Committee Transcripts: Standing Committee on Finance and Economic Affairs - 2000-Mar-08 - Pre-Budget Consultations

Pre-Budget Consultations
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PRE-BUDGET CONSULTATIONS

CONTENTS

Wednesday 8 March 2000

Pre-budget consultations

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)

Clerk / Greffier

Mr Tom Prins

Staff / Personnel

Ms Elaine Campbell, research officer,
Mr David Rampersad, research officer,
Research and Information Services

The committee met at 1001 in room 228.

PRE-BUDGET CONSULTATIONS

The Chair (Mr Marcel Beaubien): Good morning. It is after 10 o'clock, so I will bring the meeting to order. I hope that everyone has received a copy of the amended report. Is there any discussion on it?

Mr Ted Arnott (Waterloo-Wellington): Mr Chairman, shall we go point by point through the amendments that were changed so that all the committee members would be-

The Chair: I'm willing to entertain anything from committee members.

Mr Arnott: He appears to have highlighted these areas. I assume the ones that are underlined are the changes we discussed.

Mr David Rampersad: Yes, those underlined are the phrases that it was suggested we replace the existing phrases with. The existing phrases, the old ones, have been crossed out, as it were.

Mr Doug Galt (Northumberland): Chair, I haven't managed to get to my office since the last time we left here. Is there an extra copy?

The Chair: Yes.

Mr Galt: My apologies that I haven't studied it in great detail, but I'm sure I can catch up.

The Chair: We'll go through the report with the amendments.

Mr Rampersad: On page 1, in the middle of paragraph 3, the original draft said "GDP for 1999 as a whole was 5%." It was suggested that we change that to "is estimated to be 5%." The last sentence of that paragraph initially read, "It is estimated that GDP growth for the year 2000." It was suggested that that be changed to "Based on private sector forecasts at the time, it is estimated that GDP growth for the year 2000 could range between 3.7% and 4%."

In the fifth paragraph on that page, which begins with "The employment picture," the second sentence initially had read, "During 1999, 173,000 new jobs, mostly full-time, were created." We were asked to update that so it would read, "198,000 new jobs were created."

Mr Galt: Just for my help-I wasn't here for part of that morning. The second paragraph under "Economic Outlook" says that 90% of Ontario's exports go to the US. The figure I have always heard in the past was 80%. I see you are shaking your head; 90% is the right figure, is it? OK. For some reason or other, I had always heard 80%, and it was one I had highlighted originally.

The Chair: I think we are only going by some of the figures that were given to us by, I think, the truckers' association-

Mr Rampersad: And McCallum.

Mr Galt: OK. I was just double-checking.

Mr Rampersad: A number of people other than the minister and the ministry had suggested that 90% was probably the appropriate figure.

Mr Galt: Closer.

Mr Rampersad: Yes.

Mr Galt: OK. Thank you.

Mr Rampersand: On page 2, the third paragraph, the first line read initially, "For the fifth year in a row the deficit target will be exceeded." It was suggested that be changed to: "For the fifth year in a row the deficit target should be exceeded. Ontario is on track to eliminate the deficit in the year 2000-01."

In the next paragraph, first line, after "$1.1 billion," initially the sentence read "since the 1999 budget," and it has been changed to "over the 1999 budget plan" and the following sentence has been changed to reflect what the committee said. It should read, "Significant additional expenditures for the third quarter of the fiscal year 1999-2000 include a $200-million increase in expenditure on the OPSEU pension plan, $196 million for hospitals." Initially we had had "health" and it was suggested that perhaps "hospitals" was more appropriate. That was checked in Hansard and, indeed, "hospitals" was mentioned. The word "for" is to be replaced by "as a result of the Canada-Ontario social housing agreement."

In the paragraph after that it was suggested we delete the second sentence beginning with "At the same time." That has been done.

Page 3, under "Debt repayment": It was suggested that the opening sentence be changed to read, "Once the budget is balanced," instead of "Having achieved a balanced budget," because the budget has really not been balanced yet, at least not formally anyway.

In the middle of that paragraph, after "$2 billion" initially we had "during," which has been replaced by "over," as the committee recommended.

Further down, under the heading "Taxes," second paragraph, first line, the phrase "it was pointed out" has been changed to "other witnesses have argued." The second sentence has been changed to make it clear that these witnesses have continued to argue that social services could be jeopardized, as it were. The last sentence has been amended somewhat to read, "Some witnesses proposed that," to make it quite clear that presenters had made these proposals.

In the last paragraph on that page, the first line has been changed to reflect what the committee said so that we now have "Ontario's general personal income tax rate" instead of "Personal income taxes." As you can see, as I just noted, we should actually say "personal income tax rate has already been reduced."

Page 4: The first paragraph, the first line, the phrase "The marginal tax rates" was changed, amended with a qualification to "High top marginal rates." The third line was also changed to reflect that amendment, so we now have "top marginal rates," "they are penalized when the top marginal rates begin to be applied at the income level of $63,000." Again, two lines down, we have included "top marginal rate" to reflect what the committee suggested.

In the following paragraph, second sentence, the original sentence was changed to read, "Among other things, the province is unable to introduce policy measures other than rate changes without federal concurrence."

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The first line of the following paragraph was amended slightly to read, "The Minister of Finance stated that the `made for Ontario' personal tax system," instead of simply saying, "The `made for Ontario' personal tax system."

In the following section, "Corporate Taxes," the correct name of the business tax review panel was actually given, as opposed to the initial name, which was not entirely correct.

On page 5, "Payroll Taxes," we clarified that the EHT has been totally eliminated for self-employed individuals and businesses with payrolls under $400,000. Under the section headed "GST-PST Harmonization," the second sentence, it was made clear that witnesses argued that the current system created regretted compliance costs etc.

On page 6, since it was felt that the first sentence was perhaps inappropriate, it was deleted and the second sentence was amended to read, "Some witnesses were concerned that the introduction of the province-wide assessment system...." And toward the end of that paragraph, the penultimate line has been amended to take into account the changes suggested by the members of the committee so that it therefore reads, "it has resulted in a number of municipalities postponing decisions."

Mr Monte Kwinter (York Centre): There's a typo in there.

Mr Rampersad: No, that's a deletion; there's a slash across it. Perhaps it hasn't come out too clearly.

In the last paragraph on that page, entitled "SuperBuild," it was suggested that the term "private sector investment" should be changed so that the sentence would read, "These proposed partnerships are the key to leveraging government's initial investment of $10 billion over five years to attract matching investment from the private sector and other non-governmental partners." And further down, at the end of that page, the last line, we were asked to qualify "education" by inserting "post-secondary" to clarify one of the priority areas.

On page 7, the section headed "Transportation," it was suggested that we indicate that witnesses had suggested that this indeed was the case. So I inserted the phrase, "It was suggested by one witness" that in the past, too many provincial transportation projects have been not taken into account etc. I inserted that phrase since I thought perhaps it might be best that-

Mr Galt: I'm really concerned about this transportation one. There is a part of Ontario that's east of Yonge Street. The corridors into the US being Windsor, Sarnia and Niagara Falls, Ottawa is closer to New York City, and we need some of that infrastructure in eastern Ontario. There is something east of Yonge Street. I think most people in Toronto have forgotten that there is anything out there.

The Chair: I think you make a very valid point; however, if you look at the presentations that were made in front of the committee, I don't think anybody talked about crossing east of Yonge Street. Really, if we're going-

Mr Galt: I just had to protest a little.

The Chair: I know. You make a very valid point, but really, to be fair, there was no discussion with regard to crossing-I don't know if east of Yonge Street is the right boundary, but I'll settle for that.

Mr Galt: Maybe in our new task force we can get that one sorted out.

Mr Rampersad: We turn now to the section entitled "Red Tape Commission," the second sentence. At the instruction of the committee the phrase "since its institution" was changed to "between 1995 and 1999." At the end of that sentence, initially we had "amended 149 others." In fact, the number of statutes amended is 150, so the "149" has been changed. We changed the phrase "approximately 1,300 pieces of outdated legislation" to read "more than 1,300 regulations that the commission considered outdated have been revoked." The last sentence was amended to indicate that the witnesses made reference to the commission-that "There was consensus that the commission be made permanent."

"Agriculture," the fourth sentence: Initially we talked about "The reduction of government support." It was suggested that we indicate "According to a number of organizations representing agriculture," so that the sentence has been amended to read beginning "According to a number of organizations representing agriculture."

Looking further down to the section "Trucking," questions were raised about the taxes, the total revenue from taxes, as well as the cost of diesel fuel. I was asked to check those figures. Indeed, those figures were mentioned by the Ontario Trucking Association. I clarified that sentence by changing it to read, "According to the Ontario Trucking Association, the various taxes on the industry result in revenues of approximately $200 million per annum," and then went on to talk about the price of diesel fuel being "approximately 176% higher than it was a year ago."

Further down that page, under the section entitled "Small Business," we had talked about venture capital funds. It was suggested that we clarify who made the remarks about venture capital funds, so the sentence has been amended to read, "According to representatives of small business, venture capital funds are appropriate for only a very small percentage of the sector."

Elaine Campbell will walk you through the rest of the report.

Ms Elaine Campbell: The first place to go is the top of page 10, under "Snowmobiling." I haven't added anything there, but there had been some discussion in the meeting on Monday about the need to elaborate on what the government has done with respect to funding assistance to the snowmobiling industry or activity.

I went back to the Hansard and found that there had been nothing specific said about the Northern Ontario Heritage Fund Corp or $5 million. I had inserted the reference to the NOHFC for the purposes of clarification but there was no mention in the Hansard about the actual amount of money that the province was contributing to that particular activity. I guess my question is, do we just leave the paragraph as it is or is there a need to insert a direct reference to the amount of money?

Mr Kwinter: We've had this discussion about several other references prior to this. I think that my position, and the one that I would recommend, is that we do exactly what we've done in every one of them. If it was not mentioned at the hearings, I don't think we should be inserting it at this point. If the government side wants to, in their recommendations, expand on it and put all this information in from their particular point of view, I have no problem with that. This section of the report should reflect what was presented to us without any editorialization on our part. That's the position we took earlier and it's the position I think we should continue to take.

1020

The Chair: Any other comments?

Mr Galt: I'm not so sure I'm clear on it even yet. What I was hearing in Kenora was that the fees for the trail were non-competitive with the fees for Manitoba and North Dakota and possibly some other states that I don't recall. That was a concern they had, and the concern related to the fact that they were set for all of Ontario and then some of it came back to the local association. They were saying they wanted to have a lower fee in northern Ontario, at least that was a concern I was hearing, that they weren't being competitive. Was that not on the record someplace?

Ms Campbell: It was. I took the liberty of focusing in on the items that were raised more often-and more clearly, actually.

Mr Galt: Having said that, I'm not so sure that setting those fees has anything to do with Ontario as a province, if it was more to do with the association. As I say, I was never totally clear. It never got totally sorted out whose responsibility it was, but certainly they seemed to think it was a big issue up there because the snowmobilers were not coming in. When we hit Timmins-what was there? Forty snowmobiles in the yard. It was a big thing for the hotel that we stayed in that night. That was my concern from there and just how that fit in. I'm just expressing my concern.

The Chair: Are you suggesting there should be an amendment?

Mr Galt: I'm not suggesting there should be, because I'm searching for what the information really was. I'm not so sure it's a provincial responsibility, but it was a concern I heard from the snowmobilers.

Ms Campbell: I got in touch with the Ontario Federation of Snowmobile Clubs to get some clarification. I think, like you said earlier, Mr Galt, there may be another side to the issue. I'm not still not too clear on the politics of what is going on there, so I felt maybe it was better not to include that in there.

Mr Galt: I think, Mr Chair, probably just leave it as is. I've sort of expressed that that did come up there. It's something that, if anyone was in discussions with Mr Eves, might be brought forward at that time.

The Chair: Ms Campbell.

Ms Campbell: The direction is to keep things as they are.

In the next paragraph on mining, there are a number of items here. To begin with, in the first sentence of the paragraph, "Provincial Revenues" has been changed to "Provincial government revenues." In their presentation, the Ontario Mining Association reported that the mining industry contributes $1.5 billion to government revenues, but they made that statement under the heading "Value of Mining to Ontario."

The number "160,000" has been changed to "106,800" in the first sentence of that paragraph. The latter number is what appeared in the Ontario Mining Association's presentation.

In the second sentence of that paragraph, "In northeastern Ontario alone, over $1 billion" has been changed to "In northeastern Ontario alone, approximately $1.2 billion." The latter figure is what appeared in the presentation made by the Porcupine Mine Managers' Association.

In the fourth sentence, "Ontario mineral exploration experienced" has been changed to "Ontario mineral exploration expenditures experienced." The Porcupine Mine Managers' Association had made several references to expenditures earlier in its brief.

Also, in the fourth sentence of that paragraph, there was some concern over the use of the 36% figure. We were asked if the figure was maybe not 34%. I went back to the Hansard and I found that the figure 36% was what the Porcupine Mine Managers' Association presented in their brief to the committee.

When the Ontario Mining Association appeared before the committee, they had in their brief figures for 1995 and 1998 as well, but their percentage change over the same time period was 34%. So it's a case of using the 36% from the Porcupine Mine Managers' Association as opposed to the 34% from the Ontario Mining Association.

The Ontario Mining Association also had a dollar figure for 1999, and I worked out the percentage change for that from 1995 to 1999 and it was 44.6%. So the sentence could be left as it is with a reference to that figure being one provided to the committee by the Porcupine Mine Managers' Association, or we could change it to 34% and say that that was what the Ontario Mining Association had said.

Mr Arnott: Or alternatively you could say "between 34% and 36%." Would that be another way of-

Ms Campbell: That's a compromise.

Mr Arnott: But just looking at the sentence, it doesn't really attribute it to anybody in particular.

Ms Campbell: Well, the suggestion here is that we attribute it through clarifying. So is it the committee's direction to say "between 34% and 36%"?

Mr Arnott: It would be my suggestion that we use the 34% attributed to the mining association, in that they're a larger association perhaps than the other group and might have access to more up-to-date research.

Mr Kwinter: I like the idea of the 34% to 36%. Why don't we just say "representatives of the mining industry have stated that Ontario mineral exploration expenditures have experienced a 34% to 36% decline in investment" and attribute it to the industry? Because we had the Porcupine group, we had the Ontario Mining Association. The number is between 34% and 36%, who knows? It's just an estimate on everybody's part.

The Chair: Are we agreeable to this?

Mr Arnott: Yes.

Ms Campbell: Moving on, at the bottom of page 11 there was a very small change made in the paragraph under "Universities." The word "the" has been removed from the final sentence.

On page 12, the first paragraph under "Health," the word "care" was added between "health" and "system." I think we should separate "healthcare" into two words there.

Then on page 13, the first paragraph, there were some changes made to the final sentence: "Consideration should also be given to implementing incentive programs with varied payment schedules and to recommendations made by Dr Robert McKendry."

Moving on to page 15, you'll notice that we have inserted the recommendations which were voted on and passed at the meeting on Monday.

The Chair: Any further discussion?

Mr David Christopherson (Hamilton West): No, other than to thank the researcher.

Mr Arnott: I'd just like to take one minute to read through the recommendations that the committee adopted. You don't have to read them. I'm asking for a minute of the committee's time to take a quick glance over them.

The Chair: Yes, sure.

Mr Christopherson: As long as your lips don't move when you're reading, Ted.

Mr Arnott: I need my fingers to count.

Thank you.

The Chair: OK. If there's no further discussion I'm going to need a motion to approve the amended report, including the changes on pages 3 and 10 that we made this morning. The change on page 3, Mr Christopherson, was strictly a typo whereby we changed at the bottom, "The rate has already been reduced by 30%." Then on page 10, I think you were here for that.

Mr Christopherson: I've reviewed it anyway and I was fine with all the changes.

Mr Arnott: Could you repeat that?

The Chair: Page 3, at the bottom. I think it reads-

Mr Arnott: Change the word "have" to "has."

The Chair: Yes, "has already been reduced by 30%," right.

Mr Christopherson: When we vote I would like it to be clear that it's strictly on the report part and not the recommendations we adopted two days ago.

The Chair: That's right, although they make up part of the report.

Mr Christopherson: OK, so you're going to take a vote then on the report and the recommendations?

The Chair: That's right, yes.

Mr Christopherson: We really didn't gain much for all that, did we?

Mrs Tina R. Molinari (Thornhill): A procedural question: Are we not voting now on the changes that have been made that are in fact the changes that we've discussed?

The Chair: That's right.

Mr Christopherson: The report, as amended.

The Chair: For the report, as amended right now.

Mr Christopherson: If we include the recommendations, we're not going to vote for it. So all the co-operation we did is nice, but-

Mrs Molinari: We can vote for them separately. You can vote for them-

Mr Christopherson: I asked them, and apparently not. The recommendations will form part of the committee report. We are on record as having said the other day we're OK with the report. But it's the final vote that matters. When we vote, obviously we're going to be opposed.

Mrs Molinari: For it to reflect the committee-

The Chair: First of all, we would vote on the report, as amended, with the changes on pages 3 and 10, and then we'd have a vote on the entire report, which includes the recommendations.

Mrs Molinari: Then that would force the opposition to vote against it.

The Chair: That's right.

Interjection: Unless they wanted to support it.

Mrs Molinari: Technically, could you not separate the two so that they'd give the-

Mr Kwinter: We are separating them.

The Chair: Yes, we are.

Mrs Molinari: No, by separating the report from the recommendations, so that they can vote against the recommendations and vote in favour of the report.

Mr Kwinter: Mr Chair, if I could-I don't have to speak for you; you can speak for yourself. What has happened is that we are going to vote to accept the report, as amended. After that, we then have the report, which is the amended report plus the recommendations, and we're going to vote on that. That can't be separated, because the recommendations are part of the report.

So the first thing is that we have to vote for the amendments. We then have a final report that has been amended, and that's what we're going to vote on. Because the recommendations are part of it, we will have to vote against it, but that's not a problem. You're still going to get it passed, so just do it.

Mrs Molinari: I think it's procedurally incorrect, but fine.

The Chair: I don't know if it's procedurally incorrect, but I thought it made sense, so I think we'll proceed with the amended report with the corrections on pages 3 and 10. I need a mover.

Mr Kwinter: I'll move it.

The Chair: Moved by Mr Kwinter. I'll pose the question: All those in favour? That's carried unanimously.

I'll entertain a motion to accept the report with the recommendation.

Mr Arnott: So moved.

The Chair: I'll now pose the question: All those in favour? Opposed? It carries, three to two.

I also need a motion authorizing the Chair to table the final report.

Mr Arnott: So moved.

The Chair: All those in favour? Opposed? It carries, three to two.

Mr Kwinter: Mr Chairman, on a point of clarification: Should there not be some reference to the point that this is not the final report, that there is going to be a minority report which is going to be included-

The Chair: That's right.

Mr Kwinter: -and then to table the total report, as opposed to this not being the report?

The Chair: I think we made it fairly clear that you have until March 21 to-

Mr Kwinter: I just want to make sure we have that on the record, that it's clarified.

The Chair: Yes, and that will be attached to the report itself. I took that as a given.

Mr Kwinter: OK.

The Chair: Next, we need a motion that the report be sent for translation and printing after we've received the dissenting positions from the opposition parties.

Mr Christopherson: So moved.

The Chair: All those in favour? That's carried.

I need a motion that a copy of the draft report be forwarded to the Minister of Finance.

Mrs Molinari: So moved.

The Chair: All those in favour? That's carried.

That's it, I think. There's nothing else.

Mr Kwinter: May I move adjournment?

Mr Arnott: Before that, I just want to thank the opposition members for the co-operative approach they have taken to this piece of work over the last number of weeks. We thank you very much for your participation, and thank you, Mr Chairman.

The Chair: Mr Kwinter has moved adjournment, and we are now adjourned. Thank you.

The committee adjourned at 1034.

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