fielding. Thank you.

The Chair: On behalf of the committee, thank you very much for your presentation this afternoon.

Interjections.

CANADIAN CO-OPERATIVE ASSOCIATION, ONTARIO REGION

The Chair: Our next group this afternoon is the Canadian Co-operative Association of Ontario. Could you please come forward and state your name for the record.

I have to try to drown the other discussion going on at the same time here. Once you get the floor, I'll make sure that we hear you clearly.

Ms Cathy Lang: Thank you. My name is Cathy Lang. I'm the region manager of the Canadian Co-operative Association, Ontario region. I bring with me today George Alkalay, who's the principal consultant for Northfield Ventures, a company that has worked quite a bit with farmers in Ontario setting up value-added production through co-operatives and, in particular, Farm Fresh Poultry Co-op, Newgeneregg Farmers Co-operative and the Progressive Pork Producers Co-operative. I also bring with me Ron Voortman from Brantford, a pork producer and a founding member of the Progressive Pork Producers Co-operative.

The Chair: On behalf of the committee, welcome. You have 30 minutes for your presentation this afternoon.

Ms Lang: We do have a written presentation which you can follow along with, and a little bit of background material on co-operatives and on the Canadian Co-operative Association.

We're appearing before your committee today on behalf of CCA Ontario to reaffirm the important role that co-ops play in the Ontario economy and in Ontario communities. We also wish to express our serious concern about the impact of proposed new fees and/or assessments to which co-ops will be subject under a draft funding proposal-that's outlined in Appendix 1, the part that relates to co-ops-released by the Financial Services Commission of Ontario in the fall of 1999. Our view is that the government should find ways of reducing the regulatory costs, a goal which CCA has been actively pursuing with staff of the Financial Services Commission over the past two years, rather than finding ways of recovering the costs of over-regulation.

We believe the government should take the opportunity in its upcoming budget to ensure that co-ops can continue to make their valuable contribution to Ontario.

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A little bit about the Canadian Co-operative Association. We're an association of co-ops in Ontario that provides a common voice for 1,500 co-operatives and credit unions in the province. Together, these co-ops and credit unions have more than two million members, hold assets in excess of $15 billion, and provide paid employment for nearly 10,000 Ontarians. Our members include Ontario's major co-operatives and co-op federations, including Gay Lea Foods Co-operative, GROWMARK Inc, the Co-operators Group, Ontario Natural Food Co-op, Credit Union Central of Ontario, and the Ontario region of the Co-operative Housing Federation of Canada. So we represent a very broad and diverse group of co-operatives and therefore their members.

The CCA is also appearing here before you today on behalf of many of the newer agricultural and rural co-operatives, as yet unaffiliated with our federation, who are concerned about the impact of FSCO's funding proposal upon their ability to raise funds from their member investors. These co-ops include many of the new generation value-added processing co-ops such as Newgeneregg Farmers Co-operative, Progressive Pork Producers Co-operative,, Seaway Valley Farmers Energy Co-operative, and Farm Fresh Poultry Co-operative.

I'm now going to pass the floor over to George Alkalay, who will read through the rest of the presentation.

Mr George Alkalay: I'd like to talk a bit about some of the background to Ontario co-ops and the legislative and regulatory environment that governs them.

Co-ops in Ontario are incorporated under the Co-operative Corporations Act and are governed by that act. As corporations, co-operatives are subject to many of the same regulatory and filing requirements as business corporations incorporated under the Ontario Business Corporations Act, and as not-for-profit corporations incorporated under part III of the Corporations Act.

The Financial Services Commission of Ontario, colloquially known as FSCO, is the body which is responsible for the incorporation and regulation of Ontario co-ops. As part of its recent restructuring, responsibility for the regulation of co-operatives has moved from the Ministry of Finance over to FSCO. FSCO is an arm's-length agency reporting to the Minister of Finance, and in Appendix II you'll see a description of its mandate.

Regulation of co-operatives represents only the smallest part of FSCO's regulatory jurisdiction. The regulatory jurisdiction includes pensions, insurance, loan and trust companies, credit unions and mortgage brokers. Co-ops are less than 1% in terms of the dollar value of FSCO's total budget and the services they provide.

In accordance with the mandate given to it by the government, FSCO is moving toward full cost recovery. In its current funding proposal, which applies to all the sectors within its jurisdiction, that funding proposal is guided by the principle of full cost recovery with no cross-subsidization of costs among the sectors it regulates. In other words, the principle is that pensions pay for pensions, mortgage brokers pay for mortgage brokers, and co-ops pay for co-op activity.

Compared to the costs associated with the other sectors it regulates, FSCO's costs associated with co-ops are truly negligible, amounting to approximately $532,000, according to FSCO's initial proposal and, following discussions with FSCO staff, apparently no more than $350,000 in costs. We understand that this is a very small piece of the overall fiscal responsibilities of the government. The precise costs of co-op regulation through FSCO have been difficult for staff to determine, in part because FSCO is still restructuring its internal operations. There has been a lot of restructuring over the last three or four years there.

I would like to set out some of the principles for cost recovery. From the outset, we want to make clear that we are not particularly seeking any special privileges for co-operative businesses or not-for-profit co-operatives. We believe that co-operatives can prove themselves as efficient, viable enterprises in a fair and free marketplace and that they do have a unique yet parallel role to play in relation to other forms of business and social enterprises.

However, in determining what fees to charge to co-operatives, it is essential to consider the marketplace impact of the proposed fees and assessments and how that impact relates to the stated public policy supporting economic growth and efficient public-private provision of services. Co-operative businesses and not-for-profit co-operatives function within the same environment as other businesses and not-for-profit corporations. Particularly in the case of co-operative businesses, differential regulatory costs could place co-operatives at an unfair competitive disadvantage to other types of business.

The CCA is not opposed to government recovering the costs of the services it provides to the co-operatives directly using those services. The CCA does, however, wish to suggest that the following principles should guide any such cost recovery.

First of all, recognize the important contribution that co-operative enterprises and not-for-profits make to Ontario's economy and social infrastructure: $15 billion, as Cathy mentioned a few moments ago. That's an important piece of the economy.

Ensure that co-operative businesses are not placed at a disadvantage to other forms of private enterprise, and that not-for-profit co-operatives are treated similarly to other forms of social enterprise.

Take into account the impact of excessive costs of co-op regulation vis-à-vis the public policy, which is that of supporting business and job development in Ontario. Excess costs of regulation have a direct impact upon jobs and business growth.

Ensure that the costs of regulation are commensurate with the significance of the regulatory objectives to be achieved. That's almost a paraphrase of the preamble of the Ontario Securities Act, which always talks about the fact that there are certain regulatory costs, but when you measure what those costs are, you want to balance them against the objectives being achieved. If there's a compelling reason for regulation, then it might justify a certain cost imposed upon the sector, but you want to make sure those regulatory objectives are compelling.

Distribute the costs of regulation in a fair and equitable fashion among co-operatives requiring the regulatory services of government, with consideration given to the regulatory costs incurred by other forms of business organization, and indeed of non-profit organizations. It's the issue really of a level playing field. We want to be treated the same as everybody else.

Let's compare fees. If you take a quick glance at the table down below, you'll see the extent to which FSCO's new funding proposal will place co-operatives at a competitive disadvantage relative to other businesses and not-for-profit corporations. For there to be such a differential in fees, there must be some rational basis in the type of regulatory activity required. Instead, based upon our discussions with FSCO staff to date, it appears the primary reason for the differences in fees is to be found in the lower volume of business handled by FSCO compared to either Consumer and Commercial Relations or the Ontario Securities Commission.

If I can just walk you through this table very quickly, in the first column you have the current fees that co-operatives are charged. The second column outlines the proposed FSCO fees. The third column outlines what the CCA is proposing as a reasonable balance. The fourth and fifth columns show what business corporations are charged and what not-for-profit corporations are charged.

For incorporation, co-ops currently pay $285 for a for-profit co-op compared to business corporations that pay $330. We're suggesting they should pay the same amount, so increase the fees by $45. I suspect there aren't too many people appearing before you asking for increased fees, but we think that is reasonable. FSCO is proposing a $1,000 fee for a service that's essentially the same as a business corporation gets.

The same issue with non-profits: Currently co-ops pay $135 versus other non-profits that pay $155. The FSCO proposal calls for an increase to $500.

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Offering statements: This is really one of the key areas, because it's one of the areas where there's the greatest degree of regulatory intervention, and the greatest costs are imposed upon co-ops. Currently, co-ops pay a nominal fee of $50. Under the FSCO proposal, co-ops would have to pay $1,500 plus 0.25% of the face amount of an offering statement. What that means is that a co-op seeking to raise $10 million would have to pay $26,500. It's important to note that the co-op going out there saying, "We want to raise $10 million," might raise $7 million. They're still paying the fee based on the face amount, the maximum of what they want to raise.

If you look at what business corporations pay, they pay an initial fee of $1,000 plus 0.04% of the amount actually raised. So a corporation going out to raise $10 million would pay $4,000, and then the initial fee of $1,000 would be deducted. They would be paying $3,000. For a co-op and a business corporation both going out to raise $10 million, the business would pay $3,000 and the co-op would pay $26,500 under this proposal.

Mr Bradley: That's not fair.

Mr Alkalay: That's why we're here.

That's an issue, particularly when you look at the fact that when business corporations are filing a prospectus with the Ontario Securities Commission, they are going out to the broad public. When co-ops file an offering statement they are for the most part going out to their members, who are intending to use the services of the co-op and who have inside knowledge about the business of that co-op.

There are a number of other fees that FSCO wants to go through. I won't go into detail. The one that is notable is that for filing financial statements they want to charge $250 on an annual basis. All co-ops that issue securities are required to file financial statements annually. We don't have a problem with that requirement. No other corporation has to pay to file their financial statements. Obviously, if you want an incentive to regulatory compliance, do it for free. If they want to charge a late penalty for not filing them, we're certainly open to that idea.

Finally, on top of everything, FSCO is suggesting that there be a base assessment or base regulatory charge of $750 a year on co-ops with assets of less than $5 million, and $1,500 a year on co-ops with assets of more than $5 million. Essentially what we're talking about is a capital tax.

What's the impact? We believe the proposed new fees and assessments will have a chilling effect on new co-operative development and will create unnecessary and unfair barriers to the growth of existing co-operatives. In addition, the burden of proposed fees unduly falls upon agricultural and rural co-operatives and has a particularly onerous effect on start-up co-operatives in which agricultural producers are seeking to add value to their commodities. Taken together, in the past year alone these new agricultural and rural co-operatives have filed offering statements with FSCO with an aggregate value in excess of $45 million. That is $45 million coming from farmers and being recycled back into rural communities.

Under the proposed fee structure, four of these co-operatives would have been required in aggregate to incur approximately $120,000 in fees for filing offering statements and an additional $8,000 in other fees and base regulation charges, representing nearly one quarter of the total annual budget of the co-operative section of FSCO.

The Ontario government's efforts to support the diversification of farmers' income through value-added strategies should be complemented by the regulatory policies and practices of its agencies. FSCO's draft funding proposal is inconsistent with the broader public policy objectives of supporting value-added agricultural co-operatives and will discourage the start-up and growth of new farmer-owned agricultural businesses in Ontario.

It goes without saying, and I'm sure all of you here fully appreciate the fact, that agricultural businesses typically operate in highly competitive environments, with narrow margins, and are often subject to the volatility in profits characteristic of the global commodity markets in which they are active. Regulatory fees, along with the expenses associated with complying with the progressively more stringent regulatory requirements imposed on co-operatives over the past five years, are likely to have a substantially greater impact on the agricultural sector than on the broader financial services sector, which is the client base for most of FSCO's activities.

In order to remain competitive in the marketplace, it is critical that agricultural co-operatives be adequately capitalized. Fees equivalent to 25 basis points on the amount offered by co-operatives, which may translate into 50 basis points or more on the amount actually raised, will act as an incentive to rely upon external debt financing rather than member equity. Instead of going to their members, co-ops might say, "Let's just go to the bank." An increase of 50 basis points in the cost of equity, when added to the costs associated with the preparation of offering statements, will make outside debt considerably more attractive, particularly to established co-operatives. This is not in the long-term interests of either the co-operatives themselves or their member investors.

The focus we would like to see the government taking is on regulatory streamlining and cost recovery. As stated previously, we understand that FSCO needs to recover the costs of its regulatory activities and we are working with staff to determine how best to accomplish this.

At the same time, we wish to continue to seek ways of reducing the overall costs of co-operative regulation. Much progress has been made by FSCO and the Canadian Co-operative Association over the past year in clarifying and streamlining the regulatory process for co-operatives. The efforts of FSCO in this regard are very much appreciated. By continuing to streamline the regulatory process, we believe that FSCO can achieve further cost savings and deliver an improved level of service to co-operatives. We must make sure that the level of regulation imposed on co-operatives does not in itself create costs that other forms of business and social enterprises do not have to bear.

The CCA believes that this regulatory streamlining should take place before instituting the proposed new fees, not afterwards. In order to ensure that FSCO's cost recovery process can start in the new fiscal year, we are proposing that new fees, equivalent to those to which other corporations are subject, be immediately levied on co-operatives. We also have some further, more specific suggestions for exploring alternative strategies for reducing the costs of co-operative regulation, and we indicate some of these below.

With respect to incorporation costs, we acknowledge that even after streamlining the regulatory process, FSCO's lower volume of incorporations simply may not permit it to obtain full cost recovery while enabling co-operatives to enjoy the same fees as other types of corporations.

If that proves to be the case, we would suggest that serious consideration be given to transferring responsibility for co-operative incorporation to the companies branch of the Ministry of Consumer and Commercial Relations, which may well enjoy substantial efficiencies due to the volume of incorporations they handle each year. This would also eliminate the unnecessary duplication involved in sending information on co-operative incorporations to MCCR.

With respect to offering statements, it's a bit harder to find a ready solution to the fees associated with the filing of offering statements, but here too we believe that there are some approaches which can make some sense.

Over the past five years co-operatives have been subject to increasingly stringent requirements for the disclosure provided to member investors. The CCA has worked closely with FSCO staff to ease some of the burden associated with these more stringent disclosure requirements.

It should be noted here that the regulatory regime governing offerings by co-operatives under the Co-operative Corporations Act has been generally acknowledged to be less stringent than that governing prospectuses filed by business corporations under the Securities Act. The less onerous regulatory requirements for co-operatives are justified by the generally non-speculative nature of co-operative securities, the limited scope of their distribution, the absence of established secondary markets and their comparatively lesser complexity. Put very simply, members invest in a co-op to get a service, to get their product marketed and to add value to their product. They're not doing it in order to speculate on publicly traded securities. If the farmers in Farm Fresh wanted to get the highest return for their money in the simplest way possible, they might have gone out and bought shares in Maple Leaf. They did not do that, and there was a reason for that. They see the co-op as an extension of their farm business, and I think the same is true of Progressive Pork Producers.

Accordingly, one would expect that the costs associated with filing offering statements would generally be less than those associated with filing prospectuses. However, in part because of the lower dollar value of most co-operative offerings, FSCO's funding proposal would actually institute fees that are more than six times higher than those faced by business corporations issuing securities.

If the costs incurred by FSCO in reviewing offering statements do not permit the adoption of a fee structure roughly similar to that which publicly traded corporations are subject to, we would recommend that various mechanisms be examined for reducing these costs.

Possible options, all of which would require further consultation with the co-operative sector, would include amending the Co-operative Corporations Act to expand the scope of the exemptions from offering statements and to simplify the requirements for co-operatives issuing securities only to their members. There are some quick legislative fixes that are possible.

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The CCA has proposed a series of such amendments to FSCO, to the Ministry of Finance and to the Red Tape Commission on a number of occasions over the past several years. We believe that such cost-saving amendments to the act could be accomplished through the government's budget bill.

Contract out the offering statement review process to the Ontario Securities Commission, which handles a much higher volume of prospectuses and may be able to achieve greater efficiencies in reviewing offering statements, particularly those which are of a more complex nature. The OSC's review would need to occur on the basis of the requirements under the co-op act, not the Securities Act because they are two very different acts.

Another option is to contract out the offering statement review process to one or more legal firms with expertise in securities and/or co-op law.

Finally, an option is delegating the offering statement review process to a self-regulatory body subject to the Minister of Finance.

With respect to fees for filing of financial statements, very quickly, no other corporation has to pay such fees. We don't think co-ops should be required to pay those fees. We think there should be a late payment fee but no more than that.

With regard to the base regulation charge and general assessment, FSCO has also proposed that either all co-ops or all co-ops offering securities to their members be required to pay a base regulation charge or assessment based on their assets. Again, no other type of corporation, either business or not-for-profit, is subject to an assessment of this nature. We see no reason why co-operatives should be singled out for such an assessment.

Conclusion: We wish to emphasize that however FSCO addresses the issue of cost recovery, it should be guided by the principle that the costs of regulation should not outweigh the objectives served by that regulation. While ensuring investor protection and creating a climate of investor confidence in co-operatives are goals we share with FSCO, we believe that goals could still be achieved through a more streamlined and less costly regulatory process.

The imposition of excessive regulatory costs on offering co-operatives will act as a barrier to the raising of capital by co-operatives, and send out a market signal to existing co-operatives to seek external debt financing over internal equity financing. In the long run, this will only weaken the financial stability of Ontario's for-profit co-operatives to the detriment of their member investors.

We also wish to reiterate our belief that regulatory costs should not be so high as to discourage the incorporation of co-operatives. Co-operative businesses make an important contribution to Ontario's economy, particularly in the agricultural sector and in rural areas of the province. I think Ted can probably attest to the benefits of co-ops of rural Ontario.

Higher incorporation costs will have the effect of deterring new businesses from choosing to organize in a co-operative form. They will also act as a deterrent to the many not-for-profit co-operatives active in Ontario's social economy.

We thank you for the opportunity to appear before you and welcome any questions. Ron, do you want to quickly-

Mr Ron Voortman: Quickly, my name's Ron Voortman. The reason I drove from Brantford to Niagara Falls is that it was a beautiful day and we need to be cost-competitive, plain and simple. Our co-operative started in 1993 as 11 people in a rented room with no money. In the year 2000, we expect to expend close to $40 million. We're going to renovate a plant in London, Ontario, that will turn an empty building into 200 jobs. Also, and our main reason for doing this, is to provide some price stability to our members, who control approximately 20% of Ontario's pork production.

As you're all aware, if you read the paper last fall, the pork industry went into a crisis of immense proportions. On my farm, our revenue to expenses went about 35%. The pork industry is experiencing a vertical market failure. Basically, there aren't enough buyers and far too many sellers.

Our group got together in 1993. Our common vision was not that clear. We understood that the pork industry needed to have some stimulus. We've gone through different scenarios. One was bringing another buyer into Ontario from 1995 to 1998.

Our goal at this time is to provide a value-added facility. Our intention is not to compete with the multinationals but to fill the market holes they leave, do value-added cutting and pass that value onto our producers.

Like I said, the simple reason for my taking time out of my day today is that we need to be cost-competitive; whether it's the cost of operating our facility or our regulation costs, it's as simple as that. We can talk for hours about the details, but we need to be cost-competitive with the Maple Leaf Foods and the Smithfields of the world. If our regulation costs are detrimental to us, it's like George says: it's a tax.

In building a business like ours, there are tremendous bumps and lumps on the road. We're not asking you to pave the road for us. Just don't make too many hurdles that we can't climb over. I guess that's the simple statement. I don't have a prepared speech; I'm speaking off the top of my head.

The Chair: It was pretty good. We have about a minute and a half per caucus. Mr Kwinter.

Mr Kwinter: Thank you for your presentation. I'm a little disappointed because when I started reading it-you may know I used to be the minister responsible for this area-I said, "I've got the perfect solution for you." But you've come up with the perfect solution, and that's why I'm a little disappointed. I was going to give you the answer.

I agree with you that those aspects that should be regulated by Consumer and Commercial Relations should be given to them. They have the economies of scale, the staff, the infrastructure and the computer software programming to do it. The same thing with your offerings: They should go to the Ontario Securities Commission, all on a contract basis with the new Financial Services Commission of Ontario.

It makes eminent sense, because the reason they have imposed what I think are exorbitant fees is that they have to set up a new sector with a new infrastructure to do it over a very small base, when the structure is already there. So I agree completely that that is the way to do it. What I don't understand is why people at the Ministry of Finance don't see that.

Have you made these representations to them?

Mr Alkalay: We have.

Mr Kwinter: And what is their response?

Mr Alkalay: Their response is that co-ops have always been there, and they don't really address the issue of turning it over to CCR. Their most recent response has been, "We would have to amend the act to do that." That's our suggestion.

Mr Bradley: I'm going to call Frank Sheehan right now.

Mr Kormos: It'll do you no more good now than it did six years ago.

First, I'm a fan of co-operatives. I knew Gay Lea Foods, and is it the pork co-operative?

Mr Voortman: Progressive Pork, in London, Ontario.

Mr Kormos: Progressive Pork. That makes me feel even better about it. No hesitation, it's-honest, it's Progressive Pork. All right. These guys will have a hard time buying Progressive Pork chops.

I appreciate that you are here today. I appreciate that you have got a history of lobbying for this issue. It's not complicated. First of all, you're right, it's not fair. And the solution is obvious. So my question is: What the heck is going on, guys? If this is one of those amendments that would have inevitable support from the opposition parties, we'd be idiots-and all of us have done a lot of stupid things, but none of us are exactly idiots-to oppose this sort of amendment being proposed. For Pete's sake-no, for your own sake.

My concern is that these committees are very fluffy. The press is no longer here. They're gone. They show up early in the morning. You have a parliamentary assistant here now, a very senior MPP who is highly regarded by the members of the opposition, and a new, young MPP who is very aggressive and very bright. I'm appealing to them to drive this issue home. I can't do it. If I stand up in question period, they'll say: "It's an arm's-length organization. "We've got no control over them. FSCO is at arm's length. We can't tell them what to do." That's their standard line. If we stand up and raise it in question period, we won't even make the Toronto Star. We'll make the agricultural newspapers, but that won't be persuasive. You've got to lean on these guys. Stick around till 3:30. Take them in the corridor. Shake them down. Grab them by the ankles, turn them upside down, shake every last nickel. I'm serious. This is your kick at the can.

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I'm telling you, and it's on record, that I'm confident that my caucus would support this type of amendment in a New York minute. I suspect that if the Liberals had another chance to address it, they'd say the same thing. What's the impediment here? It's a couple of pages of amendments. End of story.

The Chair: We'll end on that high note.

Mr Arnott: Unfortunately, I'm not in a position to commit the government to any specific course of action, but you have made a very compelling case and I'm sure that the Minister of Finance will be very interested in what you've had to say.

My only question was the same question that Mr Kwinter asked as to what kind of an answer you are getting from the staff-you indicated you're discussing this with the provincial government staff-as to why this can't be accomplished. Did you want to add anything to what was previously said?

Ms Lang: The response to that is that the Ministry of Finance has given the Financial Services Commission of Ontario the mandate to achieve full cost recovery. They are willing to go a little slower, but they have a particular amount in mind, $350,000 subsequent to the first proposal, that they are being told to recover. It's basically to cover costs of space, staff that are already in place and so on.

Our argument is, give us a year. We'll work it out with you. We'll make the legislative amendments we need to make. We'll streamline the regulatory work with you. We'll even explore the role of our own system in self-regulation, but we need and want that year to achieve a fair solution.

Mr Arnott: I would encourage you to continue that dialogue with ministry staff. We appreciate your presentation.

CANADIAN TRANSIT CO

The Chair: Our next and last presenter this afternoon is the representative from the Canadian Transit Co. On behalf of the committee, welcome. You have 30 minutes. Would you please step forward and state your name for the record.

Mr Remo Mancini: Good afternoon, members of the committee. My name is Remo Mancini and I am here representing the Canadian Transit Co, which is the owner and operator of the Canadian half of the Ambassador Bridge crossing between Windsor and Detroit. The CTC is a Canadian company with corporate headquarters in Toronto and operational headquarters in Windsor.

Naturally, we are interested in the direction of the province's economy. We have noted that over the past number of years the current government has decreased personal income taxes by more than 30%, reduced the annual deficit to its current balance of around $1 billion per year, assisted in the creation of over 600,000 new jobs, and helped more than 450,000 people escape welfare dependency.

Mr Bradley: You have Bart's notes.

Mr Mancini: Well, we footnoted all of these-

Mr Maves: I have higher, better numbers.

The Chair: Let's keep our agenda.

Mr Mancini: Thank you, Mr Chairman.

Today I would like to speak to you about opportunities for continuing this pace of economic improvement. First, let me begin by telling you a bit about the Canadian Transit Co and myself. The Canadian Transit Co was established in 1921 for the purpose of developing a direct connection between Windsor and Detroit. The Ambassador Bridge was completed in 1929, and its operations have continued to improve and expand.

Since 1991, we have invested over C$48 million, after-tax dollars, in infrastructure improvements on the Canadian side of the bridge. Among others, these improvements have included:

Construction of a new Canadian plaza and administrative building at a cost of more than $10 million, creating the largest and most efficient plaza at any border crossing in North America.

Recent land acquisitions have approximated $8 million to permit further expansion of the Canadian plaza, and $4 million to $5 million of further acquisition is planned and pending.

Development of a one-of-a-kind off-site facility for commercial traffic inspection in a 50-acre industrial park, at a cost of $7 million. With this facility we are able to handle large volumes of commercial traffic in an extremely efficient manner, freeing up capacity for passenger traffic and ensuring that vehicles are not left idling in residential areas.

Construction of a $5-million award-winning duty-free store, in a joint initiative with the University of Windsor.

Repainting the entire bridge. The cost of repainting the Canadian half is approximately $15 million. This project began four years ago and will be completed in approximately 18 months.

Reconstructing our Wyandotte Street entrance, at a cost of more than $1 million.

Repaving the Canadian portion of the Ambassador Bridge span-$750,000.

Upgrading lighting on the Canadian plaza at more than $500,000.

Similar investments have been made or are being made on the US side of the bridge. The Canadian and US companies are fully integrated, ensuring that the Ambassador Bridge is run as a world-class business.

Since the early 1990s, the Ambassador Bridge has been North America's pre-eminent international border crossing. In 1998, more than 25% of all of Canada's commercial imports and exports have traversed the Ambassador Bridge. To put that in better perspective, our imports and exports between Canada and the United States, commercial products only, are approximately $460 billion to $470 billion. Fully 25% use the Ambassador Bridge corridor.

For the past six years, I have served as the CTC's corporate vice-president. Prior to joining the company, I spent 18 delightful years as a member of the Ontario provincial Legislature, getting to know some of you. In my time as a public office holder, I held a number of different positions, including committee chairmanships, official opposition House leader and two cabinet posts. I believe that my experience as a public office holder helps me appreciate the difficult job that you have to do. However, today I am speaking to you not as a former elected official but as a business person interested in the continued development and expansion of Ontario's economy, and as someone who, like you, wants to see all of Ontario's residents benefit from this expansion.

I recognize that you have many significant and challenging issues to address. Ontario and Canada as a whole are faced with a pressing need to revitalize both our health care and educational systems. Further, the continued restructuring of the justice system and the social safety net to ensure that Ontario's social needs are met in an efficient and effective manner is a difficult but important undertaking. How we achieve these objectives is a matter of political debate, and people in this room have differing views on that matter. This is as it should be. The committee will be hearing from people much more qualified than I on these issues. Balancing these issues while restoring fiscal responsibility is a very difficult job, but it's a job that has to be done.

But we also need to ensure that the province's economic underpinnings stay strong. Premier Harris highlighted this point in his speech at the Cultural Business and Professionals Association's luncheon this month, when he said that, "We must never take our prosperity for granted." In our view, trade is the foundation of Ontario's economic prosperity. It helps grow our economy and therefore funds all important social and infrastructure improvements.

The strong US economy, Ontario's own productivity gains and multilateral trade liberalization, starting with the 1965 Auto Pact, have all led to exports becoming increasingly more important to Ontario's economy. Exports are now responsible for more than 52% of all the wealth created in this province, compared to just 29% 10 years ago.

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In 1998, approximately $155 billion worth of commercial goods were exported through Ontario's major land border crossings. That includes Sault Ste Marie, the Windsor tunnel and the three big crossings that I will mention later. But over $59 billion of these exports traversed the Ambassador Bridge. As you know, Ontario's exports tend to come from manufacturing companies. Every $100 million of these manufacturing exports supports the creation or maintenance of roughly 1,000 good jobs in Ontario.

This increasing focus on North American trade has led to a rethinking of Ontario's economic role. Thomas Courchene, a noted Canadian economist, has written a number of documents discussing the evolution of Ontario's economy. He has noted that Ontario has evolved from being the focal point of east-west trade within Canada to the key region in north-south trade. Among these documents is the book From Heartland to North American Region State: The Social, Fiscal and Federal Evolution of Ontario.

In this and other documents, he has noted, "Canada is progressively less and less a single national economy and more and more a series of regional cross-border economies," and that Ontario has evolved from a "Canadian heartland to a North American region state." In support of this evolution, he compares Ontario's exports to the rest of the world with exports to the rest of Canada. As the following graph shows, Ontario's exports to the rest of the world are now almost three times its exports to the rest of Canada.

Dr Courchene attributes this shift in part to the fact that Ontario's economy is particularly tied through both industry structure and trade to the North American economy as a whole. He also discusses geography as an important factor in this evolution. In one paper he notes, "Within one day's trucking distance of Toronto, the disposable income exceeds US$2 trillion, with the potential retail sales base exceeding US$1 trillion-a one day's trucking market comparable to that of Boston, Detroit or New York." Further, he says, "Ontario's economic future lies in middle America," citing that the "US portion of Toronto's one day's trucking market is 17 times larger than the Canadian portion." Obviously you don't need to be a mathematician to know what those numbers mean.

Many recent activities by Canadian companies demonstrate the growing importance of this cross-border trade to our economy. In recognition of the continuous and significant increases in Canada-US trade flows, Canadian National railway recently acquired the US-based Illinois Central railway and more recently has proposed to merge with the US-based Burlington Northern Santa Fe railway. Canadian firms that have recently acquired US companies include Nortel, Magna and Corel, further supporting the importance of north-south integration.

This cross-border trade is reliant on multiple modes of transportation and transportation infrastructure. By far the most significant of these is trucking and road infrastructure. This makes effective roadways and efficient border crossings more important than ever.

However, the growing infrastructure deficit could hinder this trade and impair Ontario's ability to be the economic engine of Canada. We cannot risk the potential job losses that would result from this. As governments have been moving to bring revenues and expenditures in line, there has been a reduction in transportation infrastructure spending as a percentage of total revenues. The following graph shows the extent of this trend as it relates to Ontario. As the graph shows, it has been significant.

In response to this need, the province has established the SuperBuild fund. Through this vehicle, the province is committing C$10 billion in infrastructure funding, to be matched by investments from partners such as the private sector and/or other governments.

In a speech last month, David Lindsay, president and CEO of the SuperBuild Corp, discussed the need to invest in transportation infrastructure. He quoted from the 1999 report by the Ontario Jobs and Investment Board, an organization that he had previously chaired. The report identified three key infrastructure challenges for the province. Two of these are of particular relevance today; namely an infrastructure investment deficit and the need to develop gateway and trade infrastructure.

In his discussion of the infrastructure investment deficit, Mr Lindsay noted: "The size of Ontario's economy has expanded fivefold since 1955. The total public infrastructure stock, however, has grown only by a magnitude of four." Further, the report says: "This gap is unsustainable because capital investment and economic growth go hand in hand. Investments in strategic public infrastructure are essential to keep Ontario's economy growing and competitive."

Regarding gateway infrastructure, or the infrastructure that facilitates cross-border travel and goods movement, the report says that, "International airports, border crossings and strategic highways ... are critical to Ontario's success in the global marketplace," and that, "Ontario is one of the world's major trading jurisdictions and quality infrastructure is the platform we need to grow and sustain our export-oriented economy." Further, Mr Lindsay acknowledged that, "The conventional approach to capital investment needs to change to reflect the new economy and the new realities of the 21st century."

The need to address this infrastructure deficit was echoed in a 1999 report from the House of Commons finance committee headed by Maurizio Bevilacqua, a Liberal MP from Vaughan-King-Aurora. The report called for $2.5 billion in federal money to be spent over a five-year period to improve highways, transit systems and water and sewer systems. Further, the report addressed the need to "develop new infrastructure for the new economy." This belief was also expressed by federal Transport Minister David Collenette when he said, "Canada cannot continue to live off of the transportation investments of the past."

A recent report by the federal Interdepartmental Working Group on Trade Corridors further demonstrates this need and specifically addresses issues related to border crossings. In developing its report, the working group consulted with stakeholders, including the Canadian Transit Co. With respect to border crossings, it found that one of the key issues cited was "congestion and delays due to infrastructure constraints and commercial traffic flow constraints."

The route for commercial traffic to cross the border at Windsor is a prime example of infrastructure deficit. The Ambassador Bridge crossing, which itself is only at about 55% capacity, is one of three major commercial border crossings between Ontario and the US and, as the chart shows, currently facilitates the movement of goods equal to the other two major border crossings combined. Despite its pre-eminent role, the Windsor-Detroit crossing at the Ambassador Bridge is the only major commercial international link in Ontario without direct access to a 400 series highway. Highway 401, the busiest road in the country, stops nine kilometres from this major international crossing. Truckers must go from Highway 401 to Highway 3 and then over Huron Church Road, travelling through much of west Windsor, to access the bridge on the Canadian side. As David Bradley, president of the Ontario Trucking Association and CEO of the Canadian Trucking Alliance, has noted, "You can take a truck from Toronto to Miami and of the 15 stop lights, 14 of them are in Windsor."

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The 1998 Southwestern Ontario Frontier International Gateway Study published by the MTO stated that by 2011, annual vehicle crossings between Windsor and Detroit are expected to grow by 50% and that Huron Church Road will not be able to handle these volumes. It also said that traffic forecasts show that congestion problems will arise along critical segments of the road prior to 2011.

The city of Windsor has stated that it pays roughly $400,000 per year in maintenance for the upkeep of Huron Church Road, as well as 25% of any of the capital costs for this connecting link. The road has long since ceased to be a city street and now functions primarily as a trade and transportation corridor serving Windsor, the province of Ontario, and Canada. The other border cities that compete with Windsor, namely Sarnia and Fort Erie, are not subjected to these costs. Windsor has justifiably objected to the continuation of this discriminatory policy. It is not a question of supporting either Sarnia or Fort Erie or Windsor. All of these transportation corridors are needed and all deserve appropriate infrastructure investment. The corridor linking Windsor and Detroit is too important to be dealt with in a fragmented way. In order to create a level playing field, the route between the 401 and the Canadian Plaza of the Ambassador Bridge needs to be treated in the same fashion as the routes leading to the Peace Bridge and the Blue Water Bridge.

This goes double for the users of that corridor. The users of that corridor deserve to have an appropriate route. The job creation which the users are trying to increase counts on that. Any increased cost due to unnecessary congestion or unrequired stopping of big tractor-trailers adds cost to Canadian product and adds no value to the product whatsoever.

This will maximize current infrastructure. The federal and provincial governments should take responsibility for this key element of Canada's trade infrastructure. Action is needed now.

Further, I support the Canadian Automobile Association's recommendation that the portion of Highway 401 running west from London be expanded to at least six lanes. The CAA presented this recommendation to the Honourable David Turnbull, Minister of Transportation, in their August 1999 report entitled Recommendations from CAA Ontario for Improving Safety.

The United States has been putting significant resources into their transportation infrastructure and, in particular, into their border crossings and connections with Canada. The US government's transportation infrastructure bill, the 1998 Transportation Equity Act for the 21st Century, TEA-21, authorized up to US$218 billion in spending for highway and transit programs over a six-year period. This includes a provision for up to US$140 million in annual spending to fund national corridor planning and development and border infrastructure. Only this week when I was in Washington, I found out that this $140-million annual expenditure has now been doubled.

In 1999, the Federal Highway Administration allocated US$10.6 million to the state of Michigan to cover the costs of engineering for improvements to the gateway on the US side of the Ambassador Bridge. This is part of an approved US$124-million plan to improve the roadway connections to and from the Ambassador Bridge on the US side and to reconstruct parts of the interstate freeway system that lead to the Ambassador Bridge.

The American decision-makers have created a plan, have funded a plan, and are implementing a plan to ensure that no bottlenecks occur on the American side of the Ambassador Bridge. This plan takes into consideration a second span planned by the Ambassador Bridge companies. A similar gateway plan on the Canadian side of the Ambassador Bridge is absolutely necessary.

In keeping with the province's move toward joint public and private investments in infrastructure, we are eager to work with you and make investments in our own facilities to ensure the long-term viability of this critical trade corridor. We are planning to invest up to $300 million, when warranted, to improve this gateway by making investments such as expanding capacity at the current bridge and/or building a second bridge when necessary.

I'd like to take a moment to summarize the main points of this presentation.

(1) Ontario is increasingly an export economy and its number one trading partner is the United States. I remember Mr Kwinter making many speeches citing that fact a number of years ago, and it's true today more than it has ever been true.

(2) Ontario in general, and the Windsor-Detroit route in particular, has a transportation infrastructure deficit that must be remedied.

(3) Ontario's economic well-being is dependent on good transportation infrastructure, and the corridor leading to the Ambassador Bridge is a critical component of this infrastructure.

(4) Ensuring that Ontario's border crossings and transportation corridors can meet our economy's needs is a wealth- and job-creating investment.

(5) Windsor should not be treated differently than Sarnia or Fort Erie. All three are needed to meet the future demands of growing trade.

(6) The federal and provincial governments must devise a Canadian gateway plan for the roadway system leading to the Ambassador Bridge. This has already been done in the United States.

(7) The Ambassador Bridge companies are prepared to work with you and to invest, when needed, up to $300 million in after-tax dollars to improve our own facilities.

Ladies and gentlemen, members of the committee, thank you for being so patient and for listening. I'm prepared to answer questions if time permits.

The Chair: Thank you very much. Committee members, just to show my fairness, I'll give each caucus two minutes for questions.

Mr Kormos: Remo, you know you're the last presenter.

Mr Mancini: I'm happy to have made the trip and to have joined you and to see some old colleagues again.

Mr Kormos: I certainly don't dispute anything you've got to say. I've been down there and at that bridge a good chunk of times on that stretch of highway from London to Windsor, which Mr Turnbull describes as "a very pleasant ride."

In the broader context, what's the level of lobbying and government planning with respect to the proposals you're making in this submission? What's happening in the broader context? What's the status of things?

Mr Mancini: As far as lobbying is concerned, we haven't really got into high gear. I consider this to be probably the key piece of lobbying, if I could say so. I've had one brief meeting with David Lindsay to find out more about how the SuperBuild fund would work and how that would relate to our private sector investments.

I'm going to be requesting a meeting with appropriate government officials in the near future, because we are developing an 80-year master plan to show the capacity of the Ambassador Bridge today, which is at about 55%, and the improvements we're going to make in the very near future to the Ambassador Bridge, which will increase that capacity substantially. We've hired what I consider some of the best engineers in Ontario to help us develop a strategic proposal with regard to Huron Church Road, which we hope to show to many departments of government, including members of the Legislature in all parties, to show everyone that with good engineering we can develop a very sound 80-year plan which will respect the city of Windsor's needs, environmental concerns, safety needs, and of course how we'll be able to help the export community.

All of that is in the works. We have several groups of engineers and experts working, and hopefully in the near future I plan to travel to Montreal to meet with the Centre for Transportation, which is a non-profit associated with the University of Quebec in Montreal. I understand from my preliminary findings that they have some of the best transportation experts in Canada, if not the world, there. I've made some preliminary inquiries and I hope to gather as much professional expert advice as I possibly can to do what you've just asked me to do.

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Mr Kormos: What about the Windsor-to-Montreal corridor? Is that anything you're including in any consideration?

Mr Mancini: Not for our proposal, no.

Mr Maves: Thank you very much, Mr Mancini, for coming a great distance to make a very good presentation.

On this stretch of Huron Church Road, is it a bunch of commercial properties on either side of the road at this point in time?

Mr Mancini: Part of it is. You have Highway 401, which stops, then you have Highway 3, which is a provincial highway, and that looks like it's the easiest part to improve. Then the city arterial road commences, Huron Church Road. They flow, one into the other. There is an extensive amount of commercial strip development and a number of traffic lights. All of these traffic lights are needed because we need to move east-west city traffic.

I believe we can come up with a plan that will look after the city of Windsor's needs and look after the export community's needs also. I think that's doable.

Mr Maves: How quickly will your second bridge become necessary?

Mr Mancini: We're at 55% capacity now. We've accumulated almost enough property to expand the Canadian plaza, which will extend the capacity of the bridge, and we've just improved our off-site facility, which is a one-of-a-kind facility in North America. We've just doubled the size of it, so that's going to help. Just to give you a rough guess, without all of you holding me to it, 2012 to 2020.

We haven't even used the new technology which I believe is just around the corner. I work with Canada Customs, US Customs and a number of other organizations interested in bringing technology to the border. We spend far too much time inspecting people and goods that don't need to be inspected. We have very few resources at the border and we should be using those resources in a highly targeted fashion so we can get the most out of our money.

Mr Kwinter: Remo, thanks for an excellent presentation. There was some really useful information in here.

To me, this is a no-brainer. One of my criticisms of the SuperBuild fund is that you've got to get a private sector partner and you're not going to get a private sector partner unless there is some kind of income stream that's going to make it profitable for them to get involved.

Mr Mancini: That's correct.

Mr Kwinter: You have a built-in situation where the province can participate, you can participate. You could put a slight surcharge on your fees going across to pay for the thing. It's a win-win situation for everybody. I just don't understand why there is this reluctance to get involved in it. It's absolutely critical, as you say.

Notwithstanding that the government loves to say that their tax cuts are the reason the economy is booming, it's because of trade. I was in Davos and I heard an economist talk about tax cuts. He said it's like the captain of a ship saying he controls the tides. It doesn't work that way. All of these things are happening and we are the beneficiary. I'm not condemning it. I think it's fabulous that we are the beneficiary of it. There's no question that a tax cut is a lot better than a tax increase-no question about that-but the reason we are enjoying the economic activity that we are is because of trade, and anything that impedes that ability, anything that causes someone to reroute their traffic, is a deterrent.

When you're talking nine kilometres plus some other adjustments, I think it should be the highest priority. I think it's something that everybody should get behind and really make happen.

Mr Mancini: On the American side, if I could say that, under the borders and corridors program, it has been listed as the number one priority for the state of Michigan. When the Federal Highway Administration released their first set of grants to states and communities, the Ambassador Bridge gateway project received the highest grant under the borders and corridors program in the United States. That shows what the American officials are thinking.

I believe we can catch up to them very quickly. I think there are a number of things the Ambassador Bridge itself could do, and we are planning to do in the very near future, to relieve some impediments.

Huron Church Road is no longer a major urban arterial roadway; it is a piece of significant national and provincial infrastructure and it needs to be treated that way. It needs to be under provincial jurisdiction, hopefully with funding from the federal government through the new infrastructure program they're announcing.

We're prepared to do our part. We are more than prepared to do our part. We're anxious to do our part.

The Chair: On behalf of the committee, thank you very much for your presentation this afternoon.

Mr Mancini: I can't have a question from my old friend Mr Bradley?

The Chair: We'll do that after the meeting.

A couple of short announcements: The taxi will be leaving from in front of the hotel at 4:30 sharp.

This committee will reconvene tomorrow morning at 10 o'clock in room 151 at Queen's Park. This committee is now adjourned.

The committee adjourned at 1536.

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