Committee Transcripts: Standing Committee on Finance and Economic Affairs - 2001-Feb-19 - Pre-Budget Consultations

Pre-Budget Consultations
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PRE-BUDGET CONSULTATIONS

ONTARIO PUBLIC SERVICE EMPLOYEES UNION

CANADIAN UNION OF PUBLIC EMPLOYEES, LOCAL 2204 / OTTAWA-CARLETON CHILD CARE ASSOCIATION

OTTAWA-CARLETON DISTRICT SCHOOL BOARD

CANADIAN TAXPAYERS FEDERATION

CANADA'S RESEARCH-BASED PHARMACEUTICAL COMPANIES

CANADIAN ADVANCED TECHNOLOGY ALLIANCE

OTTAWA-CARLETON CHILD POVERTY ACTION GROUP

OTTAWA ECONOMIC DEVELOPMENT CORP

TASK FORCE ON POVERTY IN OTTAWA-CARLETON

CANADIAN CHEMICAL PRODUCERS' ASSOCIATION

OTTAWA-CARLETON ASSEMBLY OF SCHOOL COUNCILS

ALEX CULLEN

ONTARIO SCIENCE AND INNOVATION COUNCIL

ONTARIO AGENCIES SUPPORTING INDIVIDUALS WITH SPECIAL NEEDS

CHILD AND YOUTH FRIENDLY OTTAWA

QUINTE VOCATIONAL SUPPORT SERVICES

CONTENTS

Monday 19 February 2001

Pre-budget consultations

Ontario Public Service Employees Union
Mr Bob Eaton
Ms Pam Smith

Canadian Union of Public Employees, local 2204; Ottawa-Carleton Child Care Association
Ms Shellie Bird
Ms Kathy Yach
Ms Rachel Besharah
Ms Sabina Lysnes
Ms Kasia LeBlanc
Ms Jo-Ann Hightower

Ottawa-Carleton District School Board
Mr Jim Libbey
Mr Jim Grieve

Canadian Taxpayers Federation
Mr Walter Robinson

Canada's Research-Based Pharmaceutical Companies
Mr Murray Elston

Canadian Advanced Technology Alliance
Mr David Paterson

Ottawa-Carleton Child Poverty Action Group
Ms Christina Marchant
Mr James Kuhns
Ms Lynn Sherwood

Ottawa Economic Development Corp
Mr Chris Henderson
Mr Michael Darch

Task Force on Poverty in Ottawa-Carleton
Mr Cliff Gazee
Ms Candice Beale
Ms Terrie Meehan

Canadian Chemical Producers' Association
Mr Richard Paton
Mr Dave Podruzny
Mr Mike Hyde

Ottawa-Carleton Assembly of School Councils
Ms Cynthia Pohran
Mr John Dingwall
Mr Greg Laws

Mr Alex Cullen

Ontario Science and Innovation Council
Dr Suzanne Fortier

Ontario Agencies Supporting Individuals with Special Needs
Ms Mary Frances Taylor
Ms Cathy Wood
Mr Douglas Ward

Child and Youth Friendly Ottawa
Mr Marc-André Belair
Mr Alexis Carty

Quinte Vocational Support Services
Mr Patrick Connor

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)
Mr David Young (Willowdale PC)

Substitutions / Membres remplaçants

Mr John O'Toole (Durham PC)
Mr Richard Patten (Ottawa Centre / -Centre L)

Clerk / Greffière

Ms Susan Sourial

Staff / Personnel

Ms Elaine Campbell, research officer,
Research and Information Services

The committee met at 0900 in the Ottawa Sheraton Hotel, Ottawa.

PRE-BUDGET CONSULTATIONS

The Chair (Mr Marcel Beaubien): Good morning, everyone. I'd like to bring the morning meeting to order. It is 9 o'clock. I hope everyone had a nice weekend. Welcome here, Mr Patten. It's nice to see you.

Mr Richard Patten (Ottawa Centre): Welcome to Ottawa Centre.

The Chair: It's always our pleasure to come to Ottawa; it's nice and cool.

ONTARIO PUBLIC SERVICE EMPLOYEES UNION

The Chair: Our first presenters this morning are representatives from the Ontario disability support program subcommittee, OPSEU. Could you please come forward and state your names for the record. On behalf of the committee, welcome. You have 30 minutes for your presentation this morning.

Mr Bob Eaton: For the record, my name is Bob Eaton.

Ms Pam Smith: My name is Pam Smith.

Mr Eaton: Good morning, committee members and honourable Chair. As I stated, my name is Bob Eaton, and with me today is my colleague, Pam Smith. I'm the OPSEU chair of the Ministry of Community and Social Services employee-employer relations committee. Pam is the OPSEU chair of the Ontario disability support program, a subcommittee of MERC.

We are here today to educate this committee and to provide a front-line perspective on issues related to the provision of services to disabled Ontarians. In our presentation, we hope to highlight the obstacles and challenges faced by the disabled community, their families and their service providers. We will indicate service gaps, inappropriate resource allocation and suggestions for improvement. We are here to advocate on behalf of our clients and in fact on behalf of all forward-thinking members of our communities. Thank you for granting us this opportunity and for your attention during the next 30 minutes.

The Ministry of Community and Social Services is the lead ministry when it comes to the administration and provision of the majority of services for the disabled. Within the scope of the MCSS mandate we are going to examine the following programs: the Ontario disability support program, the ODSP; assistance for children with severe disabilities, ACSD; special services at home, SSH; and developmental services. It is our submission that, at best, these programs are woefully inadequate. At worst, their chronic underfunding and lack of purposeful direction is an indication of a paternalistic, archaic and inappropriate attitude toward the disabled and their needs.

Each and every one of us in this room knows and understands political process. We have all heard government rants about special interest groups. We have all heard about self-interested union bosses. We have all read in the media accusations that friends of the government have made out very well in the past five years. We cannot and must not allow those dynamics to come into play during this debate. Disabilities know no boundaries. Disabilities don't care about who you vote for or how much money you earn. Disabilities aren't regional. They have no preference for age groups. Disabilities don't discern union from management. Disabled Ontarians are not a special interest group. They are our mothers and fathers, our brothers and sisters, our grandparents, our neighbours, our friends, our children and our grandchildren. All of us are vulnerable. An accident, a sickness, a medical mistake-all of us are that close to being on the other side looking in. And if it's true that a society is truly judged by the way in which it treats its most vulnerable, then I'm afraid we're in for a fairly negative evaluation.

Several months ago, families had to go public with their plight as it related to the custody and care of their children. In a civilized society, this is simply unacceptable. No parent should ever be faced with the choice of giving up their child in order that needed services be made available. No ODSP client should have to retell their story over and over again to a team within an office. They are entitled to an identifiable, accountable case manager to supervise their individual case. Clients should not die in an inappropriate placement simply because bureaucrats determine that a zero admittance policy to the province's remaining DS facilities supersedes human need. Ministers should not make public statements intimating the closure of directly operated facilities when there are no viable alternatives available. Parents should not be faced with a lack of available talent due to low wages and lack of benefits and security when searching for respite or developmental care. No parent should have to contemplate placing their child in residential care just because they feel they can no longer cope emotionally, physically or financially. And government policy should not be made to exacerbate these problems. Rather, service should be prompt, seamless, coordinated and, most of all, humane. Only then can we suggest that we are on our way to a just, caring and civilized society.

I'll now turn the floor over to my colleague Pam Smith. She will walk the committee through the presentation that we have prepared.

Ms Smith: OPSEU brings a unique perspective to this table, as we represent front-line professionals who provide direct services through the Ontario public service and whose services are contracted out through transfer payment agencies such as the Association for Community Living. OPSEU members are dedicated to the notion that disabled Ontarians are entitled to accessible, quality services and benefits.

If we take a look at the current fiscal climate spanning the budget periods from 1996 to 2000, Ontario government revenue has increased by 27.3%. With such a substantial growth in revenue, OPSEU would urge the government to reinvest in staffing resources within the Ontario disability support program.

If you refer to the chart on page 2, from the Ontario Outlook and Fiscal Review, you will see that revenue has indeed increased and we are in a position-we have been for the last two years-where there is a surplus. This chart was obtained from the Ontario Ministry of Finance.

Background on the ODSP: in June 1999 the Ministry of Community and Social Services assigned staffing to the Ontario disability support program. The way they came up with the ratio was one income support specialist, one client services rep and half an income support clerk position to every 500 clients on a caseload.

As well, in place of traditional caseload management, the ministry introduced a case pooling approach, whereby all cases were managed by an alpha split. For instance, as an income support specialist, I would be assigned cases whose last names began with the letters A to E, and each month this would rotate, so we would not have active caseloads. Income support specialists would rotate, and this was a very confusing and frustrating situation for both staff and clients. The result was program inconsistency and varying levels of customer service.

Since the implementation of ODSP, staffing resources have been woefully inadequate. This results in clients waiting longer for services and benefits.

In July 2000, OPSEU compiled a survey that was conducted on the business practices of the Ontario disability support program. We sent a survey out to our membership, and we had 29 offices reply. The survey was conducted between June 1 and June 30. The results were pretty much reinforced by ministry officials at our MERC subcommittee table, who said their findings, from what we were saying, were pretty much mirroring what they were seeing and hearing as well.

In September 2000, the ministry, after a series of delays, finally released results of their business process review. In a nutshell, all this review did was take the same amount of work and develop new workflow processes with the same amount of staff.

OPSEU was disappointed, to say the least, in this management approach. While there is some merit to some of the proposed changes, streamlining workflow will not work the same in all offices. For instance, if you take an office that has a large urban population, their needs and impacts are very different from an office in the north or in rural Ontario.

The ministry will argue they piloted this new process in three ODSP offices. Pilots can serve a purpose, if you are open-minded enough to accept the changes and are willing to adapt the process and incorporate those changes. Our position is that the pilots were rushed and provided limited testing of the product. We feel these pilots were rushed because the ministry has a contract with Andersen Consulting, now named Accenture. The contract expires in January 2002. We believe there wasn't adequate piloting of this new process. We see this simply as a dress rehearsal for the new computer system, called the service delivery model.

Under customer service issues, we continue to raise issues around a client's ability to access service in a timely manner with the implementation of the integrated voice response system, which is a centralized service to clients where they are given a PIN and can phone in to access a limited amount of information on their files; for instance, what their cheque will be at the end of the month or if their case is ongoing or on hold, things like that.

On December 20, the ministry indicated that 90,400 ODSP calls had been received from integrated voice response. The premise was that this was supposed to take some of the pressure off the local offices. What we're finding is that clients, by and large, don't trust the system. They are calling us to revalidate the information they've been given. Also, the figures the ministry released were that 283,000 Ontario Works clients accessed the information as well. The ministry was unable to clarify at that time, and has not been able to since, whether this was representative of the number of clients who used IVR or the number of calls they received. For instance, was one client calling 10 times? Was that counted as 10 clients, or was that counted as one call? That hasn't been clarified for us yet.

We have also indicated repeatedly that many of our clients do not trust the system and will not use the system. In addition, clients who have difficulty with cognitive functioning skills will not be able to access this service, nor will individuals who are blind or hearing impaired or who are assisted by a trustee.

Clients who come into our offices looking for service very often leave disappointed. For example, a client who brings in a prescription for eyeglasses requiring an authorization or a prescription for medication requiring a drug card will be told that unless it's an emergency this information will be mailed out to them in two days. In the past, we would have accommodated the client. They may have had to wait in the waiting room for a few minutes, but we would have been able to accommodate them.

Clients are being discouraged from coming into our offices without an appointment. It appears that all these measures point toward further office closures and clients being forced to wait for their necessary services or travel further to access those services. When you consider that all our clients qualify for the program due to a disability, their needs may warrant immediate service. Staff shortages are having a catastrophic impact on client service and their accessibility.

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As indicated earlier, we have seen office closures: 65.5% of respondents to our survey indicated they have witnessed closures of offices within their various regions. This is problematic for staff, because they must now commute further to work or commute further to provide the service. It's also problematic for clients, who must travel further. This is extremely unreasonable and is causing financial hardship to those clients. As well, the impact on the clients' ability to receive service in or near their home community is at peril. This is a concern, especially in rural or remote areas in Ontario that do not have access to public transportation.

Just over a year ago, the ministry took over administering a program that we call mandatory special necessities. This was previously administered by the Ontario Works offices in the municipalities. Basically, it talks about diabetic supplies, surgical and incontinence supplies and medical transportation costs.

In December the ministry announced they would be reviewing the administration of MSN, and have introduced a new process whereby there is no longer a verification requirement for travel claims less than $100 per month. This is a major contradiction with the process. If a client misrepresents or makes an error in reporting his or her travel claim, there is no requirement to collect an overpayment, as MSN is a benefit. In attempting to alleviate some of the pressure of administering this new benefit, it appears the ministry is frankly just buying some time while wasting valuable taxpayers' money.

A very small percentage of clients are aware of this benefit. We are making clients aware during our update reports and when we're taking applications, but by and large it's a pretty well kept secret. At a meeting in January, the ministry admitted that approximately 8,700 clients are making use of the medical transportation costs-are claiming those. With a program that has expanded to over 190,000 households-and I stress "households," because you have clients who are single but you have clients who are family members as well. They may have two or three children, and their spouse is also eligible. When you compound it by the numbers, it's certainly more than 190,000 people. We anticipate a growing need for not only medical transportation costs but also diabetic supplies, surgical supplies and incontinence supplies. As a result, the ministry, with its current ODSP staffing, cannot possibly keep up with the demand for these benefits.

Next we want to look at program standards. Program standards are what we are monitored and evaluated on in terms of our job performance. We submit that chronic understaffing and the sheer volume of work severely restrict our ability to fully meet these standards.

The program's main accountability standard right now is the consolidated verification process. It's done every two years. That's when we meet with the client and review their circumstances with them to see if there are any changes, if there are arrears owing to the client or if there is an overpayment or adjustment needed in the benefit.

The target set for CVP interviews is eight per week. As an income support specialist, you can review eight files and have eight meetings with clients, but you can never guarantee you will have eight outcomes. So the premise is flawed. It's predicated on clients providing us the information, and it's also predicated on things that are beyond our control. For instance, Revenue Canada is supposed to be sending us the most recent income tax data. This takes two to three weeks, and we can't close the file without it. The client may come to the interview and bring everything they need and show us where they've received a pension in their bank book, but we don't know if income tax is taken off at source. Therefore we need something to verify the actual amount. All this takes time, and we cannot make that target.

Also, people are expected to travel in northern and rural areas to have interviews with clients, and yet it's never accounted for in the targets. Another other thing is technology changes. If we go out to an office that doesn't have a computer system, we take the information manually and come back and have to input it into the system. Once again, there is no accounting for that in the outcomes.

Another standard is mandatory special necessities. I talked a little bit about that earlier. We have to ensure the documentation is there and it accompanies the request. The volume of MSNs that we receive per day is staggering. We anticipate that will grow. There's a very good chance that we cannot and will not make the two-day turnaround, and we are not in most circumstances, in most situations.

When a client applies for Ontario disability assistance, applications are to be processed within 21 days. Our sense is that we simply do not have enough staff processing these referrals. A retroactive grant, where the Social Benefits Tribunal has gone back a year or a year and a half and we have to go back and recreate the data, makes it very difficult as well.

This is a growth program. There's a chart on the bottom of page 8 that demonstrates that. These figures were provided to us by the ministry. Based upon what we already know and what is being forecast, this program will continue to grow to at least 11,500 more households over a five-year period. Based upon the assumption that this has been a growth program from the onset, or at the very least for the last two years, why is the ministry not hiring additional staff? In fact, one may postulate as to why 400 workers were laid off when the program was initiated in 1999.

There's also the issue of lost provincial revenue. Under ODSP, there are provisions for family support workers to assist clients in obtaining child and spousal support. Unfortunately, we are in a position where we cannot enforce this part of the legislation, as there are no family support workers in the Ontario public service. This results in the ministry being unable to negotiate court orders and agreements. Ontario Works FSWs, family support workers, are supposed to be negotiating these agreements, assessing the adequacy of support and representing the ministry's interests in court. However, what is happening for the most part across the ministry is that we are not pursuing support; we are simply putting in a reminder to check support every six months. When that six-month time expires, we are putting it ahead for another six months. We submit that hundreds of thousands of dollars are being lost each year because the ministry does not have employees doing this function.

What's at issue with the ODSP? As previously indicated, there are several issues that point toward an increased staffing need for this program. In order to provide quality customer service, process benefits and application requests, and ensure program integrity and accountability to the taxpayer, we need additional staffing resources. There's a chart on page 10 that we've prepared outlining the number of positions that we feel we require and the cost for those positions, including benefits. These positions are also based on the top of the salary grid. It's 248 additional positions, and we feel that's minimal in terms of what is warranted due to the increased workload and caseloads of the ODSP. We are also recommending having reviews done annually in all eight regions across the ministry to determine the need for increasing these numbers.

Next, I want to talk about assistance for children with severe disabilities. This program was designed to assist parents with extraordinary costs needed for caring for children with severe disabilities. To be eligible, the child must be under 18 years of age and living at home with either a parent or a legal guardian. Based on the family's gross income, the assistance they receive from us can range from $25 to $375 per month. If you look at the chart on the bottom of page 11, it's the consumer price index for Ontario cities ranging from 1989 to the present. There's been a steady increase in costs since 1992.

Incidentally, that's the last time these rates were reviewed. Neither the rates paid to families nor the income testing levels have been reviewed since 1992. We submit that a review is long overdue. Families with children who are disabled must reach farther into their pockets, not only to feed and clothe them but also to get them the services they require.

Caring for and raising a child with a disability is a task that is difficult and compels compassion. These families need reassurances that they can continue to provide for their disabled children in the future. Without an increase in funding and rates paid to individual families, the future looks bleak indeed. Compared to the costs of residential care, ACSD is extremely economical and also fits the government's family first initiative.

The special services at home program is not based on family income and is designed to assist families caring for a child in the home with a disability or an adult with a developmental disability. Some of the typical services that are funded under this program include a worker assisting families with bathing and feeding a child. A worker will care for a child with a disability to give the parent a break and will teach children with a disability to dress themselves.

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What's at issue here is that the funding provided to support workers is minimal. This presents a problem as workers deem this work as a stepping stone or an interim measure. At $10 per hour, these highly trained workers usually move on when something higher-paying comes along. Low wages always mean a shortage of available workers in this demanding field.

This is frustrating for families and children who must constantly get accustomed to someone new. As well, it impedes the progress of the disabled child or adult, who must continually establish relationships with new workers. This becomes counterproductive and frustrating not only to the disabled child and adult and their families but also to the new workers.

To recruit and retain qualified support workers, the ministry must increase funding for these service providers. We recommend that support workers, based on their qualifications, receive wages commensurate with their skills and value.

Finally, I want to talk about a bit about developmental services. There are three remaining facilities operated by the Ontario public service. They are Rideau Regional Centre in Smiths Falls, Huronia Regional Centre in Orillia and Southwest Regional Centre in Blenheim. They care for approximately 1,200 clients. There remains a great number of high-needs, medically fragile people for whom community placements would be inappropriate. Exacerbating this dilemma is the rapidly aging population within our facilities. These folk, their families and advocates certainly favour the least disruptive option possible in terms of individual plans of care.

The only responsible recommendation is to advocate for an integrative, flexible and portable service delivery system. There is indeed a role for both community agencies and the three remaining directly operated facilities. There must be an abolition of circumstances that result in the perception that resources are somehow awarded to one service delivery philosophy at the expense of the other. Second, appropriate capital and human resources funding must be allocated to this sector that has historically suffered from chronic underfunding.

Within the three remaining directly operated facilities there is a wide range of expertise among front-line staff and various practitioners. They must and can be utilized to fill the gaps existing in various community services. Examples include, but are not limited to, seating and feeding clinics, dentistry, behavioural assessments and management, physiotherapy, hydrotherapy, geriatric and long-term care, vocational training and respite and emergency care.

The proposed model emphasizes that Rideau Regional, Huronia and Southwest Regional centres be designed and marketed as resource centres for the disabled community. Additionally, the ministry would be assured the retention of qualified, professional staff for the provision of services. It would also safeguard against any unforeseen breakdown in community placements.

Taking this suggestion one step further, one could only entertain the notion that these revamped facilities could play a significant role in the long-term care of aged individuals otherwise confined to expensive hospital wards.

I'll now turn this back to Bob, who will lead us through the conclusion.

Mr Eaton: We hope you've found our presentation this morning to be thoughtful, informative and balanced. As front-line professionals, we are absolutely committed to providing quality service to our clients.

To recap our recommendations:

Appropriate resources have to be allocated to the ODSP in order to provide clients and taxpayers with an accountable, identifiable case manager. Ancillary positions must also be increased to compensate with current deficits and expected growth rates.

ACSD benefit rates and income-testing levels must be reviewed and adjusted immediately in order to support families in their efforts to care for children within the confines of the family home. Currently the maximum rate is $375 per month, reduced according to income. At $48,000 to $49,000 per year, a Toronto family at the maximum level of support will see the ACSD disappear entirely.

Special services at home must increase benefits so that they are commensurate with the need to hire highly skilled, trained professionals to provide in-home developmental services and respite care. Increased wages should also attract more professionals into the field, negating the current human resource deficit and competition for resources.

The government should make capital investment into the province's remaining developmental services facilities in Smiths Falls, Blenheim and Orillia a top priority in the development of resource centres for the disabled. There should also be a commitment made by the government toward enhancing wages within the transfer payment sector in order to solidify staffing complement. This would lead to achieving the three Cs of care, commitment and consistency.

Though not part of this paper, the government should immediately review its policy vis-à-vis special-care agreements to ensure that our most vulnerable families receive appropriate and timely assistance.

Finally, the government should commit itself to working with all stakeholders in a quest to meet the mandate of providing programs and support for disabled Ontarians, their families and their caregivers. An annual forum dedicated to issues affecting the disabled would be a positive first step toward creating a responsive, accountable and seamless service delivery system.

Thank you for attention. We would now welcome any questions or comments.

The Chair: On behalf of the committee I would like to thank you for your presentation, but there is no time for questions as you have used the entire 30 minutes this morning. Thank you again.

CANADIAN UNION OF PUBLIC EMPLOYEES, LOCAL 2204 / OTTAWA-CARLETON CHILD CARE ASSOCIATION

The Chair: Our next presentation this morning, according to your agenda, is from CUPE local 2204, Brockville, but it's also a joint presentation, I'm told, with the Ottawa-Carleton Child Care Association. Could you please come forward and state your names for the record. On behalf of the committee, welcome.

Ms Shellie Bird: Hi. I'm Shellie Bird from CUPE 2204 and this is Jo-Ann Hightower from the Ottawa-Carleton Child Care Association.

The Ottawa-Carleton Child Care Association and the Canadian Union of Public Employees, local 2204, Child Care Workers of Eastern Ontario, would like to thank the standing committee on finance and economic affairs for giving us this opportunity to present before you.

Together, our organizations represent 50 child care agencies, which provide early learning and care services to approximately 2000 families in the city of Ottawa.

I'm going to be perfectly honest. Our organizations spent considerable time debating the usefulness of presenting before you today. We have made numerous appearances before this and previous governments on the issue of child care. And we are tired. We are tired that our plea for a system of early childhood development and care services continues to fall on deaf ears, despite the overwhelming scientific evidence and the crying need for it. We are tired from trying to maintain a high standard of early learning and care services while this government financially cripples the regulated child care sector. We are tired of trying in vain to respond to the real and immediate needs of children and their families in our community. We are truly at a loss as to what more we can say to you in order for you, our elected representatives, to understand and take action on the pressing need for early learning and care services in this province.

We stand here before you today and ask, how many more generations of children and families will governments continue to fail? We have countless studies and reports, and the findings of endless commissions, all stating the need for a comprehensive government-funded and regulated system of early childhood development and care services.

We have a number of people who will be bringing forward the studies that go back more than 30 years.

Ms Kathy Yach: Good morning. I'm Kathy Yach. I'm a member of the of the OCCCA. Believe it or not, I'm 60 years of age. I was a young child when the dominion-provincial wartime agreement was signed and enabled 50% provincial-federal cost-sharing for nurseries for children whose mothers were employed in essential war industries.

Ms Rachel Besharah: I was a baby when the Royal Commission on the Status of Women recommended a national daycare act and funding for a universal child care system.

Ms Sabina Lysnes: My name is Sabina and this is my daughter Anna, who's in child care. In 1974 I was a young child when the Day Care Reform Action Alliance successfully fought the Birch proposals, the provincial government's proposed reduction in staff-child ratios and other standards reductions to reduce costs.

In 1985 I was in elementary school when the Rosalie Abella report of the Commission of Inquiry on Equality in Employment called for the establishment of a national system of child care to support families in their parenting roles.

Ms Kasia LeBlanc: In 1986 I was two years old when the Katie Cooke report called on the federal government to establish a national system of child care services.

In 1987, the New Directions for Day Care government policy initiative promised a comprehensive policy that recognized child care as a basic public service.

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Ms Besharah: My daughter Olivia was two years old when the Ontario Royal Commission on Learning called for a government-funded and regulated system of child care.

Ms Bird: In 1999, the recommendations from the study Our Child Care Workforce: From Recognition to Remuneration called for adequate government funding and regulation for early learning and care services, and we are hoping that these recommendations will be of benefit to this generation of children.

Ms Besharah: The provincial study The Early Years envisioned the development of a system of early child development and parenting centres to support children from conception to formal school entry, as well as their families.

Ms Jo-Ann Hightower: The first recommendation of the provincial government's Education Improvement Commission called on your government to strengthen its commitment to Ontario's children by ensuring their access to affordable, high-quality child care programs and excellent standards of nutrition, health care and safety.

We've had enough reports, commissions and studies. We've done enough pilot projects. You have more than 30 years of research right here before you, including your own Early Years study, that tell you what government must do to ensure that children are healthy, safe, socially engaged and ready to learn.

UNICEF's State of the World's Children 2000 report urged all governments to act, calling effective investments in health, nutrition, education, child care and basic protection both a moral imperative and sound economics.

We've got homegrown examples in Quebec and British Columbia of how to deliver a provincial system of early childhood development and care services. In Ontario, we've got a booming economy and a provincial budget surplus. There is no excuse for denying more than 70% of young children in this province the kind of early learning and care services that we know best support their healthy development.

We are asking this committee to recommend substantial provincial investments into a comprehensive system of early childhood development and care services similar to those in Quebec and British Columbia. To achieve this goal, we ask that you use the $844 million in federal money over the next five years as a portion of the funding required to implement a universal system of early childhood development and care services.

History should tell you that this is an issue that's not going to go away. No matter how many governments choose to sidestep, study, negate and avoid this, it is not going away. It's not going away because we live in an economic order that requires more and more parents of young children to work. Their child care needs are real and pressing.

You've got all the research you need to tell you what to do. Maybe a few words from a parent will remind you why it is important for government to invest in children and their families.

I would like to reintroduce Rachel Besharah. Rachel is a parent of a young child named Olivia. She has agreed to present today because she thinks it is important that you understand what regulated high-quality child care has meant to her and her family.

Ms Besharah: Hello. I'm Rachel Besharah. I'm here today because I think it's important for this committee to hear from a parent what parents need. I know I speak for many families when I say that almost all of us need child care at some point in our lives. Whether it be our own children, grandchildren, nieces or nephews, the need for child care at some point touches most of us.

My daughter Olivia is five and, I am proud to say, has been in daycare since she was four months old. When Olivia was born, I was a student barely surviving on OSAP with a partner who was earning below the poverty line. I was fortunate enough to be offered a child care space which enabled me to continue with my studies. I missed her all day long, but was greatly comforted when I would arrive to pick her up every day. Olivia was thriving in a learning atmosphere that was nurturing and educational with trained staff who supported the whole family.

Reassured in the knowledge that Olivia was in the hands of caring professionals guided by standards and regulations, I was able to go to school and focus on my studies rather than worry about my child care arrangements, as many parents do daily. As a parent I can't express enough what it meant to me to have trained and knowledgeable staff to talk to about any concerns or questions I had about Olivia's development and behaviours. They were a tremendous resource for my partner and I and they helped us to be better parents.

Without child care, I would not have been able to finish my studies and graduate with honours. I would not have been able to enter the workforce and become self-reliant. I would have had to have stayed home with Olivia, dependent upon the system, which I know is not what this government wants.

While still in school, the child care subsidy I received helped me to keep my head above water. Now that I have entered the workforce, I am a full-fee-paying parent who struggles with the high cost of child care. Despite struggling, this is the type of care I choose for my daughter, and I will continue to pay for what I value.

What parents need is affordable, accessible child care, not tax breaks. Parents need this government to invest in a provincial system of early learning and care services.

Ontario families are hearing more and more about the Quebec and BC provincial child care systems. It's time for the Ontario government to make that same commitment to its children and its families. The professionals have told you time and time again what early childhood education provides for in the early years. They've also reminded you of how it supports children in their later years. Please listen to those studies, but also listen to the parents. Despite needing to work to survive, raising my daughter is the most important job I will ever do. I'm asking you to support me and the other parents of this province to feel a little less burdened of the worry that we are good parents, that we are doing what is best for our children in helping them to reach their full potential.

Am I fortunate? Yes, I am. Do I feel privileged? Yes, I do, to have been so lucky to access this early childhood education for my daughter. But I strongly believe that early childhood education should be a right for all families and children. In our growing economy and the provincial budget surplus, it is no longer a matter of money; rather, a matter of political will. Please show us that you have that will in supporting Ontario families to be what they want to be.

Ms Yach: May I remind you that in 1999, the You Bet I Care federal study was the second national study to examine the relationship between staff wages and working conditions and quality child care. Both federal studies came to the same conclusion: while child care workers are the cornerstone of a quality system of child care in Canada, their needs for adequate wages and working conditions have largely been ignored, and that without focusing attention on those who care for a living, a system of quality child care in Canada cannot be realized.

Ms Bird: Thank you very much. Questions?

The Chair: We have approximately six minutes per caucus, and I'll start with the government side.

Mrs Tina R. Molinari (Thornhill): Thank you very much for your presentation. It's certainly nice to see the little ones here as well this morning. It adds to the impact of your presentation.

As a government, we certainly are concerned with the welfare of our children, and certainly they are our future. There have been a number of initiatives proposed in the last little while to support children. One of them is the early years challenge fund. I must put on the record that the government will invest up to $30 million annually to support communities in early learning initiatives.

You've made a number of recommendations in your presentation that certainly will be taken into consideration with all of the others that come forward.

As I said, a number of initiatives have come forth, and I don't know whether your group is aware of all of the new ones and is taking advantage of them. But since 1995, funding for child welfare, children's aid, has increased by 80%, to over $650 million, allowing children's aid societies to hire 1,000 new child protection workers; and the support to the Invest in Kids Foundation, which supports prevention and early intervention initiatives for high-risk children. Over 5,000 children and their families in eight communities benefit from the $5-million annual commitment to Better Beginnings, Better Futures prevention program. These are just a few of a number of initiatives that this government has taken and moved forward on.

Our Minister of Community and Social Services is in constant consultation with groups such as yourselves and others that put forth very valuable recommendations on how we can continue to improve with new initiatives for child care, and certainly regulated child care centres make families, and moms for the most part, feel comfortable leaving their children there and, as stated by one of the presenters, being able to study and be in school and not have to worry about the welfare of your child. So certainly a number of the recommendations you've made here are going to be taken into consideration.

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I sense your frustration in your opening comments about the number of times that you've made presentations to committees, but please don't be discouraged by the results that don't seem to be at times doing everything that you put forward, because as a government we're in the challenging position of having to balance all of the recommendations and all of the initiatives and needs from various communities and then make a decision on what works best for the final picture. It's difficult for us to make decisions that make everybody happy, but certainly as a philosophical view we are concerned and do what we feel is best to move in that direction, and presentations like yours certainly help turn the light on in a number of other areas that we might not have considered in the past and certainly will have to look at for the future.

Ms Bird: In response to that, 70% of children in this province and across the country require access to non-parental child care arrangements. When all of the studies are in that tell and demonstrate the need for a regulated, high-quality child care system, your government has cut more than $70 million from the regulated child care sector. Child care funding per child has decreased 15% since your government came to office. There does not seem to be a commitment to child care and the early years fund does not provide any monies for expansion of child care, for increased subsidies to parents. In fact, it's the opposite. There has been a real pulling away from regulated quality child care by this government and it's a real concern. Centres are struggling and barely surviving under your government in their attempts to provide good care, the kind of care that we know benefits children and supports families. Your government has done everything that moves away from that.

The Chair: With that, we've run out of time. The official opposition.

Mr Patten: Thank you for coming out this morning, Shellie and everyone else, and all the children.

Shellie, in response to your last comment, that's my impression. The government of the day did do one thing: it did launch the Early Years Study, which I think was a great study in pulling together a lot of research. I think it still is. It stands up today and it's certainly a cornerstone for action. They have taken a number of tiny initiatives in looking at possible models etc, but in facing the overall situation on child care support for children and families it they have not.

As you know, as former children's critic I have some knowledge about this and some interest in this area. When you talk about the Quebec model and the BC model, I know in the Quebec model this is something over time; this is not implemented in one year. We're not talking about $10 million, we're not talking about $30 million; we're talking a couple of hundred million dollars, of rearranging priorities that get at helping children and families to have the support they need in the interests of a long-term investment in the greatest resource that we have as a society, which is our human resource. Interestingly enough, when you talk to people in the sector that up until last week was the most dynamic sector-I'm just joking, of course-what people call euphemistically the high-tech sector, the single-greatest resource is our human resources. That means we must invest in our people, we must invest in our children.

Given that context, can you describe a little more, please, a more comprehensive system, not just throwing $5 million over here or a few dollars over here for a continual, perpetual pursuit of studies that seem to never go anywhere in a comprehensive manner.

Ms Bird: What we're looking at, and it's been put forward over the years, is the hub model, and it was also recommended in the Early Years Study about the parent centres. What we see it as is child care as the backbone to a comprehensive basket of services for children, with child care being the underlying thing upon which it rests.

The parenting centres that were proposed in this report are part of that, because we do recognize the need to support parents and children, and it is being done in Quebec, where families are being supported directly by the government. It is comprehensive, flexible licensed home care, group child care. It's to meet parents' needs, because we have a long way to go in creating flexibility within the system and ensuring that parents who work shift work, weekends and part-time have access to child care. That needs to be built into the system. Does that answer your question?

The Chair: We've run out of time. Mr Christopherson.

Mr David Christopherson (Hamilton West): Thank you very much for your presentation. I believe it's the second presentation we've heard.

It's almost a shame that you can't be with us for all the hearings, because there are quite a few groups that come in, especially on the business side, that are thrilled with this government. They spend the better part of 30 minutes singing their praises, telling them what a wonderful job they're doing, "Please keep cutting taxes; we're getting richer and richer and the world is getting better and better," yet every group that comes in that deals with anything other than just the bottom line starts to talk about, if not the devastation, certainly the deterioration of services-education, health care, environmental protection, child care, right across the board-so we can see who the winners are and who the losers are in Ontario, and it's a shame it has to be that way.

I'm glad you pointed out Quebec because, interestingly enough, Quebec was also pointed out to us by the Ontario Federation of Agriculture as being a province that supports their agriculture economy twice as strongly as the Ontario government does, and yet they also have this child care. The reason it's important to raise that is that right now it seems like this government puts forward what they consider to be the only alternative there is, that there's no other way to do business. Yet, there's Quebec with a strong, thriving economy putting resources into areas that need it, such as agriculture, and then they have cutting-edge, leading legislation in the area of child care. So I urge you to keep using that as an example because the government likes to say and pretend that those of us who would support these kinds of programs don't know anything about business, couldn't run the economy, and the only thing that really works is to follow the economic plan that they're following. We know differently. We know that's not the only way to approach an economy.

One of the things that wasn't raised too much here yet, and I understand why, and that's why I want to do it, is the whole issue of the wages that are being paid to early child care educators. If someone would just touch on that, because it's shocking when you think about the amount of education and experience and responsibility an individual has versus what they're being paid.

Ms Hightower: I'd just like to comment on the fact that we don't know how to deal with the bottom line. If you talk to a child care worker, they can tell you 365 different uses for an egg carton in child care. We are really, really good at budgeting and we've been dealing with shoestring budgets for a very long time.

I worked in a centre a number of years ago where I used my paycheque, the very minimal paycheque at that point as well, to buy supplies so the children had something to do every day. It wasn't because the owner of the child care centre didn't have a desire to provide the best quality program that she could; it was because the budget was so very minimal, and budgets still continue to be minimal. As an example, I'm just finished the process of doing my annual budget for this year and I haven't had a raise for my food costs since 1991. We are providing three healthy portions of food in the run of a day for $1.64 per child per day. That's not a lot of money.

I'm going to let Shellie talk to you about wages. She's a little better at that than I am.

Ms Bird: Across the province, child care workers have not been seeing wages increases. In the last study our wages were compared to parking lot attendants', and I think it really is indicative of a government that would leave people who provide a critical service in our community earning the same as somebody who watches a car. Even though we talk a lot about how we value children, how we value those who work with children, we don't show it. We have not had a wage increase in six years and we weren't making that high a wage to begin with.

It is near to impossible to draw people into the child care field any more because the wages are so low. You come out of college with a huge debt and you're earning minimum wage and slightly above. It is a real problem to ensure that children are being cared for by trained, knowledgeable staff when governments are not prepared to adequately compensate them. It's a huge problem, and it's a huge problem to keep highly qualified, caring people in the field.

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Ms Yach: Can I just add one comment? You were talking about businesses, and I think all the different parties need to think about the issue of shift work. All of us here in Ottawa know of Nortel and JDS. They have shifts that run from 7 to 3 and 3 to 11, and they need adequate care during those shift hours. I think that's one thing the government has not looked at. We need funding for that. We need to have a cook over the supper hour, we need to have someone to follow through, and we need to come to terms with the money we need for that. So when you've finished your studies here, I hope you will consider the issue of high-tech and the need for shift work.

Mr Christopherson: I would come back to "unregulated." I think there are a lot of individuals, possibly members of the Legislature, who don't truly understand the difference between regulated and unregulated. If in the business world you start talking about regulation, they have nightmare visions of all kinds of red tape and hoops and bureaucrats and paperwork etc. In this case we're talking about the difference between an enforceable, monitorable, if that's a word, set of standards that guide how the children are to be cared for. When we get into unregulated, we're talking about grandma and grandpa, which normally isn't a worry for someone, and even if it's a sister-in-law, brother-in-law, things like that, there isn't that much worry, although that can be a problem. But it could be just somebody down the street, and someone who is desperate will take whatever they can, and if they believe their child is taken care of the best they can possibly do, they can go off and earn enough money to at least put food on the table.

Personally-and I'd like your thoughts on this, if you can-I fear and dread the day that a child dies in an unregulated child care setting and then all of this comes tumbling out in a coroner's inquest. At some point we will reverse the trend, but you have to ask yourself how many innocent young children have to be hurt or perhaps die before we get the message that unregulated versus regulated can often mean the difference between life and death.

Ms Bird: I guess what we need to really look at when we're talking about this issue is that there is good unregulated care out there; there is bad unregulated care out there. If this government wants to put money out into the regulated sector, which is a growing trend of the provincial government, I think it behooves them to ensure that the taxpayer money is going to buy regulated child care instead of care of unknown quality. It is criminal to just throw money out into the community in the name of children with no regulation, no accountability. It's not good for children and it is not accountable to taxpayers to just throw money out into the unregulated sector.

That is what this government is choosing to do with child care: throw it out into the unregulated sector, give parents a little bit of a tax break through the Ontario child tax benefit, which I think is a maximum of $1,100 a year, which is not enough to buy child care. So parents are left scrambling and having to live with whatever they can find out there. This government is very irresponsible in seeing that as a way of dealing with our child care needs. It really lacks vision.

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

OTTAWA-CARLETON DISTRICT SCHOOL BOARD

The Chair: Our next presentation is from the Ottawa-Carleton District School Board. Could you please come forward and state your name for the record. On behalf of the committee, welcome.

Mr Jim Libbey: Thank you, Mr Chair. I'm Jim Libbey, chair of the Ottawa-Carleton District School Board.

Mr Jim Grieve: I'm Jim Grieve. I'm the director of education for the Ottawa-Carleton District School Board.

Mr Libbey: Mr Chair, members of the committee, ladies and gentlemen, on behalf of our 80,000 students, we very much appreciate this opportunity to explore with you the funding issues facing Ontario school boards.

I would like to start by acknowledging the improvements the government has made to various aspects of public education. These include a new curriculum, the Education Quality and Accountability Office and the strengthening of school councils, to name just three. The recent creation of the Task Force on Effective Schools confirms the government's commitment to continuous improvement in public education.

My approach this morning will be to review briefly the recent history of education finances in Ontario to establish the context within which the current serious underfunding of public education in Ontario can be understood. I will then outline some of the more significant financial challenges that school boards face by analyzing specific shortcomings in the funding formula.

You will notice two important things. First, the issues raised pervade the funding formula; it is not that just one or two errors need to be corrected. This is not surprising, given the real underlying issue: the government has significantly reduced the total funding allocated to elementary and secondary school operations. Second, all Ontario school boards face the issues raised in our brief. You will hear this from others as you tour the province. The severity of a problem will vary from board to board. Our board is more challenged than most in areas such as special education, English as a second language, French as a second language, transportation, and new school construction.

So what is the historical context? In simple terms, there were two critical events. The first was the decision to ensure fair and non-discriminatory funding to all Ontario school boards, regardless of their tax assessment base. This decision was widely applauded, even by us, although it cost our board some $50 million in grants.

Second, the government significantly reduced operating funds for elementary and secondary education in Ontario. This cost our board an additional $35 million, approximately. Although some of that original cut has since been restored, province-wide operating funds continue to be significantly below their 1997 level of $13.7 billion. Excluding phase-in funding and capital grants, student-focused funding for the current school year is projected to be some $12.4 billion. That is a reduction of about $1.3 billion, or 9.5%, not taking into account inflation. It is little wonder that the Ministry of Education is having great difficulty developing a sound funding formula when there is so little money available to them for school board operations.

The issues related to new school construction are complex and seem to differ from board to board. The government has arranged a significant amount of investment in new pupil places for some rapidly growing boards. However, as I will describe, the rigidity of the formula has prevented us from building some desperately needed new schools.

How much to invest in education as compared to health, social services, infrastructure, lower taxes and so on is, I suggest, the essential public policy question for your committee. We have been very encouraged in recent months by the clear evidence that has emerged in favour of investing in education. Business leaders in Ottawa and our municipal politicians have rallied to the cause of education.

This afternoon, you will hear a presentation by the Ottawa Economic Development Corp that will explain why they have ranked education as the number one priority for our community. A new study sponsored by the Canadian Advanced Technology Association reports that Canadians rate education as the top issue for high-tech leaders to promote. Why? Simply put, competent, skilled citizens are essential to our long-term prosperity.

We have four recommendations for the committee.

First: that funding for elementary and secondary school board operations in Ontario be significantly increased by an amount that reflects the issues raised in this and other presentations, and more generally to reflect the real costs that must be incurred to provide high-quality education.

Second: that the Ministry of Education amend the general legislative grants regulation so that the increased funding is allocated to Ontario school boards to meet both the needs that are common to all boards and the unique needs of certain boards.

Third: that the Ministry of Education implement a zone model for determining the allocation of grants for new pupil places and new schools.

Fourth: that the 2003 review of the funding formula required by the Education Act commence immediately and include extensive consultation.

The rest of my presentation will focus on the implications of inadequate funding for the Ottawa-Carleton District School Board alone.

Since amalgamation on January 1, 1998, we have worked hard to live within the financial parameters established by the province. We have been, and will continue to be, creative and active in tapping new sources of revenue and operational efficiencies to accommodate the formula. For example, upon amalgamation we reduced our administrative and plant costs to be within the formula requirements immediately. We have maintained extremely restrictive transportation policies. We have undertaken vigorous energy management programs. We are establishing a charitable foundation to encourage philanthropic support for public education in the nation's capital. We use value-for-money audits to identify improvements in business practices. We have forged significant partnerships in the corporate community for services, equipment and learning experiences.

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To date our funding and our budget have been reduced by $61 million from pre-amalgamation levels. We are within all non-instructional grant envelopes and have cut significantly into instructional costs, including special education and English as a second language. Any further cuts can only come from direct spending on students in the classroom, which we believe to be contrary to the intentions of the government.

Dollar amounts in this brief are rough estimates based on the general legislative grants, excluding mitigation grants, approved for our board for the current year, which total approximately $480 million. This amount includes no provision for new capital projects.

It is important to appreciate that we are not requesting an extended mitigation grant. Mitigation grants were intended to temporarily assist boards with the transition to the new funding formula. We require fundamental and permanent changes to the funding formula itself.

The needs for increased funding described in this brief are no wish list. They represent the minimum required to maintain public education in Ottawa at a reasonable standard. Other program areas that should be enhanced as part of the review of the funding formula include library services, guidance, school support staff, supervision of students and classroom assistants.

You have before you, attached to your document, two tables that summarize the shortfalls we face if the investment in education is not increased. First, let's look at some of the challenges related to our operating budgets.

Salaries and benefits funding gap: Teachers and other staff in schools are covered by collective agreements which dictate how much they must be paid. However, the current funding formula, the only source of funding for these mandatory costs, is based on proxy salaries and benefits per person that are significantly less than what we and other Ontario boards must pay. For example, educational assistants cost us $34,000; the funding formula provides only $26,000. This gap has existed since amalgamation and increases with each contract settlement. To date, mitigation grants have helped to cover this gap. They are set to expire this year.

Our staff recently presented an analysis to the Ministry of Education that indicates a shortfall in funding for salaries and benefits of approximately $12.8 million.

Staffing for special education: The level of service we can provide to our special-needs students with fewer staff under the funding formula is unacceptable. Under the watchful eye of our highly competent and experienced special education advisory committee, or SEAC, we have attempted to implement a new delivery model that puts more emphasis on integrating special-needs students into regular classrooms. But students' needs are not being met. In fact, less than two weeks ago, SEAC unanimously endorsed a response to a staff report on a review of special education. The SEAC report included the following paragraph:

"The special education advisory committee of the OCDSB believes that the time has come to acknowledge the problems we are facing, to acknowledge that too many children are slipping between the widening cracks created by inadequate special education resources and to identify what resources are absolutely necessary if all of our students are to be successful."

These issues are very complex. We need clear provincial standards for special education program delivery. We need a common understanding of the costs of special education services. We need a funding formula that can be administered successfully and efficiently. We must be able to differentiate the requirements of one board compared to another.

What is clear is that success in special education does not benefit just our special-needs students; rather, it benefits all students and it contributes to the prosperity of the province.

Assuming the salary gap is corrected, our preliminary estimate is that special education is underfunded by approximately $4.7 million.

English as a second language: Like Toronto, but unlike most of the rest of the province, Ottawa has a significant and growing multicultural population with high needs for English as a second language. These needs increase each year, as the city experiences the fastest growth of any urban area in the country and one of the fastest growth rates in North America.

It is critical to the economies of both Ottawa and Ontario, and it is in keeping with the province's own policy of equal access to quality education, that our ESL students be allowed to achieve their personal best on a level playing field. More than 12% of our enrolment, or 9,700 students, need ESL instruction. The provincial government provides program funding for only 30% of those students. Our ESL students, and therefore our community, are being shortchanged. We estimate that ESL is underfunded by $3 million.

French as a second language: More than any other city in Ontario, Ottawa has a major responsibility to provide French-as-a-second-language training to all its students. The unique character of our city is reflected in job requirements for bilingualism demanded by employers in the service and retail sectors, public institutions, and of course the federal government. To help meet this requirement, our board begins core French in senior kindergarten rather than in grade 4, as dictated by the funding formula. The formula approach is insufficient for our nation's capital. The needs of our board exceed those of other boards in Ontario in this respect. We estimate that French-as-a-second-language programs are underfunded by $3.8 million.

Occasional teachers: The budget for occasional teachers is rising, due primarily to the increased workload of secondary teachers who, under the province's new mandatory teaching times, are no longer available for as much on-call and supervisory duty. This affects both student achievement and safety in our schools. We need an increase of $4 million to cover our actual occasional-teacher costs.

Supplies and materials: The simple but unavoidable fact is that textbooks and school supplies are lacking in many schools. At the same time, more and more student fees are being charged and families are being asked to buy more of their children's school supplies. Parents are becoming openly impatient and resentful that the wealthiest province imposes what amounts to extra taxes to furnish basic classroom materials such as textbooks, pencils and paper. We estimate that to provide essential classroom materials, $3 million must be added to our funding for supplies and materials.

Transportation: Our two predecessor boards operated very efficient transportation systems. We have been essentially frozen at those super-efficient levels, while others, including our coterminous English Catholic board, have been frozen at far more generous levels of funding. So it's not surprising that the Catholic board is reluctant to participate with us in arriving at transportation solutions. As a result, fewer of our students are entitled to transportation and many must walk much further to their bus stops and suffer the impacts of triple and in some cases quadruple busing, including irregular opening and closing hours for their schools. In addition to the adverse impacts on achievement, this puts our public board at a significant competitive disadvantage.

Despite three years of work, a new funding formula has not yet been developed for transportation. To bring our funding to the same level as that of our coterminous English Catholic board on the basis of cost per student transported would require some $6 million. As an interim measure until a new formula is in place, to begin to level the playing field in Ottawa we need $5 million additional funding for transportation. We ask that a fair funding formula for transportation be developed as soon as possible.

Rising heating costs: The significant world-wide rise in fuel costs has predictably had a major impact on our heating costs. We have already overspent our budget. We estimate that $2.5 million is required to close this gap, and we recommend that the government study ways of protecting the budgets of school boards and other provincial institutions from the vagaries of energy price fluctuations.

School maintenance and operations: Despite improvements in funding in this area, we cannot maintain our buildings to current industry standards. Each year that we fall short on our spending in this area, the maintenance expenses for future years increase, thereby compounding the problem. We estimate that to maintain our schools in reasonable condition, an increase of $4.6 million in our maintenance funding is required.

School councils: There is no specific funding in the formula for school councils, despite the agreed importance of these groups. We suggest that the government further emphasize their importance by including $500 per school, an amount of about $75,000.

Before I turn to table 2, "Capital and One-Time Expenses," I must comment on the burning issue of extracurricular activities. The OCDSB opposed the roughly 10% increase in secondary teacher workload that was introduced last summer. The impact has included serious reductions in areas such as valued extracurricular activities, on-call availability and hallway, lunchroom and other supervision time. Consequences include cost increases elsewhere, such as the occasional-teacher budget.

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We believe this committee should recommend that the government reopen Bill 74 in order to reassess teacher workloads. To add 10% to our teaching capacity at the secondary level would cost about $11.3 million in the OCDSB, some of which would be offset as other costs, such as occasional teachers, decline. And there will be a significant cost offset, of course, once four-year secondary school is fully implemented.

New school construction: Capital funding for new school construction is available only after the board achieves 100% capacity utilization across the district.

We have made major efforts to rationalize space and close schools over the last three years but, due largely to the complexities of our downtown school infrastructure and our need to retain flexibility to respond to ministry policy changes and to community needs, we have had limited success. Already the ministry has mandated class size reductions that have added to space requirements. Other needs that could result in policy changes include access to computer labs and family studies rooms for grades 7 and 8, appropriate child care facilities for seamless school days and standard gyms for every school.

Our immediate requirement is for four elementary schools in the growing suburbs. As we have regularly discussed with the ministry, the formula should recognize the geographic diversity of school districts and adopt a zone model, which in our case would provide approximately $40 million for land acquisition and construction costs for four elementary schools.

The backlog in school renewal: School renewal funding covers replacements of things like heating systems and roofs, and the expansion of facilities. Like maintenance costs, renewal costs that are deferred tend to compound, but at a much greater rate. Staff has estimated the current renewal backlog at $280 million. What is encouraging is that boards across Ontario are working hard to size up this problem.

It is important to know that the backlogs of maintenance and renewal were not created in the last few years. In fact, they have accumulated over decades of neglect of our facilities by Ontario governments and school boards. All too often, when finances get tight, we collectively tend to compromise spending in this area. This strategy is more expensive in the long run. It is time to make amends.

Moreover, according to the Little Red School House, a study of this phenomenon carried out by Ontario supervisory officers in 1991, the achievement of our students can be adversely affected by as much as 10% when they are housed in substandard accommodations. Our staff estimates that we can bring our facilities up to industry standards within 25 years if we add an additional $24 million per year to our facility renewal funding.

Enterprise-wide information system: Ontario boards need modern financial, procurement, asset management, student information, human resource management, geographic information, and other computing systems. A major reason for these comprehensive systems is the increased data collection and reporting requirements mandated by the province. The one-time investment required for an enterprise-wide information system is estimated to be $10 million.

As you can see, the problems identified do pervade the funding formula. The Ottawa-Carleton District School Board alone requires additional ongoing operating funding of approximately $44 million just to maintain reasonable standards. And we need to build new schools, we need to begin to deal with the renewal backlog in older schools and we need to implement modern information systems.

Please take our four recommendations very seriously, in the interests of student achievement and the long-term prosperity of the province of Ontario. As a starting point, an increase of about $1 billion in funding for elementary and secondary education seems not only appropriate but in fact essential.

Thank you, Mr Chair. We're open for questions.

The Chair: We have three minutes per caucus. I'll start with the official opposition.

Mr Patten: Thank you very much. It's not much time. I'm quite familiar with the extent of the challenges that you've faced. You begin behind the eight ball because, as you describe, in an attempt for the province to try to equalize payments all around the board, your board was faced with $60-million-plus to cut back over a period of time. Given that, some of the formulas provide grave challenges. I would say that the flavour, by the way-I know the challenges of this board, quite intimately so, for my committee colleagues-is criminal in many ways. The challenges and the impact on special education and the attempt to shoehorn in, the lack of provincial standards, the lack of support for a board that has a history, I would say, of being recognized worldwide for its contribution to special education-not only in Canada but visitations from places around the world-is absolutely astounding. It is now threatened, and that's an absolute shame.

The dedication of the staff of the board, the teachers, is just unbelievable. The morale is extremely poor. It's not the only board suffering from this. I'm saying this in support of your particular plea. I commend you on your ability to intellectually rationalize and present something without emotion, because I know that a great deal of work has gone into this. The hours and hours of time that this board has spent-and some of those have gone into the wee hours of the morning, and I've been there at certain periods of time-is just unbelievable.

But I will ask you one thing: you've got about six or seven areas here, all of which are important. Would you identify, as you see it, one or two priorities that you think-because I don't think you're going to be able to get the kind of support you're identifying here-the board would absolutely need to begin to move forward to maintain the quality that you see? What would you say those would be?

Mr Libbey: As I've mentioned, the problems are pervasive throughout the funding formula. I think they're driven because the ministry doesn't have enough money to pay the school boards what they need and so they take a little here, a little there, a little bit everywhere. That's why they are pervasive and I think they need to be addressed in that manner. A lot of money needs to be put in and then the formula thought through piece by piece. Obviously we need to be able to pay our teachers, and if there's $12.8 million that we just can't pay under the contracts that we owe, that has to be fixed. It's very simple.

I think special education would probably be my second, and English as a second language, because these are programs that are desperately needed. These children need a level playing field, they need to be able to achieve their personal bests, and if they can, that augers well for the entire school system and for the province, all the students.

The issue of our school infrastructure, not being able to build new schools and a huge backlog of renewal costs desperately needs to be addressed. That is not a problem that this government or any other individual government has created, but it is a problem that faces us now. Certainly one of the good things that is happening as a result of the focus that the government has brought to these various individual areas is that we were looking very hard at them and we are beginning to understand very well the circumstances that we're in.

Jim, would you like to add anything to that?

Mr Grieve: Just very briefly, I would concur with my chair that the issue facing us at this point, if we're required to really prioritize some of this list, would fall in the areas of salaries and benefits, certainly in special ed and most definitely in supporting our growing and wonderful ESL population.

But I would tack on the issue of capital. We need to house our students in facilities that are adequate to the learning needs, and we're simply finding that we're falling further and further behind. The $280-million estimate-and this isn't just a ballpark, this is based on a very rigorous appraisal of every school building we have and is being replicated right across the province now by almost all boards-unaddressed, will grow in Ottawa-Carleton to an $800-million backlog within a very few short years.

The Chair: Thank you very much. Mr Christopherson.

Mr Christopherson: Thank you for your presentation.

You know the government talks a good game about strategic investments, and, again, they'll do it when we get into the finite details of tax legislation, but for the life of me I can't think of anything more strategic in terms of an investment for our economic well-being in the future, as well as the kids themselves and their life that's ahead.

At some point, again, the government should be recognizing the fact that we've got elected trustees onside, saying something needs to be done with the funding formula. Senior management staff in virtually every board that I've ever talked to feel exactly same way. The teachers feel that way. The support staff feel that way. The parents feel that way. The kids feel that way. There's nobody left.

The only ones who don't seem to think we need to make a change are the people who have the power to do it, and why? They're addicted to tax cuts, because it works for them politically.

I want to comment that when I listened to you outlining the challenges facing Ottawa-Carleton, they sounded very similar to what we have in Hamilton, especially in terms of English as a second language, the older neighbourhood schools being closed, the backlog on repairs and not enough staff. If you take a look at a lot of the older communities across Ontario, our challenges are similar.

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Right now in Hamilton the flavour of the day, in terms of the ongoing crisis around lack of education funding, is inner city school closures, usually smaller schools where we're not up to 100% capacity and you have to close those to justify getting money for the expanding areas. I wonder how your board is viewing the damage that is done to neighbourhoods through the loss of a school that often is the entire focal point, not just the focal point of education but of social interaction and, as well, sometimes the only green space available in a built-up inner city area. Can you give me a sense of how that is playing out here in Ottawa-Carleton?

Mr Libbey: Indeed, we've worked very hard, over three years, on the question of school closures and rationalization. We don't disagree at all that we have to be very efficient in the utilization of our space. We have closed some schools; we have put some schools up for disposal.

Perhaps the telling response to the question is that the last board, back in October, I believe, did agree to close six schools. But subject to looking at some demographic data, which was still in preparation by the municipality, it was left to the new board after the election to finalize that decision. Many of you probably are aware that the new board-it was probably one of the most, let me call it, interesting municipal and school board elections in a long time. In fact five new trustees were elected, and the community was very much saying to us, "You can't go around closing these downtown schools in order to build them outside the greenbelt. It doesn't make sense." Moreover, municipal politicians came to us and said, "Don't do this. It's our community. We need to keep our community intact," getting at the issue of what it means to take a school out of a neighbourhood.

Moreover, the business community rallied behind us and were very insistent. They said, "We need excellent education if we are to attract people to Ottawa." They said that to disrupt the downtown schools too much is to say (a) we don't care too much about education and (b) we're not going to have the infrastructure available, when people do come, for the ones who want to live downtown. We still have a lot of analysis to go on the downtown situation, but basically we opened five of those six schools and retained them until we can do a better job of figuring out where we should go with it. That's the feeling.

Mr John O'Toole (Durham): Thank you very much for your presentation this morning. I know the plight of school boards with some insight. I was a trustee for a couple of terms. You were praising the Ottawa-Carleton board, which I would as well. I just looked at the briefing note here. You are doing some partnering and some inventive, creative things, and I commend you for that.

I represent the area with the Durham Board of Education, the winner of the Bertelsmann award, an international award. I guess the argument starts there. I remember the issues were the same when I was a trustee around 1985-exactly the same issues; nothing has changed. We felt we were the lowest-funded board in Ontario, yet we were the top, internationally recognized board. It was recognized-and I hope I don't sound like I'm lecturing, but there was such a disparity. In 1994-95, clearly one of the issues was the disparity of funding in public education, based on assessment wealth, pure and simple. In fact, in the Royal Commission on Learning report, For the Love of Learning, the 164 recommendations made it very clear that in public education each child should be treated equitably. So the foundation, the formula for what we're trying to do, would be to have affordable, accessible, quality education.

You did-and I commend you-in your introduction commend the government. In fact, it isn't the government. It's the initiation of the government to implement some of the royal commission findings: the new curriculum you talked about, the external efforts relentlessly in each budget, including the last one, to reduce class size.

Jim, I'm going to have to take your basic premise to task. The numbers I'm looking at are absolutely, indisputably-your numbers are false. I'm looking at the macro view; I'm not looking at Ottawa. The Ministry of Education funding year over year, and I'll give you the numbers: basically starting in 1994 it was $13.9 billion; in 1999-2000 it was $14.2 billion; and projected to 2002, $14.7 billion. At the macro level for the province of Ontario, I'd like you to concede that we are spending more money equitably across the province.

This creates a problem. It clearly creates a problem. In fact, in Toronto just a week or so ago they had a settlement for 8%, and the province really funded additional funding for wage settlement at around 2%. They settled I think for 8%, though I'm not sure it's been ratified yet. That money traditionally is going to come from the buildings that are in disrepair, it's going to come from maintenance, it's going to come from school textbooks; it's going to come from everything.

Your top three requests, your top three wish list items were as follows: salary and benefits, $12.8 million.

The Chair: I have to ask you to put your questions, Mr O'Toole, please.

Mr O'Toole: I'll have a question here.

The next one was staffing for special education, $4.7 million; occasional teachers, which means time off, $4 million. Until we recognize that the student is the focus of the whole system, not other stakeholder groups, we've got the wrong message.

My question here is, do you now provide extracurricular activities? Have you settled your contract, and for how much?

Mr Libbey: We provide some extracurricular activities in the secondary level. They have been provided primarily by volunteers because we have put in place a volunteer policy that enables us to do that reasonably well. I'll ask director Grieve in a moment what per cent we're at across the board, if we can remember that per cent. We're reasonably proud of it, but we're still well short of what we want to be at. Not only that, but the approach we have in place right now is relatively unsustainable, in our view. We have settled with the secondary teachers. Jim, I'll ask you for that.

Mr Grieve: We're in negotiations.

Mr Libbey: We're in negotiations with the elementary teachers. But the settlement with the secondary was four point something.

The Chair: With that, I must bring the discussion to an end as we've run out of time. On behalf of the committee, thank you very much for your presentation this morning.

CANADIAN TAXPAYERS FEDERATION

The Chair: Our next presentation this morning is from the Canadian Taxpayers Federation. I would ask the presenters to come forward and state your names for the record, please. On behalf of the committee, welcome.

Mr Walter Robinson: Thank you, Chairman Beaubien. My name is Walter Robinson and I appear before you today in my capacity as federal director of the Canadian Taxpayers Federation. Seated beside me is Mr Bruce Winchester, our director of research.

Ma présentation ce matin sera en anglais seulement, mais à la fin, si vous avez des questions en français ou en anglais, je vais essayer de vous répondre dans la langue de votre choix.

By way of background, the Canadian Taxpayers Federation was founded in 1990 and has grown in 11 short years to become Canada's largest and most effective taxpayer advocacy organization. We are non-partisan and not-for-profit. We do not receive any federal or provincial political contributions, nor do we receive financial assistance from any level of government. During employment with the CTF, all directors and staff are forbidden to hold memberships in any and all political parties.

Our mandate is threefold: we act as a watchdog on government spending; we encourage our supporters to exercise their own democratic rights and responsibilities, thereby taking ownership of public policy; and we advocate fiscal and democratic reforms through presentations to legislative committees such as yours this morning.

The focus of our pre-budget submission, copies of which are in front of you, I believe, is to drive home the message that an unwavering fiscal focus can and will ensure a formative future for Ontario.

We wish to congratulate the government for acting on two of our recommendations from last year: eliminating provincial bracket creep and moving to a tax-on-income system. To be fair, we also acknowledge the small steps the government has taken with respect to reducing our provincial debt.

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While last year's fiscal indicators, as outlined on page 5 of our pre-budget submission, signal robust economic performance, extreme caution and prudence must underlie the articulation of Ontario's fiscal plan in budget 2001; or in simpler terms, that was then and this is now. Today, the clouds of economic uncertainty cast a long shadow over our province. The US Federal Reserve Board has dropped its trend-setting interest rate by 100 basis points in four weeks. In addition, board chairman Alan Greenspan has signaled that further interest rate cuts may be necessary to mitigate against what he calls downside risk.

Major multinationals such as Whirlpool Corp and auto giant DaimlerChrysler have announced significant workforce reductions in the last month, and just last week, as you know, Canadian-based optical networking behemoth Nortel signaled its intention to up its global layoff tally from 6,000 to 10,000 workers.

To complicate matters, unlike Ottawa, the Ontario government does not have the option of specific monetary policy changes to mitigate against recessionary pressures, and it is monetary policy which is the most effective tool in a recessionary environment.

Inflationary pressures are also present. Ontario's inflation rate as measured by the CPI was 2.9% for last year, and recent surges in oil and commodity prices signal that this trend will continue for most of 2001. Talk about sobering news for a Monday morning.

Economists are split as to their interpretation of the gravity of all these signals. Some fear a deep and prolonged, at least nine months or more, US-led global recession. Others are more upbeat, choosing instead to label the present economic environment as nothing more than a surplus-inventory six-month correction cycle.

One thing is for sure: such uncertainty necessitates fiscal prudence. Unfortunately the government of Ontario has not exhibited this prudence. Indeed, since 1995, the Harris government has steadily abandoned many of its fiscal principles that were first articulated in the Common Sense Revolution. From privatization to expenditure control to redefining the role of government, the party of the revolution, we believe, has become the party of the institution.

Let me be very clear in this. At mid-term, through its second mandate, we believe the PC government is bereft of fiscal vision. However, implementation of our recommendations would provide a foundation for the government to once again articulate a compelling and sustainable fiscal vision.

To start, the government must get serious about reducing Ontario's $112-billion debt. We can cut tomorrow's taxes by reducing debt today. Indeed the provincial debt, which all parties-the Liberals, the NDP and the PCs-had a hand in creating, represents a burden of intergenerational tax evasion that we should not and cannot pass on to future generations of taxpayers.

Each taxpayer in Ontario today is responsible for $21,000 worth of debt. Worse still, debt interest costs alone today are $1 billion higher than they were when the current government assumed office in 1995. At $9.4 billion a year, debt interest payments chew up 14.7 cents of every tax dollar that you and I send to Queen's Park. That's over $25 million a day, over $1 million per hour, $18,000 a minute and a whopping $299.02 for each and every second.

For budget 2001, we recommend a legislated schedule of annual debt reduction payments of 4% of gross provincial revenues. If revenue growth were to continue at 3% per annum, applying 4% of revenues would result in Ontario becoming debt-free by the year 2028. This analysis is found on page 10 of our submission.

Ontario is competing for jobs and investment with the Great Lakes states and provinces such as Alberta. When it comes to debt reduction, we should remember that our American friends are projected to be debt-free between 2012 and 2015, depending on the magnitude of the tax cut President Bush can push through Congress. Meanwhile, Alberta is projected to be debt-free next year, or by 2003 at the latest. Reducing debt is not only the right thing to do for future generations, there are also more pressing and immediate competitive and political dynamics that make this priority number one for this year's budget.

Hot on the heels of debt reduction, spending controls rank a close second for policy inclusion in the budget later this May. Nowhere is this more evident than in the unsustainable trend of Ontario's skyrocketing health care expenditures. To be fair, we acknowledge the tremendous pressures that CHST cuts at the federal level have exacerbated and that mammoth public expectations are political facts of life when it comes to health care funding. In fact, 62% of all new or increased spending in Canada's 10 provinces over the past three years has gone to one file and one file alone: health care.

Simply throwing more money at the problem is not the answer. In this respect you're no different than the federal Liberals or the BC NDP in your irresponsible and reckless spending approach to health care. Ontario's health care budget has increased at an average rate of 5.92% over the past three years. If this trend continues and we were to use the same revenue growth rate of 3% a year as we did in our earlier example for debt reduction, then by the year 2038 Ontario will require only two ministries: finance to collect the money and health to spend it, period. Full stop. This is illustrated on page 12 of our submission and it bears repeating.

Health care is poised to consume the entire provincial budget in 37 years. By 2015 alone, health-related spending will consume 50% of the provincial budget. Provincial politicians will be forced to make either/or choices. They, or should I say you, will be forced to choose between health care and education, between hospital beds or textbooks. You will then long for the good old days of the late 1990s and early 21st century with their simple trade-off debate between tax cuts and spending.

While health care is the most troubling example, the message is relevant for all provincial portfolios, and in this regard the government is to be chastised for misleading Ontarians in successive budget documents. For example, on page 47 of Budget 2000, the government maintains its "commitment to controlling spending is demonstrated by significant reductions in program spending as a per cent of Ontario's gross domestic product." There's a nice little graph here and the line continues to go down and everything is supposed to be rosy. This is utter and absolute nonsense.

If the provincial GDP were to grow by 10% a year and program spending climbed a whopping 9%, spending when measured as a percentage of GDP year over year would still decrease. The graph would go down. But no sane individual would claim that a 9% spending increase in a low-inflation environment is the mark of a fiscally prudent government. This measure also negates the amount of revenues that the government will or will not collect.

On the health care front Ontario needs a plan, any sort of plan, and quickly. Demographic shifts, technology and pharmaceutical costs will skyrocket and patient utilization pressures will further exacerbate demands for continuing increases to the health budget envelope. Outcomes analysis, restructuring health care governance, primary care reform and other initiatives are necessary and long overdue. Ontario should also push for modernization with its provincial partners of the Canada Health Act to include the principles of choice, sustainability, quality and accountability as principles for the Canada Health Act. They don't exist there now.

As for overall spending, we recommend that the government seek first to meet the needs of increased priority program expenditures through reallocation within existing budget envelopes. Further to this principle, we believe that total annual program expenditure growth should not exceed the upper-limit benchmark, a percentage of annual inflation plus population growth.

Turning to tax reform, allow me to reiterate the CTF's support for Ontario's move to a tax-on-income system. However, this move has been somewhat confusing for Ontario taxpayers wishing to keep track of the government's tax cut promises, especially the pledge to reduce income taxes by a further 20% on top of the 30% which occurred in the first mandate. In light of recent substantive federal tax cuts, taxpayers can be forgiven for wondering if they would be better off under the old provincial tax payable on federal tax system. Our summary calculations, found on page 14 of our submission, indicate that this is indeed the case. Federal tax cuts have been clawed back by higher than necessary provincial rates, and it will be the case for the 2001 taxation year unless new and lower rates are announced.

Along with lowering these rates to the appropriate levels, the government should indicate through various income-earner profile examples in its budget that Ontarians are equal to or better off in the made-for-Ontario tax environment as opposed to the old tax-on-tax system.

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We once again call for the appointment of a minister of privatization with cross-departmental responsibility to take a look at how you can continually evolve and devolve government services. However, since this is unlikely, we also recommend that an all-party legislative committee be established once during each session to review all relevant government operations and highlight candidates for divestiture and/or alternative service delivery. Finally, we recommend that the Ontario government cut provincial gas taxes to a level commensurate with roadway and public transportation spending, which has reached a 50-year low, even when SuperBuild initiatives are included.

Budget 2001 poses significant challenges for fiscal management in Ontario. Minister Flaherty must temper public expectations for devotion of anticipated surpluses of over-taxation into areas of program spending with a more long-term view to tackling the systemic problems of an intolerable provincial debt burden and runaway program expenditures. Whether it is raising a child, building a business or managing your own portfolio, in all these endeavours of life taking a long-term view is without question always the wisest and most successful strategy. It should be no different for the government of Ontario and its choices for this year's budget. Adoption of our recommendations for a fiscal focus can and will ensure a formative future for all Ontarians.

Merci pour votre attention ce matin. J'attends avec impatience vos questions.

The Vice-Chair (Mr Doug Galt): Thank you very much for a very detailed presentation to the task force. We have about four minutes per caucus. We'll start with Mr Christopherson.

Mr Christopherson: Welcome, Walter; good to see you again. To start on a positive note-I've got two, actually, so things are getting better as the years click by.

Mr Robinson: Save them for next year, Mr Christopherson.

Mr Christopherson: Let's stay optimistic and hopefully we can work toward three next year.

First of all, I love your tone. It's great, exactly the sort of approach that should be taken with this government, whether you're attacking it from the right or the left. The issue of the bracket creep: you and I spent a fair bit of time last year talking about that during your presentation. We agreed that it was a good thing. The government did it. I said it was a good thing. I think it's good for the people of Ontario when, sort of, right meets left and you agree fiscally on a direction that should be taken. It's a good litmus test, in my opinion.

Now, having said that, two issues: on page 5, you say-and you spend a lot of time on health care, you make your projections and your arguments-"On the health care front, Ontario needs a plan, any sort of plan, and quickly." I just wanted to point out to you that one could say that you could spend an even longer period of time making the argument about all the problems that exist in the health care system, but then to me it looks like almost a throwaway to say, "Ontario needs a plan." At the end of the day, that sort of is everything. The arguments really don't matter much then when you've determined you have to do something, again regardless of your philosophical approach. So to just say "needs a plan" is not really as helpful as I know-and I mean this sincerely-that you want to be in terms of the comments that you make. I don't have a lot of time, so I'll just link up my questions and you can deal with whichever you prefer. So I'm wondering what direction: do you have some thoughts? If it is privatization, let's hear that and let's have that debate.

The other one is on cutting the gas tax. I don't think anyone would argue that in an ideal world we'd like to have the amount of money spent on roads, bridges, transportation to be commensurate with what we collect. However, given the way that the consolidated revenue fund works in the province of Ontario, which is not different from any other government, if you take that much money-and I suspect we're talking hundreds of millions, if not billions, of dollars-out of the revenue equation, then either we borrow the money, cut services or raise taxes somewhere else in order to offset that. I wondered how you saw that being dealt with. So those two areas, Walter.

Mr Robinson: Thank you for the questions. I'm glad we do find points of agreement across the political spectrum. It's more like a circle as opposed to a spectrum sometimes.

With respect to the very valid point in terms of "Ontario needs a plan," at the moment the Canadian Taxpayers Federation is preparing a national discussion paper for release this May or June. It'll be the most ambitious thing we've ever done on health care, over 100 pages. We have freedom-of-information requests into every province and territorial government, plus the federal government, for waiting list estimates, for issues such as how many patients we're sending south of the border for health care, what our workers' compensation boards are doing, and also discussing the philosophical issues around health care.

I would caution you, if I may, with respect, Mr Christopherson, that just to say, "Is the plan privatization?"-no, that is a sterile debate in health care, that it's either our system or it's the evil American system, negating the fact that there are some 85 industrialized countries on the face of the planet, many of them social-democratic-governed countries, which employ a blend of public and private medicine for the best and most effective delivery of health care to their respective citizens.

We haven't put it in here; I think it's a separate submission we'll make to the respective standing committees on health around the country in May and June, plus a national editorial board tour, to say, "Let's bring best practices from around the world." Perhaps it's Chinese or Singapore medical savings accounts for primary care, or perhaps it continues to be a single-payer model for tertiary care being the most effective. I would look to the United States and say we should emulate what they do in research and development. For heaven's sake, the University of Texas M.D. Anderson Cancer Care Center in Houston, Texas, spends more on research and development for cancer care than the entire nation of Canada, period. So perhaps we should emulate some of the things the Americans do in terms of wellness promotion and a variety of other things. Mr Patten and I have spoken at length on some of those issues. That's where we are on health care.

With respect to the tax cuts question on gas taxes, again it's part of an overall national campaign to point out that the amount of money we're collecting at the pumps is not being put back into roads and public infrastructure, including public transportation, whether it be congestion pressures in the GTA, light rail initiatives here in Ottawa or other communities around the province. It's an alarm bell to tell the provincial government, "Wait a minute, here. You just cannot continue to collect these high fuel tax costs and not have some premise of redirecting them back." As much as we're not advocating for dedicated taxation, we are advocating for the historical principle of gas taxes.

The Vice-Chair: We'll have to move on to the government side.

Mr Ted Arnott (Waterloo-Wellington): Thank you, Mr Robinson, for your presentation. I think your criticism of the government is intended to be constructive. Your observations have been noted by the government members. I'm certain that the Minister of Finance will be interested in what you've had to say.

I want to thank you for your support of the notion of the need for debt reduction as a higher priority within the government. I think you're absolutely right on that. For the last three and a half years I've been advocating within our caucus that the government should adopt a debt retirement plan over the long term, suggesting that we should try to look to the future with a vision of a debt-free Ontario. Alberta of course is in the very enviable position of being almost debt-free. As you pointed out, the United States has a projection that, if certain current trends continue, they may be debt-free by the year 2012. Looking at our economic policies as a Conservative government, we have to look at debt retirement with a view toward making that a higher priority.

In terms of health care spending, I think it's fair to point out that our government was committed to increasing the health budget to $22 billion, which we've achieved earlier in our mandate than we had planned, I suppose, but we are responding to the needs, we believe, of the population and the expectation for improved health care. I think it's fair to say that we're not wasting a lot of money in health care right now. But I would say to you that your suggestions and your recommendations in terms of improving patient care while saving money within the system would be very helpful. We would look forward to receiving that advice from your organization.

Mr Robinson: Again, I understand the political imperative of increasing health care funding, but as we've pointed out many times, more funding does not equal better outcomes. More funding is more funding. We tried for 30 years federally to fund job creation through deficits and all we got were more deficits and a national debt. There are other areas. That's why we point out, and we'll point out again in our submission, outcomes measurement. More funding does not necessarily increase life expectancy. More funding, if it just goes to freeing up bed space, may not go to needed cancer research or needed research into the diseases of aging. It's a question of targeting and looking at outcomes and on where you get the best bang for your buck. That's our message to the provincial government.

I think Mr Winchester may have something to add on that. No. OK.

The Vice-Chair: Just 30 seconds.

Mrs Molinari: Thank you for your presentation. My comments are more in the line of, as a government we feel that we need to have a balance. Certainly debt reduction is one of our priorities, and tax cuts and creating jobs will add more dollars to the coffers. We also need to invest in social services that we presently have-education and health and all of those. So trying to keep that balance is the critical point and not to focus primarily in one area, debt reduction. As important as it is, we also need to keep in mind that there needs to be a balance.

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If I do have time and you have time to respond, I wanted to hear more about the comment you made about there's too much focus, almost myopic, on public dollars committed and too little focus, or non-existent, on result obtained for public expenditures and value-for-dollar questions. So if there is an opportunity, if you would respond and be a little more specific on what you mean by that comment, I would appreciate it.

The Vice-Chair: An ultra-short response, by all means.

Mr Robinson: Just a point of clarification: we still have one question coming from the Liberal side. That's why we're moving here.

In terms of the focus, more value-for-money audits, a greater adherence to the recommendations of the auditor of Ontario. Mr Peters does good work, and we believe that there's very much a federal malaise that has beset Queen's Park as well, that the Provincial Auditor's report is something to be tolerated-take two Tylenol, read tomorrow's headlines and let's move on-as opposed to responding constructively to what an independent officer of the Legislature says should be done to improve government performance.

The Vice-Chair: Thank you very much. We move on to the Liberals.

Mr Monte Kwinter (York Centre): Thank you very much for your presentation. I agree with very much of what you say, but I have a basic problem. The basic problem is that when I was in government the most common comment I got from people like yourselves and the business community was, "If you had only run that place like a business everybody would be better off."

The problem: You can't run the government like a business, because you can't make some of the changes that a business is forced to make. Take a look at Nortel. Nortel has gone to the point where they've seen their share price go from over $100 to $30; they're announcing they're going to lay off 10,000 people. If you had that situation happen in government you would have disaster, you would have a severe problem, so you have to make choices.

This government made a choice to have a tax cut when they were still in a deficit, so that tax cut was paid for by increasing the debt of the province. In 1990 Mike Harris went to Windsor and stated, as you have stated in your brief, that we don't have a revenue problem; we have an expenditure problem-and he was against casinos. The next day he changed his mind because he suddenly came to terms with the political reality. Now we have a situation that if that revenue was not there from casinos and gambling, they would have a much more serious problem than they have now.

These are some of the concerns that I have. I absolutely agree that you've got to reduce the debt as quickly as possible. I don't know when you got here this morning, but I'll tell you, we've been having these hearings for a week now and we have delegation after delegation coming to us and saying, "You've got to spend more on education. You've got to spend more on child care. You've got to spend more on infrastructure. You've got to spend more on every single area." There is a demand by people to say, "We're sorely underfunded, the long-term progress of this province is being undermined, and you've got to increase it." You have these conflicting interests: the fiscal reality that we've got to get rid of the debt and the political reality that the citizens of this province expect sort of minimal service that even now is not being provided. Do you have any reaction to that?

Mr Robinson: Thank you for the question, which gets us back to the entire theme of our presentation: fiscal focus for formative future. You cannot redistribute the wealth if you don't create it in the first place. It is not a chicken-or-egg question.

The pillars of a respectable civil society in terms of taking care of the needy, having funded meritorious public goods and services, are built on a foundation of wealth creation. We think the quickest route to wealth creation is ensuring that our fiscal house is in order, and once we reduce the debt we free up 14.7 cents out of every tax dollar. You free up $9 billion for needed social service investments. That gets back to us on debt reduction.

The organization does not have a political position on the casino question, other than that gambling is a tax on people who are bad at math. I'm guilty as charged. I buy the odd 6/49 ticket, but I can afford it. Unfortunately, it preys on the poorest and most vulnerable in our society. They just get into a cycle, whether it be welfare dependency or continuous low incomes. Unfortunately, that's the reality of gambling. We have a fear that the government is actually too reliant on gambling and lottery and alcohol sales revenues. They are very cyclical with an economy as well and not the sustainable basis of long-term funding for needed social services and public goods.

The Vice-Chair: Our time has run out. We appreciate your presentation. On behalf of the committee, thank you very much for coming forward.

Mr Robinson: Thank you, Mr Chair. Our hearts are with Mr Patten.

CANADA'S RESEARCH-BASED PHARMACEUTICAL COMPANIES

The Vice-Chair: Our next delegation is Canada's Research-Based Pharmaceutical Companies, Mr Murray Elston, president; Ms Zenek Dybka, director of Ontario region. Maybe you can restate your names for the record. On behalf of the committee, welcome. We look forward to your presentation.

Mr Murray Elston: Thanks very much, Mr Chairman. I'm Murray Elston. I'm the president of Canada's Research-Based Pharmaceutical Companies. Zenek Dybka is the director of the Ontario region. It's good just to get back into the forum. I see that people haven't lost their inclinations to deliver the usual materials here. It's good to sort of feel like I'm back home, in a way. I think it might be fair to say that I wasn't always a welcome participant in these committees from a previous life, but I'm happy to be here this morning with you. It's good to see so many faces that I recognize. I can count on some interesting questions, I think.

Let me do a couple of things. Let me just bring your attention to the piece which is in front of you. It probably would be better if I read it, but I won't. What I will do is try to highlight it so there'll be some time left for some questions, which I think is probably a more useful way of proceeding.

First of all, our association represents 58 companies. Our backgrounder, which is appendix A, sets out that there are some 21,000 Canadians who are directly employed by our companies. It includes the large companies which you might recognize: GlaxoSmithKline, Purdue Pharma, Pharmacia, Merck, Pfizer. It also represents the new evolving biopharmaceutical companies, many of whom you will not have heard of, but about whom you will hear a lot more in the future: we have Lorus, we have QLT from BC, Biomira from Alberta, Theratechnologies out of Quebec, and a whole host of others who represent for us the way of the future. In a sense, it really brings me to the nub of our presentation, which is basically that the pharmaceutical industry represents for Ontario a very major prospect of the way forward.

During the last federal election, we had five official parties that were organized around the debates about where we go from here. All of them were moving forward in one way or another with the knowledge-based economy. There were differences in degree, obviously, but there wasn't anyone who was taking us away from that very exceptional and well-needed strategy.

Having said that, we are now in a position where pharmaceuticals would like to be included in that knowledge-based economy. I think most people, when they talk about it, are talking about the information tech people: the software people and some others. But pharmaceuticals represent in the same way that type of opportunity. We are creating products out of knowledge, generated out of research and development. We would have to say to you that we represent for the government of Ontario a way of fulfilling two of their very largest objectives, one being the creation of jobs and generating a sustaining economy-about which we heard a little bit from the previous presenter-and also representing a significant introduction of innovation to the health care field. While we don't say that you can get something for nothing, let me say that from a substantial point of view, the research does develop, with a bit of an investment, a lot of advance with respect to being more efficient on the ground in providing better health care for all.

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Now, it's interesting for us that we are involved in a working group with the Ontario government, and that working group is basically setting a strategy for pharmaceutical development in Ontario. We've been invited by the Honourable Jim Wilson to put that strategy forward. We've discovered in that working group that Ontario could be one of the top five jurisdictions for investments in pharmaceutical research and development in the world, but not without some changes. I guess I would have to say that from my point of view if we could leverage some of our strengths, then we could make a major step forward. We would urge you to consider these points: (1) leverage Ontario's strengths in areas which I will cover later; and (2) level the regulatory playing field and then create a forum for continued dialogue to strengthen the partnership between the research community, government and the private sector.

For all of this, I think the strategy we'll develop over the next several weeks will permit us to achieve two of the government's priorities simultaneously.

If we look to see some of the initiatives of the government which set the base for us, there's a continued support for health care and reform, and I would be interested in getting into a debate on that, but perhaps we'd have to have another forum. Former health ministers tend to have lots of opinions that tend to take a long time to express. In a rather closed forum like this it wouldn't be possible.

We have a commitment to reducing the provincial deficit and debt, and then we have the leadership of Jim Wilson as Minister of Energy, Science and Technology who's asked us to develop the strategy. There have been a series of steps taken by the government which have created the background or the backdrop for continued investment in research and development.

I must just add one word here, and that is that while all of the items are listed there, the danger for us, economically and from a research point of view, is that the announcement of these programs are well made, they're well publicized, but the issue is not just making the announcement and having one or two or three years. When you're in the business of research and development, you have to have the commitment to sustain these in terms of decades as opposed to in terms of two or three or five years. You have to be prepared to move on to multi-year allocations. I know that we usually talk in terms of five years, but five years is not that long in research and development terms. In fact, you're hearing from me this morning the same pitch that we make to the federal government, which has also put in a tremendous amount of research funding over the last two or three years. It's easy to make the first commitment; it's more difficult when you have to sustain it. In fact, if you look at our history recently, our companies now are putting up about 42% of the biomedical research in Canada. That compares to about twice as much as the government of Canada with the provincial authorities in this country.

I don't say that with any degree of pleasure but merely to point out that when everybody is cutting back on the provision of services and other things, research generally takes the first hit and it takes a significant hit. It takes it permanently because, unlike other areas where, like a switch on an electrical light, you can turn it on and turn it off and get the same brilliance, once you turn off research and development activities, you lose perhaps a whole generation of researchers and developers. You lose the types of dynamics which are generated by women and men who have exceptional credentials internationally. If I can urge anything, if I can get you to take anything back in terms of our presentation today, it will be to hold the line when times get tougher. We know that in our world of political funding things get tough from time to time.

I remember one person who was with me at the Ministry of Health. He was actually in the bureaucracy and quite by chance one evening when we were speaking about some other things, he opined to me that one of the biggest problems that occurred in the department of health was that in the 1970s they took out their research sector. That was not the basic scientific research group that I am speaking about here, but the people who understood how to get to the next trends, the people who understood how to think in advance. When you're in departments like health and everything is running around you so quickly and so densely, it is very helpful indeed to have those think-forward pieces, those things that make you consider what the prospects are if you take step (a) over step (b). So if I urge you to do one thing, it's to protect the research and development integrity of the province.

Having said that, let's build on what we have here. We've got very good credentials in basic research, but let's expand those. We've got very good credentials with respect to clinical trials, but let's expand those. And let's put a regulatory system in place which promotes those being done in Ontario.

We've done a number of things, as I said earlier, and you will see them listed, but the global changes in all areas are having a tremendous effect on whether or not we can attract investment here. Having said that, the pharmaceutical sector is even more affected by those global changes. Take a look at how there is concentration coming with research and development, and you will see that there is a tremendous fight among the people in Europe and the people in the United States to build the critical mass to attract the women and men who do research and development. In fact, Canada becomes a side player; we end up having less than 2% of the worldwide private sector investment in pharmaceuticals. Some C$56 billion is invested annually and we are getting just around $1 billion of that. We should be at roughly 10% of the US level, if we do the 30 million to 300 million people extrapolation, but of course we are at about a quarter of that. Instead of having about $4 billion of annual research, we have about $1 billion. But we think we can do better and we think that Ontario, having taken some steps forward, is not yet at a position where it can critically expand and develop those resources in a way which will be permanent. I guess I would be exaggerating a little bit if I said that you can ever expect it to be permanent. You have to be continually working at these or you can lose the advantage.

I would raise just one country as an example of competition and how they met the competition from outside and actually are raising the bar even higher, and that's Ireland. I think many of you will probably have read the case studies there. They did well in manufacturing and now they're going after knowledge-based economies as well. They are very aggressive and they are a very good example of how you have to really make choices and then proceed to stay the course and work hard.

I think I'll move just really quickly toward the end of the presentation and deal a little bit with health care. The first message: you've got to do well in research and development, and Ontario can really leverage itself in research and development to increase its economic factors.

You can see on pages 14 and 15 of my presentation-and I hope they're the same ones on yours-a list of three areas in which Ontario should take some actions leveraging the strengths, and I've laid them out there, levelling the regulatory playing field both at the provincial and federal levels. I'll let you read those and you can actually take some time to ask me some questions.

It's important to know that the products we discover are helping our health system respond better, in my view, than it was designed to respond some 35 or 40 years ago. We are dealing with more diseases; we are finding cures for more problems that ended the lives of Canadians; we are promoting the ability to move toward even new innovative therapies which will extend life. You will see later in this presentation a couple of studies which show if you invest a dollar at one point when a man is 60, you will get another year of extended life for him, or if it's a dollar for a woman at age 60, you will get 2.3 years of extended life if you do it at the right time. There are all kinds of examples of how our medicines are beneficial.

What we need is the recognition that we have to have, in the context of a research and development economy, the ability to make the products which are discovered available to the women and men who need them in our society. Products discovered here are of no use, if they are going to be curing diseases, if they're going to be helping people with Alzheimer's or with MS or with cancer, if they are precluded from use by the women and men who need them by some restrictive practices of listing.

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I will leave it to you to understand, I guess, that if we are going to have a very active research and development community, it will only be beneficial to have that if we are actually going to make use of the products-and we have a huge number of products which we've found in this country, by the way. Many of you will probably not know that the list is as extensive as it is. Everybody knows about insulin. Probably some of you will know about Singulair, which was discovered in labs in Montreal but was not approved for use in Canada until 28 other countries approved it for use. We've got a whole series of other examples: Premarin, which is used in women's health and which is run by Wyeth-Ayerst, which happens to be the company of our chairman, Aldo Baumgartner. All of these advantages are available for our economy and they are available for our health care system if we have practices which are effective and efficient in making these products, one, discoverable here, and two, listable here and fundable here for formularies and then ultimately available for use by the women and men who are suffering from diseases.

I have a list of four different areas which I think can assist the government of Ontario. I think we offer the advantage of being one of those, if I can put it in quotes, "clean" industries, part of the knowledge-based economy which is so important, I think, critically overall. Third, we offer sustaining help in our health care world in a way which probably none of us, and me in particular-I will speak for myself-could ever have expected some 15 or 17 years ago when we were wrestling with the problems that we confronted there.

Those are my remarks, Mr Chairman. I'd be pleased to answer questions if there are any.

The Chair: Thank you very much. We have four minutes per caucus, and I'll start with Mr Galt.

Mr Doug Galt (Northumberland): Thank you for your thoughtful presentation and interesting information.

I want to explore the costs in the Ontario drug formulary. You'll be familiar with the spiralling costs, that in roughly 1985 we started out at something like $400 million. By 1995, it was $1.2 billion, and it's still climbing at double-digit figures, very quickly. It's not uncommon to hear of somebody getting a prescription for over $400, an injection for $500 once a month, and so on. Just a few years ago we thought a prescription of $30 or $40 was pretty big, but this is spiralling.

We see what's going on with the federal government. They started out with a so-called 50% they were going to match; we got down to an all-time low of 7% in Ontario. We're back up in the neighbourhood of 11% or so. I look at a socialist province like Saskatchewan, where you have to pay almost the first $1,000 in drug costs before the province kicks in, and here we have people complaining if they have to pay the $2 or the prescription fee of $6.11 on a $400 prescription.

I'm coming around to the question of, where do we go? We heard the previous presenter tell us we're almost to the point of two ministers: the Minister of Finance and the Minister of Health. We're now up to 44% of the programmable costs in Ontario being health care. It's climbed from 38% since we took office. His suggestion of two ministers is not that far out; we're headed in that direction. It's a little extreme right now but it brings a point.

I'm coming around to, what do we do as a province? You're selling pharmaceuticals and promoting them, and I can understand that. Every once in a while I hear somebody say, "Well, if you take this particular prescription, it will save people from going to the hospital and we'll save umpteen dollars," but what are we going to do to get this mammoth thing under control as it relates to pharmaceutical costs?

Mr Elston: There are a couple of remarks I'd like to make. First of all I think the issue is, what do you do if you don't provide access for people to these medications? Our need is to respond to disease problems. There is more information in my little written piece here, but it costs upwards of $750 million to find one successful molecule, and there has to be an ability to recoup that, so it's a very expensive process. Having said that, if you do not respond, the expenses are huge in terms of personal suffering, which we cannot quantify and, second, in time in beds, which we can quantify. I have to confess I haven't been reading my material as closely as I should perhaps, but in the old days it wasn't uncommon for a bed to cost us $1,000 a day. When people no longer have to be there consuming a $1,000-a-bed resource, then you can see the benefits of being in a position to be at home and dealing with the disease in that sense.

My view is and continues to be that our health care system is functioning as well as it is only because of the introduction of innovation. I put in that category not only the therapies which our companies produce in pharmaceuticals but also in terms of the innovative medical technologies which are also available-MRIs, CT scanners, lithotripters. All of those things are there. From my point of view, if we had not introduced any of those therapies we would be now bankrupt in our health care system. But in fact, the innovation, for which we're paying and we're paying good money, is permitting us to provide care to huge numbers of people in advance of those that we would have been producing care for before. We don't have huge wards. We still have to deal with the issue of how many hospital beds are right, but we're doing so many more things outside the hospital sector. We are, I think, positively ahead. I can give you a whole series of things; in fact, perhaps I should send my whole Value of Medicines brochure.

I cannot contend to you that it will get cheaper, but I can tell you that we are better, and we're better as a population. We're intervening more quickly. We don't do operations, generally speaking, for ulcers; we used to. We have gone from having a single bypass operation as a huge event, to people having quads and even more-doing quadruple bypasses and doing valves and the whole thing. Those are done because we can do exceptional things with medication. I contend to you that it's still an issue, but I can't find a way of suggesting to you that you should make them unavailable so that it becomes cheaper.

In my discussions in my old days with Dr Dennis Psutka, a wonderful ADM at health in those days, we used to talk about this and where is it heading, because every time we were able to introduce new technology in the trauma centres, for instance, then we were into a position of having to deal with the rehabbing, to deal with the reintroduction of people into the communities and other things. At one stage, and I don't mean to have this sound cruel, but the cheapest system, if that's what people are looking for, is not to call the ambulance. That's just totally unacceptable, and not to intervene is unacceptable.

The Chair: Thank you very much, but we've run out of time and I have to go to Mr Kwinter.

Mr Elston: Just like the old days. I'm sorry, I ran the clock.

Mr Kwinter: As always, it's a pleasure to see you, Murray. I have a parochial question for you, first off, which is nothing to do with what's going on here. But I saw your publication, called The Parliamentary Guide, and you list the R&D member companies located in the 30 federal ridings across Canada and in Ontario. I have the head office of Aventis in York Centre. I don't see them listed in here.

Mr Elston: These are just our members. It's probably Aventis Pasteur, which is vaccines and a very well-known and very accomplished company. They are not a member of ours. Their senior, Aventis Pharmaceuticals, is a member of ours. It's a great company. Through you, asking them to join up, we'd be happy to have them, too.

Mr Kwinter: We heard from the previous presenter the fact that if health care costs are not curtailed it's going to take up the whole budget. There seems to be a real movement on the part of your industry and others to try to get some efficiency, so that you can get better for less or better for the same. One of the things that has always concerned me is the whole basis of getting listed on the formularies and the DQTC and the duplication. Pharmaceutical companies have to submit their products to the provinces. They then have to submit them to the federal government. Why would there not be one central agency for all of Canada where if it meets the Canadian requirement it meets every province's requirement? What is so special that the province has to make a determination independent of what the federal government is doing?

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Mr Elston: I think, in fairness, the result of the history of development of the drug programs is what has brought these various iterations together. I suspect that while safety and efficacy is the hallmark of Health Canada, once they give a notice of compliance which permits us to go to market, most people still understand that as appropriate.

What the DQTC and other provincial organizations are doing is sort of an independent assessment of what it delivers in terms of value to the formulary. Unfortunately, our biggest efforts now in most provinces are designed to control costs and don't look at outcomes.

We're with you. We think that the best formulary for the benefit of patients and their practitioners, the doctors, is an open formulary, so that you have a menu of products available from which to select. But right now the interventions are more about controlling bottom line and preventing quick listings, so that there isn't a huge drain right away on resourcing.

I think that if the program is to exist as an effective one, they should reorient themselves to deal with health outcomes as opposed to the financial outcomes. While that may look like it flies in the presentation made by the previous people, it doesn't. We believe that if you get the right medication, the right therapy, the first time, then you will save yourself a lot of time, suffering and resources.

Mr Christopherson: Murray, thank you for your presentation. I have to tell you, I feel a lot safer with me asking you the questions than the way it used to be. But always an interesting presentation.

I want to ask you something related, but it may be unrelated enough that you can't respond. I'm more just fishing for information to get a sense of something. On the whole issue around genomics, one of the things that struck me was that of the two teams internationally that were racing to see who got to the finish line first, one of them was a partnership of two, three, maybe four public institutions-most of them I think universities, but there may have been a couple of others-and a private corporation. I just wondered if you know what that was, how it works.

I understand the benefit to that particular company would be they then could be first off the mark in terms of the transition from R&D into application. But given the fact that those universities still have public funding, how does all that wash out from the time that they strike a deal, and what is that arrangement, to the impact on patients receiving the benefit of that R&D and its application?

Mr Elston: First, I don't know the details of the arrangements, necessarily, but I know that for instance the Hospital for Sick Kids, through Lap-Chee Tsui, has just worked out a partnership where they will end up sharing some of their information about genomics as well with this organization.

But basically what happens-I think you're talking about Solara, presumably. They are actually making some returns on the way they package the material so that it becomes useful. Everybody knows you can have all kinds of materials and stats and otherwise, but having the data in usable forms is really what that is working toward. I think you will find that it probably makes it much more efficient to have it in usable form. You'll find people then making quicker advances with regard to discoveries. So I think that's ultimately where it will end up.

It probably makes a shortcut, which will save a huge number of years for some organizations. But at the end of the day, David, you'll probably still find out that it will still produce expensive and tedious research for the women and men who have to make use of the data. I think it will ultimately shorten it, but it will still be an expensive experience for them. I presume that there will be some benefits moving to each of the university players, but I don't know the exact details.

Mr Christopherson: This is somewhat related but more just my personal interest. The kind of pharmaceutical research that's going on at the international space station, what are they doing there and what are they trying to achieve that they don't think they can do here? Again, who is paying for that and are there partnerships there? I'm not asking for an expert answer, Murray, but can you give me a sense of that?

Mr Elston: No, I can't give you an exact sense, but I do know that some of the materials which are being experimented with are being experimented with in zero gravity, so that you find that the crystals are developing differently from the way they might be able to do them in labs here. It would be extensively different from the type of work that would be done here, merely because of its location.

I should say to you, though-and perhaps I can do this through you, Mr Chair-we would be extremely happy if we could put together for a group of the legislators a visit to our research centres in the Toronto area, for instance. While we have had and will have another pharma-day, those days are not always amenable to everybody. But if you would like, when your schedules permit, please contact us, or contact Zenek or myself, whatever, and we'll make arrangements to see the very sophisticated stuff that goes on.

As you know, history and law don't permit you to get into the type of stuff these science people do. I'll tell you, I'm overwhelmed by the complexity of women and men who sit at these stations. And it's not just chemists any more; it's physicists and math majors, it's the person who does software, it's IT. It's a partnership that is cutting right across the whole fabric of our research world. So it's a tremendous opportunity. If you would like to take advantage of it, please contact us and we'll take you for a little trip.

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

A couple of quick announcements. I'd like to remind the members that we have to check out by 12. Secondly, lunch will be served in the dining room, if you so desire. We have made reservations.

CANADIAN ADVANCED TECHNOLOGY ALLIANCE

The Chair: Our next presentation this morning is from the Canadian Advanced Technology Alliance. Could you please come forward and state your name for the record. On behalf of the committee, I would like to welcome you. You have 30 minutes for your presentation.

Mr David Paterson: Good morning, ladies and gentlemen. My name is David Paterson. I'm the executive director, Ottawa, of the Canadian Advanced Technology Alliance. My primary role is policy analysis and advocacy, which is what brings me here today.

The Canadian Advanced Technology Alliance is the association which represents the Canadian high-tech industry. We have 600 member companies-247 of them in Ontario-and another 1,500 companies associated with us because they belong to associations which have affiliations of various sorts with CATA. Most of our members are in the information and communications technology industry, but we also have biotech, aerospace and advanced manufacturing companies. The big companies, the giants of the industry, are all members, but the vast majority of our members, I would say over 90%, are SMEs with sales of less than $100 million a year. We have almost no members who don't export. We have almost no members who don't perform R&D. This is the leading-edge, globally competitive Canadian high-tech industry that we're speaking of here.

It's not a secret that the new economy, the knowledge-based economy, is the key to growth in Ontario and in Canada. Everyone knows that the only really important raw material of the new economy is people: human resources, people and their skills. The other critical resource is money. But one of the things our members have found is that a good business plan backed by a good management team can always find money. It will be a little more difficult this year than it was last, of course, but money will be found for the good companies.

When we poll our members, they tell us that human resources are their biggest problem. The shortage of the talented people they need is the one issue, the one problem that can prevent them from growing in the way they would like to, and it will handicap them in the global competitive environment where they all operate.

Last summer, the government reported that there were 50,000 vacant jobs in the high-tech industry in Canada. We believe that was rather an underestimate. One of the main issues that faces our members is that this is not a local problem; it's a global problem. In the United States they believe that the shortage of information technology workers is over 1.2 million. The shortage is almost exactly the same size in the European Economic Community. Even India, which was once considered to be a place where information technology workers, engineers and programmers were available in abundance, is now suffering shortages in some of the fastest-growing specialties. They cannot do all the work they want to do.

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There are three sources of the human resources the industry needs: the current workforce, immigration and Canadian schools. Our members tell us that personal income taxes are their number one government issue, because taxes are a critical matter both for present employees and potential immigrants. For several years we have pressed governments hard to reduce income and capital gains taxes to competitive levels, which will both reduce the brain drain and attract new immigrants. We finally succeeded at the federal level with the October mini-budget, which took a major step in that direction. We will continue to press for further reductions, however, principally because the target keeps shifting. President Bush has introduced legislation that will reduce US taxes by no less than $1.6 trillion. That will put us back at a major disadvantage.

The government of Ontario-I'm pleased to compliment you-has set an outstanding example for other governments in the field of tax reduction. Personal income taxes have been reduced substantially in recent years. Of particular interest to the high-tech industry, employee stock options have been accorded better treatment at both the personal and corporate tax levels. We urge you to continue to pursue tax reductions to assist the new economy in its pursuit of the talented people who are essential to success and growth.

There is one particular Ontario personal tax matter that we feel should be done away with in the next budget, and that is the Ontario surtax. It was established to fight the deficit, which is now gone. It strikes the highly skilled, higher-income people on whom our members depend for success. It's all very well to speak of taxing the rich, but this tax comes into effect at a level where it actually hits new grads in their first job and young couples who are trying to save for their first house. It is the sort of disincentive to working in Ontario that should be done away with immediately.

At the corporate level there are three taxes which particularly concern our members. The first is the Ontario capital tax, a flat tax which is collected whether a business is profitable or not. It is a strong disincentive to investing in Ontario, whether to expand an existing business or establish a new one. There are many places just over the border, for example, which have avoided capital taxes for exactly that reason. This is a tax where the phrase, "Level the playing field," is obviously apropos.

The second problem at the moment is the clash between Ontario and the federal government over the Ontario super-allowance and the federal SR&ED tax credits, about the federal clawback of benefits that was introduced in the February 28 budget last year. The changes have the effect of moving much of the allowance from the hands of those carrying out R&D in Ontario into the hands of the federal government. While we acknowledge that the problem was created by the federal government, industry has made a proposal to the Ontario Ministry of Finance which would essentially solve the problem, preserving most of the benefits at no cost to the government. A quick resolution is desirable. Maintaining the integrity of the super-allowance will be an important consideration to our members when making decisions about current and future R&D investments in Ontario.

The last tax problem is property taxes, particularly as they apply to software companies. Some of them have begun to report that they have been classified as industrial activities for property tax purposes and not commercial, where they belong. The taxes are roughly double in that case. Software companies are not industrial. They don't do any manufacturing at all. Even in cases where they distribute software on CDs in boxes with accompanying manuals and all that sort of thing, they do none of that production internally. They contract it all out to specialists in the field.

Last year, CATA took essentially the same issue before the Workplace Safety and Insurance Board, because they had begun in a number of cases to assign software product firms into the very highly rated industrial categories, the manufacturing categories. We were able to persuade them that this was not appropriate, that in fact the differences in the business are so substantial that there was actually no need for software companies to be compulsory registrants under the act.

The second issue of greatest concern to our members after the question of personal taxation is education. Ipsos-Reid just released a survey which we had sponsored, which reports that a majority of Canadians recommend that high-tech leaders put education first on their list of issues, ahead of the tax matter. Based on on-line interviews with over 1,000 Internet users, the issues of tax reform, environmental impact of new industries and social accountability of businesses were all well behind the education issue, which 56% felt was the number one issue that should be pursued.

Education is not a new issue with CATA. In 1998 we launched our Double the Pipeline initiative aimed at doubling enrolment in computer sciences and selected electrical engineering fields in Ontario universities. The government responded promptly with its access to opportunities program, initially funded at $150 million and subsequently raised to $223 million. That program is regarded as being highly successful by everyone involved: the government, the universities and the high-tech industry. It's been so successful that we're in the process of launching it in British Columbia, where there are problems in enrolment in the universities.

Technical skills are not the only need. When Industry Canada first began working with the software industry in 1987, we felt that the shortage of programmers would be the number one human resources issue in the industry. We found out almost immediately that that was not the case, that it was more difficult to find good marketing and salespeople than it was to find programmers. That's still true. If you corner one of the CEOs who serve on our board of directors with the question, they'll admit that it's still the case, that marketers are harder to find than technical people.

The high-tech industry is not the only one which is suffering from the lack of educated employees. This is a universal issue now. As the baby boomers approach retirement, it's clear that replacing them is going to be an extraordinarily difficult problem. It's an enormous problem in all of the professions and in the skilled trades. Steps must be taken now to expand enrolment in apprenticeship programs, in colleges and in universities to meet this need or the negative effect on the Ontario economy is going to be very severe.

The federal government has committed funds to expanding university education in the areas that fall within its jurisdiction. Ontario has taken significant steps with the SuperBuild financing, the $1.6 billion which is going to go into expanding capacity in the Ontario college and university system by 73,000 by 2004.

The issue that remains unresolved, however, is the operating funds which are essential to the universities if they're going to be able to go out and recruit the staff they need in what is now another globally competitive environment, where all the universities in the world are faced with essentially the same problem of replenishing their staff.

It's obvious that education pays well; there are plentiful statistics to prove it. Strictly in the jobs market, for example, from 1990 to 1999 employment for Canadians with post-secondary education rose by 2.25 million. For those with a high-school education it only rose slightly over 100,000. For those who failed to complete high school, the actual number of jobs available dropped by almost one million. The situation hasn't changed today. There has recently been publicity here in Ottawa about layoffs by high-tech firms. The people who were laid off were contract employees on the factory floor. We know, because our members are telling us this all the time, that they are still hotly pursuing the high-quality engineers, the programmers, the marketing staff they need to grow and expand and compete.

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The educated obviously also earn a great deal more. The best figures we have are from the 1996 census, which makes you wonder how far the knowledge economy has expanded in the statistical world, but that's another issue. People with university degrees had an average employment income of $42,000; people with high school diplomas made only $22,000; and those who didn't get that far earned slightly less than $20,000. So the return on a university education is extraordinary. It is extraordinary both for the citizens who have pursued education and for the governments which have substantially funded that education, because it's rather obvious that the government of Ontario is going to gain a lot more in tax income from someone with a university education than they will from someone who is just stumbling along trying to get by on the minimum wage.

From the perspective of the high-tech industry, Ontario needs to move quickly on the two issues of reducing taxes, personal taxes in particular, and continuing to increase support for education. If it does so, CATA members in the high-tech industry, and all Ontario businesses, will be in a strong position to compete in the global economy and to ensure continued growth and prosperity for Ontario.

The Chair: Thank you very much. We have three minutes per caucus. I'll start with Mr Patten.

Mr Patten: Thank you, David. It's good to see you. I was at one of your educational sessions, which I found most illuminating. I have only a short time here and I'm interested in your comments related to education. In some of my discussions with (1) some of your members and (2) some of the people at the university, college and even at secondary school level, there is a big worry. The worry is that a high school graduate today is not particularly well skilled for your industry; perhaps retail, maybe, which is minimum wage, more or less, and not too much else. But at our college and university level in Ontario, if we're not number 10, we're at number 9; we're one of the poorest per-student-supported systems in Canada, and perhaps even in North America. In light of the indications of your members showing that this is even a higher priority-I was surprised to see that-than the taxation issue, that it was recognized as the ultimate resource, the human resource and their skills, can you comment on that? What is your advice to the Ontario government in light of the position we are in now and where we must go, making the assumption, perhaps, that Ontario would like to see us being a world leader in the technology field?

Mr Paterson: It's our view that this is a critical issue. We recognize that the SuperBuild fund and the money that has been made available for the capital costs of expansion to meet the expected growth in enrolment in colleges and universities is a major step. That's a large piece of money. It has been warmly welcomed by the universities. But you cannot do it all with capital spending. You must have the right operating budgets to support that. Tuition fees have made, I am almost certain, the only contribution to increased operating budgets in the Ontario universities over the past few years. But they are now at levels where you can't say that the students are not contributing substantially to their education. There need to be more operating funds made available to the universities and the colleges if they're going to be able to meet the demand to provide a quality education, and quality is the critical issue. It's not a question of bums in seats; it's a question of minds that need to be developed.

Mr Christopherson: Thank you for your presentation. You raised an issue that we're finding-actually I've been surprised during the course of the hearings that it's widespread across all sectors of our economy, the lack of skilled workers-has virtually come up from every end, from the construction end of things all the way through to the high-tech end and everything in between.

You just placed your emphasis in response to Richard's comments on quality education, recognizing then that quality education is going to cost. I've been referencing during our hearing the TD Bank presentation by their chief economist, pointing out two separate charts on where we are not spending the same money on post-secondary education as our competitors internationally. We heard this morning the concerns in the Ottawa-Carleton area about the elementary and secondary school systems and their lack of funding. You also throughout the presentation talked about wanting to make changes to corporate taxes, capital taxes, personal income tax and property tax, all in the way of paying less, which is what you're lobbying and advocating-and that's fine, that's why we're here.

Now, that leaves us with a huge problem. Even if the government surplus held, and I have my doubts now as to whether or not by the time the transfer payments come in from the federal government based on the revenue and GDP of the country-and the province as it relates to us-that's going to hold, but even if it did, the amount of money we need to bring our education system back to par, I think to the level you want, would surpass the surplus. We're talking in the billions of dollars. Can you help us get through the notion of trying to either do both or which one is the higher priority and in the best long-term financial interests of Ontarians?

Mr Paterson: Our members believe that you can continue to pursue growth by applying both strategies: lower taxes and greater spending on education. It's not going to be easy-it's never easy-but the fact remains that Canada has to live in a competitive environment, and if the tax structure here is grossly out of line with our next door neighbour, it's going to influence people's behaviour. They just pack up and go. On the immigration side, certainly we have a very good record, but the fact remains that there are still lots of high-quality people whom we could get with a more competitive environment, who are going to the United States.

Mr Christopherson: You mention "environment." They'll probably want an environment where they can breathe the air and eat the food that we grow and drink the water, and that costs money.

The Chair: Thank you very much, Mr Christopherson. You've run out of time.

Mrs Molinari: Thank you very much for your presentation. It's interesting, some of the recurring themes of the need for post-secondary education to recognize the needs of the century we're moving into and to adapt to some of the innovative ways. Certainly as a government we recognize that and are making some initiatives to move in that direction. You've named one of them, the access to opportunities program that we've initiated. There are a number of others. Just to state a few: the $750-million Ontario Innovation Trust is helping to fund labs, high-tech equipment and other research infrastructure at universities, hospitals and colleges; and the Ontario new technology tax incentive that provides companies 100% income tax deduction on the cost of eligible intellectual property acquired for use in Ontario. Those are just some of the innovative ways that we're trying to address the issue.

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The issue of need for people in the high-tech area-and you've also mentioned the shortage of carpenters, masons and machinists-we've heard repeatedly, over and over again. A number are retiring in those fields and we need to replace that workforce. Part of the difficulty is finding students who are interested in entering those fields as well, because as a government we can do as much as we can to provide the spaces and provide the support, but you also need students who are interested in getting into those fields.

I have two questions. One is, what would you suggest that we could do to encourage students to enter those fields? The other is, as a government we've just passed Bill 132, which will allow for private universities and colleges to grant applied degrees. We think this is another way to open up more opportunities for students. I would like to know your views on those two points.

Before I give the floor to you, I want to clarify some of the comments made by my Liberal colleague Mr Patten, that the money we're investing in post-secondary education-I think he referred to a number as us being the ninth, but I guess it depends on what you do with numbers and where you put them. We're actually in the top five, when you take into account some of the investments that we've made for student assistance in a number of areas, and the tuition fees have been restored so the student pays one third of the cost of the actual tuition fee. Those are a number of areas that we've moved in to address some of the concerns.

If you could take a few minutes to answer those questions for me, as to how we could encourage more students and your thoughts on private universities and granting of applied degrees for colleges.

Mr Paterson: The difficulty in attracting students into the trades, into the apprenticeship programs and that sort of thing, I think is related to the perception that these are not good, interesting, well-paying jobs-that's what it amounts to. It's glamorous to be an engineer or a programmer; it's not glamorous to be a mason. I happen to know somebody who is just finishing up his apprenticeship to be a mason, and he is someone who had tried a number of different things before. He's still not sure how he became interested, but he has a lineup of people waiting to hire him because there is a shortage of masons. He is going to make money like it's going out of style, and he's going to be doing something that he really enjoys.

How do you get messages of that nature into the school system? I am not sure, but I do know that quite apart from the people our industry needs, there are huge opportunities out there in many of the trades. Somehow or other, I guess they just have to be glamourized and young people have to understand better what the opportunities are. They may be bored with sitting in a high school classroom, but that doesn't mean they should just pack up and go and take the first job that comes along. There are other opportunities out there, for which further education is required, that are going to be extremely remunerative.

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

Mr Paterson: It was a pleasure to be here. If anyone has any questions, by all means give me a call or send us an e-mail. We'll be glad to oblige.

The Chair: Thank you. Unless there are any questions from members, the committee will adjourn until l o'clock.

We are now adjourned.

The committee recessed from 1154 to 1258.

OTTAWA-CARLETON CHILD POVERTY ACTION GROUP

The Chair: I'd like to bring the meeting to order. Our first presenters this afternoon are representatives from the Ottawa-Carleton Child Poverty Action Group. Could you come forward and state your name for the record, please. On behalf of the committee, welcome. You have 30 minutes for your presentation.

Ms Christina Marchant: My name is Christina Marchant.

Mr James Kuhns: My name is James Kuhns.

Ms Lynn Sherwood: My name is Lynn Sherwood.

Christina is just getting the overheads sorted out here.

We're representing the Ottawa-Carleton Child Poverty Action Group. I just want to say a few things. The Toronto Child Poverty Action Group made a presentation to you last week, and we don't want to bore you silly by saying the same things over again. So some parts of the statistics in here we're not going to repeat; we'll go on with other things so it'll be more useful to you that way, because there's a lot to talk about.

Ottawa-Carleton Child Poverty Action Group focuses on the children in Ottawa. Last year, the Social Planning Council of Ottawa-Carleton did a poverty report card on children which estimates that 23% of the children in the city are living under the low-income cut-off line established by Statistics Canada; 12% of our families are living on less than $20,000 a year. A substantial proportion of the citizens of this city have been in poverty for generations and have known no other form of life.

Last week, the Fraser Institute rated the economy of Ontario as the third strongest in North America. Between 1989 and 1997, at the same time, the rate of child poverty in Ontario increased 118%.

In this millennium, we can e-mail people in Thailand, a place my grandfather never knew existed, just as easily as we can phone a takeout pizza outfit down the street. We can send people to orbit the earth in a space station and we're unravelling the histories of the human genome. But we seem to take for granted that it's inevitable that one fifth of our children are going to grow up in poverty. We're saying that we don't think the status quo is any longer acceptable or necessary in this society. We think we can eradicate child poverty if we have the will to do it.

A hundred years ago, it was accepted that children would die from smallpox, scarlet fever, whooping cough, polio, diarrhea, and it was thought to be God's will, that there was nothing anyone could do about it: "It's too bad, but that's the way it is." We know that isn't the way it really was, that these diseases were the result of poor sanitation, and we've eliminated these diseases as killers of our children.

Our acceptance of high poverty rates among children in this day and age means the impoverishment of everybody in Ontario. According to all research, poor children have more health problems and less success in primary school. They drop out of high school earlier. They're more likely to be clients of the child welfare and juvenile justice systems. As adults, they're likely not to live as long as the rest of us.

We're talking about jeopardizing 20% of our population, of cutting their lives short. If this was an epidemic of a physical disease, we'd be up in arms about it. We're permitting conditions of life that deny 20% of our children the right to full participation in our society and we're denying the rest of us the opportunity of discovering the potential of these children, because they never get a chance to realize their own potential.

Just as roads and bridges and sewers represent our physical infrastructure and must be maintained and developed on an ongoing basis, our children are our social infrastructure. We can't afford to let 20% of our children live in these conditions.

In this information age, there's less and less need for low-paid, low-skilled, casual workers. We need educated, self-motivated, socially sophisticated workers in our new economy. We don't get that if our children are growing up poorly nourished, poorly housed, poorly educated, alienated from the community because they're moving around so much they don't have a community, and angry because they can see very clearly what the rest of us have and they don't. Think of this as squandering our social capital: our children.

We're going to detail a few of the issues that we think you folks can look at in terms of planning for the future economy of this province.

We think you could begin to implement measures which would cleanse Ontario of the social disease of child poverty, just as we cleansed our cities of the infectious diseases which killed our children 100 years ago. I'm turning over to James for the next session.

Mr Kuhns: Thank you, Lynn. I'd like to talk about the income of families with children on social assistance. The Social Planning Council's report, The Challenges our Children Face, states, "For the community to receive a passing grade, every family ... needs an income which is adequate to meet the needs of their family." In Ottawa and indeed in Ontario this is not happening. Children often are the unintended casualties of the three income-related areas we wish to speak to.

First, the social assistance cuts: in October 1995, the provincial government cut the maximum amount of social assistance benefits by 21.6%. These benefits have not been raised since. Taking inflation into account, the total cuts are now in the 25% to 30% range. The welfare cuts have resulted in people being forced to live in poor and inadequate housing, having to move frequently or become homeless, suffering from poor and deteriorating health, largely due to poor nutrition, and not being able to afford decent work clothes, transportation and telephone services.

The cuts have placed a great burden on the poor and jeopardized their ability to move out of poverty and into work, which is something we all want.

Tax cuts by the provincial government will be of little or no benefit to low-income families and will take away money from the treasury that otherwise could be spent on programs for poor families and children. What's needed is government action to ensure that the poor have enough income to participate fully in society.

Moving on to the national child benefit supplement, this program came into effect in 1997 and replaced the family allowance benefit, which was available to everyone. The framework allowed provinces to claw back the supplement from families on social assistance and to reinvest that money in programs for children. The child benefit supplement, with its current clawback option, is discriminatory. Families on welfare have the supplement deducted from their social assistance cheque, leaving them no better off than they were before. We believe that the money should be left in the hands of social assistance recipients, who are best able to decide how the money should be spent.

In May 2000, Manitoba became the third province to end the clawback because of what they perceived to be the growing depth of child poverty. We recommend the Ontario government follow Manitoba's recent lead and repeal the clawback.

I have a few points on the minimum wage. It's been at $6.85 since 1995. Originally it was conceived to be a living wage, but over the past few decades it has consistently fallen in real terms, leaving the roughly 500,000 Ontario citizens in the minimum wage jobs with far less purchasing power. We believe that an Ontario strategy to reduce child poverty must include jobs with decent wages to enable parents to provide adequately for their children. To take inflation into account since 1995, we would recommend that the minimum wage be raised to $7.50 an hour.

Lastly, I'd like to talk about one of the realities that low-income families face, and that is food insecurity. Despite a buoyant economy in Ontario in the last few years, food bank usage continues to grow in Ontario. According to the Canadian Association of Food Banks' Hunger 2000 report, in March 2000, 283,000 people were forced to use food banks to feed themselves and their families. Of that number, 42% were children.

There's also been another noticeable trend emerging: more of the working poor need to use food banks to get by. In Ottawa, the main food bank provides assistance to over 32,000 people each month; 44% are children. In the past year, the number of agencies that the Ottawa Food Bank serves has grown from 70 to 83, and currently another 15 social service agencies have applications before the Ottawa Food Bank, including many school breakfast programs.

The situation of food bank users with babies is critical in Ottawa as well. Recently the Ottawa Food Bank began purchasing diapers, formula and baby cereal to ensure the parents were able to provide adequately for their children. But charitable handouts are not a permanent solution to the problem. What is needed is more income in the hands of the poor.

Thank you, and now Christina will talk about housing.

Ms Marchant: Hello. I'm not going to read everything that's in our brief, because it's in front of your eyes, but I just want to highlight a couple of things for you.

First of all, my understanding is that the Conservative government over the last year has viewed a solution to housing as being removing the barriers that prevent the private sector from building, so that more housing can be built and more building starts can be encouraged. We believe that Ontario's given the strategy several years to show success and that it's not working very well. Some evidence that it's not working: CMHC estimates show that the rental prices in Ottawa have increased by about 12% since November of last year; 41% of renters in Ottawa pay more than 30% of their income on housing, on rent, and in fact many families who leave social assistance rosters and move on to paid jobs usually are moving into paid jobs that are at minimum wage and they can't afford to pay their rent, for example.

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In addition to rental prices rising, rental housing is in very short supply. Our Ottawa rental vacancy rate is somewhere between 0.1% and 0.2%, and the housing availability is so limited that landlords are at the discretion to screen out tenants whose incomes may not be high enough to give them assurance that the rent will be paid every month. We've heard anecdotal reports that vacancy decontrol is allowing landlords to set the rent at whatever the market may bear and sometimes giving landlords the incentive to evict tenants for reasons what may not be reasonable reasons.

We're also hearing that the tight market is resulting in bidding wars between prospective tenants, and that's meaning in the main that only people with higher incomes can afford housing in our region. That's causing a problem for poor families and the poor children who live in those families.

In the past people who couldn't afford the market rents could apply for social housing, but both provincial and federal governments, as you know, have cancelled any new housing starts and responsibility for social housing has been downloaded to municipalities without any additional monies for that. That's making the problem worse. Again, this is probably not news to you, but we feel it's important to tell you.

In Ottawa today there are about 15,000 families on a waiting list for subsidized housing, and the wait takes between five and seven years to get that housing. So in our opinion there is insufficient housing for the need and we believe that it's our government's responsibility, and your responsibility as a finance committee, to help the situation by putting new money into permanent affordable housing for Ontarians.

I also wanted to draw attention to the current strategy for getting people off welfare and into paid employment. It's helping to create a whole new class of homeless people in our region. As has already been mentioned, many of the new jobs being created are in the service sector and pay at or close to minimum wage. Even full-time work at minimum wage isn't enough to help people pay market rent, provide for food and other essentials of life, and transport themselves to work. A single mother working at minimum wage would earn about $1,100 a month and even if she and her child lived in a one-bedroom apartment she would only have $300 to cover everything after she had paid her rent. Obviously that causes problems.

I also wanted to draw attention to the housing crisis. It's exacerbated by the low shelter allowance on Ontario Works. The maximum limit, as James said, hasn't changed since 1995. We believe that in order to support poor children that shelter allowance on Ontario Works needs to be increased commensurate with inflation and the rising costs.

I also want to draw your attention to the need for other supports. Besides housing supports, poor families need other supports to become self-sufficient as well. We believe that a strategy to address child poverty that relies only on economic factors without a strategy that also focuses on other services, housing and so on, won't be as successful. We think the economic recovery that happened during the second half of the 1990s didn't bring about widespread benefits and prosperity, and with the expected downturn the situation is likely to become worse for the poorer people in our province.

From that perspective, we believe the changes that were made to STEP-that's the supports to employment program-back in October 2000 were punitive and are unlikely to meet your government's stated goal of moving people from welfare to work. The changes reduce the amount of money that people can earn and keep while on social assistance. We think they're going to impose punishingly high marginal tax rates on people who increase their earnings, rather than increasing the incentive to move off social assistance and get full-time employment. We think the changes actually impose penalties for trying to move off and cause more problems than solutions for the people who are living in poverty. So, obviously, one of our recommendations is for you to repeal the changes to the STEP program and increase the encouragement of people to make additional income while they're on social assistance.

One final comment from me: we'd like to comment about the $800 million in funds that are coming to Ontario as part of the national children's agenda. Given the current state of Ontario's children, as Lynn described it, it's essential that those new monies be put directly into services for children in our province rather than being put into the general Ontario coffers. So we encourage you to pay attention to that guideline and, as I said, put the funds directly into services for children.

Now I'll turn things back over to Lynn to talk about child care and education.

Ms Sherwood: We think that child care and education are very vitally important to decreasing poverty among children in Ontario. School is the first experience a child has of the society outside their own family. If we want to get kids out of the poverty cycle, get families out of the poverty cycle, they ought to think of school as being a good place to be, and the wider society, therefore, as being a nice place, not something to be afraid of. Most of our poor families are afraid to be outside their families and their own community because everything they experience is so punitive. You start out with the schools. You make the schools a good place to be and you make child care a good place to be, and children are going to have motivation, are going to have an image in their minds of something other than the life their parents have known. This is where you start; this is really important.

As you can see from these charts, quality, accessible child care is needed and is almost impossible for people to get at this stage in the game. There is a lot of documentation on the need for child care and the costs of child care. We have it all written down here. I can recite it to you if you want. I think the folks last Tuesday did the same thing. The evidence is there; it's statistical.

Right now, we have the highest fees in Canada for full-time regulated child care and people can't afford it. They can't get into it. In Ottawa, the average cost for licensed preschool daycare is $637 a month. Licensed daycare can cost $1,141 for infants and toddlers. Subsidized daycare is the only option for low- to medium-income families and there is not enough subsidized daycare, let alone subsidized good, flexible, accessible daycare.

I am a social worker. I work with people. Every day in my office I have people, a lot them young moms because I work with families, coming in and telling me their stories. I don't know what to do. I have one young mother who is trying to provide French daycare for her two preschool children. She came from an abusive situation. She is working full-time, mind you, as a clerk with the federal government. She is trying to keep her job. She is trying to raise her kids. She is trying to deal with the trauma surrounding leaving her guy, who was awful. We had to try and keep her in subsidized daycare.

The only house she could purchase was in Bells Corners and the only daycare we could find was in Vanier. That meant she was travelling 30 to 40 kilometres one way with two babies every morning to take them to their daycare centre in Vanier, before she went back across town to her job with the federal government. Then she had to go back and get them at night. You guys have seen what the weather is like here in Ottawa. This woman is driving a 10-year-old car. She is driving 50 kilometres a day, one way, with two babies in the back seat. She had to get up at 5:30 in the morning. Do you know what that does to little kids? It was awful.

The mental health problems that result from this kind of daycare crisis are extraordinary, and the cost to the children is huge. We shouldn't be doing this to little kids. These kids were up at 5:30 in the morning and they didn't get home until 6:30 at night. They spent three hours a day travelling back across the city on the Queensway in foul weather in a decrepit car. The mother was always late for work and she nearly lost her job because of the daycare issue. This isn't an uncommon thing. This is standard for a lot of single parents in our community.

Another situation I dealt with was I had a mom come in who's having behaviour problems with her four-year-old. I find out she is working the early shift at Tim Hortons. She has to get her children up at 4:30 in the morning, take them to the neighbour where they stay until their before-school daycare program is open. Then they go to the before-school daycare program, they go to school, they go to the after-school daycare program, and she picks them up and takes them home. I'll bet she has a really nutritious meal on the table after a day like that. This is the life of a four-year-old child, and we wonder why he's hard to get along with, why he's aggressive and acting out.

These children have no childhood. It's not right and we should stop it. We should give them proper care. We should give them a chance to stay at the same place for a consistent period of time and not be trucked all over the city in all kinds of weather at weird hours by exhausted, stressed-out parents who are trying to make a living when they can't. We shouldn't be doing this. We need quality, affordable subsidized daycare that's accessible to all our children.

Another situation that I deal with regularly is this business-you could solve this one in this budget really easily-of the RRSP, that you won't let people have subsidized daycare if they have an RRSP. A lot of people don't live in families with two young parents who are both working, and working in jobs where they have company benefits. I know a woman who is 50 years old and is raising her grandchild. She's working five days a week as a clerical assistant and two days a week as a nurse's aide at an old people's home in order to support this child. She has the child in subsidized daycare. She has a private RRSP because neither of the jobs where she's working has a pension plan. She had to cash in her RRSP in order to provide care for her grandchild. What security does she have in her old age? None.

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These kinds of situations are not uncommon. There are lots of stories like this. It's a simple thing to fix, and I really wish you'd do it. It's not right. I understand that you're worried about people abusing the system, but if people are the kind of people who are going to abuse the system, they're going to figure out some way to do it anyway. The ones who get used and abused are these folks who are playing by the rules, and they're really getting screwed over, to be quite frank. It's not right. As a social worker in practice, what can I do to help them? Nothing. How can I fix this? I can't. It needs motivation from you folks who have the power to try to fix some of these situations that are causing a lot of pain for a lot of our people.

I want to talk a little bit about education. Daycare might be the first step for a child entering the larger world, but education is the second one, and right now the education system in Ottawa is a huge mess. It's pretty awful; it really is.

At CPAG, we've been trying for a year now to find out how the learning opportunity grants are being used at the Ottawa school board. We've sent several letters. We've had no response. These grants are supposed to be designated funds from the provincial government to local school boards to provide special supports to schools in high-risk neighbourhoods. That's so these kids get school supplies, special outings, enriched programs, stuff like that. It's not happening. We believe these funds are being rolled into general revenues of the school boards so that they can increase the salaries of the teachers, because they are really worried about teachers going out on strike, as I'm sure you all are. The children in these communities are not getting their special outings. Parents are telling me they are having to buy school supplies. For somebody on an income of $950 a month, having to go out and spend $75 in September for school supplies for their child-and God help them if they have two children-is just huge. This means no food. These kinds of things are very serious. They are going on, and we're not doing anything about it.

We all hear about school breakfast programs, and I know you are partnering and trying to get local industry to support school breakfast programs-which they are not doing, by the way, but that's the way you want it. What happens to the mind of a child when she's sent off to the school breakfast program knowing her mother hasn't got any food at home for herself? The children get fed, but the parents starve. What does that do to a child and a family? What would it do to your children if they knew you couldn't eat, in order to give them food?

The institution of school councils means that the children in neighbourhoods where parents have enough energy, resources, sophistication and knowledge to organize themselves and to get things for the school get things. In disorganized neighbourhoods where people are fighting for survival, they don't get things. The schools are inferior; they are overcrowded. The teachers get fed up. An adversarial attitude toward the children inevitably develops between the teachers and the parents in these schools. As a social worker, I spend a lot of time trying to sort this one out. It's not possible. The teachers in these communities are exhausted and overstressed, and the special supports aren't there any more. School social workers have been cut back; school psychologists have been cut back; special services have been cut back. The only way to handle these children is to medicate them. So we drug them, and then when they're 15 we put them in jail for using drugs. It doesn't make a lot of sense to me.

We feel the situation for poor children in Ontario is deteriorating. We know it is; I know it is. I really would like you to listen to us and to pay attention to some of the things we're recommending. I'm not going to read these recommendations over. There are a lot of them; they are listed here.

I am going to say that we have not talked about a lot of other things that are going on. We're not talking about the increasing cost of utilities-natural gas, for example-without an increase in the money poor folks are getting or in the minimum wage. Where do they get the money to heat their houses?

We're not talking about the fact that the government directly deposits social assistance cheques, so people have to pay bank fees in order to get their money out of the bank to spend it. They pay the same bank charges whether the cheque is $20 or $2,000. They have the same bank charges as we do. They pay a lot.

We're not going to talk about what user fees for recreational services mean for kids on a snowy Sunday afternoon in February.

What we are saying is that as Ernie Eves, the finance minister of Ontario, said in the year 2000 budget, "Of all the investments we make today ... none is more important for the future of our province than those we make in our children."

I urge you to consider what we're saying. Think about it, and incorporate in your budget planning some measures to relieve this crisis of poverty among our children.

The Chair: We have run out of time, so there will be no time for questions. On behalf of the committee, thank you very much for your presentation this afternoon.

OTTAWA ECONOMIC DEVELOPMENT CORP

The Chair: Our next presentation is from the Ottawa Economic Development Corp. Could the presenter or presenters come forward and state your names for the record, please. On behalf of the committee, welcome. You have a half-hour for presentation, and what you don't use within that half-hour we'll divvy up among the three parties for questions. You may proceed.

Mr Chris Henderson: Thank you very much, Mr Chairman. I certainly will not take a half-hour for the presentation. I can assure you of that. We'll be about 10 to 12 minutes.

My name is Chris Henderson. I'm the chief executive officer of a company called the Delphi Group, which works in the high-tech industry, particularly in the environmental technologies area. It's also my privilege to serve as vice-chair of the Ottawa Economic Development Corp, which is the voice of economic development in our community. We work very closely with other business organizations, like the Ottawa-Carleton Research Institute, the board of trade, now the Greater Ottawa Chamber of Commerce, and other organizations.

I would also like to introduce Mr Michael Darch, who is the interim president of our organization.

In particular, OED is a public-private partnership that acts as the voice of the exporting sector of Ottawa's economy. We're very focused on helping our companies export globally. One of the things I'll be sharing with you is some of the real focus we have on the US market. We're there to raise our international image and to attract knowledge workers, investments, companies and customers.

We also work to foster growth, improve efficiencies and encourage competitiveness, and we feel there must be a commitment to invest in leading technology sectors, those that are driving the prosperity of Ontario and Ottawa. I would note that the Ottawa of today is the Ontario of tomorrow. We feel we're a large part of the increasing drive to a knowledge economy in our province, and I think that bodes well for the future economy in our province.

The 1990s saw the provincial government shift financial management strategies and significantly reduce Ontario's deficit. Frankly, this strategy has made our province more competitive. We have done extraordinarily well during these times, and today our economy is strong, diversified and poised for even better growth. Our growth has not been a surprise to outsiders, and it's not a surprise to us. We know what our strengths are, and we have built on them. We know what our engine is, the part of the machine that keeps us running smoothly. Without regular maintenance, care and investment, we will stall on the side of the road. In the new economy, it is skilled people and infrastructure that keep us moving forward.

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We are here today, Mr Chairman, to give the message to you and your colleagues that we, the businesses of Ottawa, expect all levels of government to work together to ensure the long-term sustainable success of our city to the benefit of the people who live here.

Ottawa's economy is much more diversified in 2001 than it has ever been in the past. We now boast, as you well know, a very strong technology industry, a growing tourism industry and a healthy federal government. Our unemployment rate is 5%, well below the Canadian average and the lowest in over 14 years. Our population in our new city of Ottawa has grown to 1.2 million people. We're a technological centre on par with any in North America, and we are competing at the highest levels. In fact, we have to compete at the highest levels, as I'll illustrate shortly.

We make this claim with confidence. There have been more than 26,000 advanced technology jobs created in Ottawa in the past two years, 50,000 since 1993. This translates to a 74% increase in high-tech jobs since 1993. By way of example, over the same period our competitors globally-San José had a 36% increase, Dallas and Austin both had 54% increases and Boston had only a 10% increase. We're catching up, and that's good news.

The number of technology companies located in our city has doubled from 500 to over 1,000 in seven years. As you well know, many of these companies are large and established, many are emerging and growing very fast and some hold new concept ideas that may break open high-technology markets in the future.

A true indicator of Ottawa's arrival on the mainstage is the fact that venture capital has grown from $1.5 million early in the 1990s to $1.3 billion last year. One of the continuing challenges we've had in OED is to estimate how much venture capital came to the city last year. We've had to revise our estimate virtually every two to three months. That's the kind of revision we like to make. We see this trend continuing. In fact, over that seven-year period, venture capital in the community increased by 88,000%. That's a ridiculous figure, but we came from a low figure to a very high figure. That represents over a quarter of Canada's venture capital in 2000, with less than 4% of our country's population.

That venture capital has come from many sources. It's come from local entrepreneurs, locally established companies, angel networks, high-net-worth individuals in our community and certainly from venture capital investors throughout Canada and the US and in some cases even Europe.

Compared to US cities, Ottawa's 1993 to 1999 growth of 88,000% compares to Austin's at 14,000%, Boston's at 1,400% and Atlanta's at 350%. The first three weeks of January this year saw more venture capital invested than in the entire year 1993.

Yesterday's economy was dependent on one industry in our community. In 1975, 35% of our labour force worked for the federal government. In 1995, federal downsizing turned our attention to the overnight appearance of the technology industry. In fact, it wasn't overnight; it had been building since the early 1970s.

As of this year, the technology sector has caught up to the government in terms of total number of employees in our community. The over 1,000 advanced-technology companies employ more than 79,000 people. Not only is the technology sector strong; it is also diversified. This leaves us much less vulnerable to hiccups in our economy than if it was concentrated in any one particular sector.

The advanced technology industry in Ottawa generates annual sales of C$17 billion. Ninety per cent of these products are exported outside Canada. The strengthening of all these sectors will strengthen Ottawa's economy and in turn Ontario's economy.

The federal government, traditionally the only industry upon which Ottawa's workforce depended, has now been joined by our technology sector. As you can see, the federal government used to provide work for some 35% of the workforce. This has declined to 17%. In stark contrast, the growth of the technology sector has gone from only 3% to almost 18%. This marks a significant shift in who is doing what around town.

Some context of where we're looking to see our growth continue: for decision-makers-the people we sell our products to, the people who help bring talent here to Ottawa, the people who invest in our companies-there are six top indicators to get a city on to their field of vision. They see the first item of importance as strong clusters of companies. This is where we're really starting to stand out in areas like photonics, telecom and others. A skilled workforce: we seem to have a skilled workforce, but I can tell you every technology company in town, including mine, is continuing to look for more people. They look for access to points around North America and the world and a strong academic community, and we're enormously proud of the institutions in our community, with Algonquin College, the University of Carleton, Ottawa U and other training institutes. They look for leadership in research, and we've had a strong history, a strong pedigree of that, but we always have to keep innovating. We can't stand still or we'll lose that positioning. And they look for a high quality of life.

The qualities and features that make Ottawa competitive include a diverse technology industry and a highly skilled workforce. We have leaders in research and innovation. Our quality of life is ranked superior to many places in the world. We have access to the federal government. We have an exceptionally affordable standard of living. And we're proud of our diverse cultures and languages.

In August 2000, the Ottawa Partnership, a co-operative effort between private and public agencies in Ottawa, tabled a report called A New Economic Vision for Ottawa. This report gave us a glimpse, for the first time, of our competitiveness as a global technology centre. The results have been taken a step further by our branding and marketing strategy, now nearing completion: branding and marketing to make our name, our products, our companies known throughout the world, particularly in the United States.

Each sector was examined individually and the main opportunities and challenges were identified. The reports show clearly that Ottawa must grab the attention of key US decision-makers; that's the litmus test of our success. This means we must partner with other leading-edge technology cities, and there is a set of US cities whose attributes are similar and complementary to Ottawa. You see those on the map beside us. They include San José, Austin and Dallas in Texas, Atlanta, Washington-the greater Washington area is a high-tech mecca-Raleigh-Durham and Boston. That's where we fly to every day. That's where we go on our sales missions. That's where we go looking for investors.

The better Ottawa's economy, the better Ontario's economy. The stronger our economy, the stronger the provincial economy.

The Conference Board of Canada predicts Ottawa will have the fastest-growing economy in Canada this year. We did that in 2000. Based on the estimates of new jobs in Ottawa over the last two years, the provincial government has received an additional $250 million in revenue, and this additional revenue continues year after year, growing and building on itself, one of the real social upsides of growth.

As well as we are doing, a community cannot take things for granted. Our prosperity and good fortune will not continue unless we continue to invest. We believe there are three potential threats we must answer together, and that's why we're delighted you're here in Ottawa today. Each must be addressed if we're to continue to foster growth, improve our efficiencies and encourage our competitiveness.

First, prima inter pares, is a skilled workforce. We together, but we in industry as well, must train, recruit and retain our pool of the best and the brightest in the world. We're doing that. It's hard work. We're investing in it. We're taking the time and money to do it, and we're not going to stop. We look for your co-operation in doing that.

The second is what we call business infrastructure. That includes everything from our roads that move people to the wires that move our information, the hospitals that serve our residents and the facilities that host our meetings, conventions, companies and visitors. Clearly, you can appreciate there's a very strong partnership role with the provincial government on this count.

We also need to look, in this area, at risk capital for our existing and future companies. Those three challenges-a skilled workforce, business infrastructure and risk capital-are the ingredients for continued success. That all fuels the entrepreneurial spirit that must be supported with real measures to support our private sector growth.

All this said, even with all the media attention Ottawa has received globally, in Canada and throughout Ontario in the last few years, we're still a hidden gem. Our profile is enormously less than our competitors in the United States. Our demographics are changing as our technology sector grows and our economy changes. We've got to communicate that. We must have a responsive and flexible education system. This needs to be the case at all levels: kindergarten to grade 12, colleges and universities, and continuing skills development. Ottawa must have an infrastructure building program that strategically responds to and invests in areas that will build our global competitiveness and maintain our quality of life.

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Our story must be told, and we're telling it. We need your help to tell it, and we need your help to keep writing that story.

Ottawa is an example of the returns that came from investment in the knowledge-based economy. This did not happen overnight. It has happened since the 1960s and 1970s. Denzil Doyle will tell you it happened in the 1960s and 1970s. Our story is a tremendous source of pride and an example of leadership and vision for Ontario. To drive forward the prosperity of Ottawa and of Ontario, the province must commit to investing in the growth of Ottawa. We cannot take Ottawa's success for granted. Over the next year, the Ottawa Economic Development Corp, on behalf of the business community, will continue to work with the city and the province to make both Ottawa and Ontario a leading economic force in the world.

I thank you for your time. Mike Darch and I will be pleased to answer questions. We're ready to speak to any of the matters we've raised, and we hope we can clarify issues you might have in your minds.

The Chair: Thank you very much. We have approximately five minutes per caucus, and we'll start with Mr Christopherson.

Mr Christopherson: Thank you for your very upbeat presentation. You're obviously very proud of your city and your community and of what you've achieved, and you should be.

As you know, it's not the business of the provincial government to promote any one community but to ensure there's a level playing field and to provide the overall infrastructure for all our communities-I'm from Hamilton.

I want to ask you-and certainly, Richard, I don't mean to centre Ottawa out in doing this; all of us have similar figures and similar situations. But I can't recall ever hearing anybody say 88,000%, and I've been sitting in on these kinds of hearings for quite some time. That's a phenomenal number. It says a lot about your community, and I tip my hat to you. However, that 88,000% increase-I believe it was in venture capital investment-stands beside 23% of the children in Ottawa who are in poverty.

I realize that's not your responsibility, although I'm sure you care as an individual; it's our responsibility at the senior level of government. Nonetheless we've all got to be in there together. I'd like your thoughts on how we can continue to see the one number grow, which is good, and the other number diminish, which is bad. What's your sense of that? How would you see your community approaching that and, probably more importantly for purposes of these hearings, how would you see the government of Ontario approaching both those things, recognizing there are not the dollars to do everything-and that includes tax cuts, I might emphasize-especially in a downturn. This budget will be set in the context of a tumbling economy-if not bottoming, at least tumbling. So your thoughts on that, sir?

Mr Henderson: I must speak from the perspective of our community. I'll leave to your better judgment to interpret what that means provincially.

We think growth fuels the ability for us to create jobs in a community. One of the reasons we create jobs for all spheres of society in this community, not just the high-tech sector but the sectors that serve them, the service sectors, is to continue our growth. Continuing our growth also generates tax revenue for the provincial, federal and local governments, and helps provide the funds needed for the other public services you referenced in terms of helping those who need help.

That's why we emphasize in our presentation that there are three ingredients of future growth. First, we've got to increase our talent. We've got to make sure those young people coming out get jobs, so they have the quality of life they would like to enjoy. Let's not forget that. We're certainly actively engaged as a business community with the education sector.

Second, we feel that business infrastructure is key. You've probably heard the story elsewhere, but we think the Ontario government's efforts over the last several years have improved our competitiveness by improving the fiscal climate. But now we've got to invest in our future too. The business infrastructure, in our view, is very important and may be one of the main areas we need to interact on.

Last, we need risk capital and the entrepreneurial spirit. We think we're doing that. We're OK there, but we ought to keep doing that. I can't say how we can specifically address the constituency you talked about, but I know that the way we can contribute to it is just to keep growing, generating tax revenue and creating jobs.

Mr Christopherson: If I can, though, my problem is, having heard that at the starting line, which was 1995 when the government made that argument, is one thing. But here we are into our sixth year of that very argument and only side of the equation is working. There are greater profits, greater investment is going on, our competition relative to our competitors is good. All those things are fine. But on the other side of the equation, it's not working. The revenue, even if it's being generated, is not going back into those areas of quality of life, and all those indicators are falling.

I don't want to be argumentative about it; I'm just trying to stimulate some debate. But it seems that one side of the equation has worked very well-you can't argue with that-at the expense of the other, and it's getting worse. If we continue more of the same, aren't we just going to continue to see an increase on one side and a decrease on the other? We've got six years of evidence to tell us how it works.

Mr Henderson: Briefly in response, I appreciate your point of view. We're going to speak from an economic development perspective-

Mr Christopherson: Absolutely.

Mr Henderson: -and I'll leave you and your colleagues to debate that provincially in terms of those public policy issues. I know the way we can contribute to that is to keep growing. How the benefits of that growth get shared, I think, is a public policy question beyond our mandate.

Mr Christopherson: Except that a lot of those things require-

The Chair: We've run out of time, Mr Christopherson.

Mr Christopherson: Thanks very much. I know they're difficult questions, and I appreciate your responses.

The Chair: Go ahead, Mr Arnott.

Mr Arnott: Congratulations on your success. There's a statement in last year's budget that I'm reading now to refresh my memory. It seems to me that we brought in favourable tax treatment for stock options for high-tech companies. That has been very beneficial in my riding of Waterloo-Wellington; I represent a big part of Waterloo region. Just briefly, how has that worked here? Has it helped? Do we need to do more of that? I'd like your response, and then Mr O'Toole has a question.

Mr Henderson: There's no doubt it's helped, as long as your stock is going in the right direction. There are challenges with that.

I think we've seen positive responses from both the federal and provincial governments on this issue in the last year. We're not sure how you place priority on perhaps accelerating that or giving further incentives. We haven't dealt with that issue extensively at OED, in terms of whether more needs to be done in that area. We do feel, and it seems to be a very strong consensus in our community, that perhaps we've got to make sure, in the things governments may do, that the business infrastructure issue may be a bigger bottleneck that's emerging in terms of growth. We don't think some of the softening in the economy is going to affect us that much. Our sector is a little bit insulated in that. We really want to make sure the business infrastructure issue is on the agenda.

Mr O'Toole: I also thank you for your presentation and comment on our economic and fiscal management. I want you to know that the Honourable Brian Coburn also recognizes Ottawa as the high-tech capital of Ontario, certainly with some dispute in-house from our member from Waterloo-Wellington.

The dilemma we're faced with-and the way you described it, I might suggest, was very well done-is how we convince the people of the conflict between growing the economy so that you have the resources. That's a longer-term view of how you deal not just with policy but with the whole human capital versus working capital argument. I know you've numbered a couple of strategic things like clustering and academic infrastructure. But we hear-and just heard in the previous presentation-of the human infrastructure piece and having that quality of life you described as a pressing thing. On one hand, it's gratuitous in the short term to deal with housing issues and those things, and I know they're important. At the same time, without a strong economy you cannot have the strong quality of life issues, in our view.

In evidence to that, we had 10 years when, not in a political sense but for a lot of economic reasons, the whole revenue side just fell apart, and naturally all the other programs-not just the social contract-were in peril. How do you deal with it? We're in a no different situation. I suspect that competing conflict of things like capital tax is a penalty in Ontario. Minister Eves and Minister Flaherty have issued it. It makes you less competitive, and the microsystems all move to your competitors because we're not competitive in the global economy.

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I want you to understand that we understand your dilemma, but the message for me personally as an elected person in the riding of Durham is to say that we're not ignorant of the human challenge. In fact, whether it's the daycare issue, the homeless issue, the child poverty issue-all those issues-it sounds like we don't care. In fact, I think it's more difficult to make the commitments to build that human and knowledge infrastructure so we have the economy that we've become accustomed to. Have I got this right? I'm not just asking you a question, but in the response is there something we can do?

Mr Michael Darch: From our perspective, Ottawa was very fortunate from the point of view of having the federal government presence, as well as the presence of major federal labs etc. As you probably know, we have the highest-educated workforce in Canada. There is little question that our success in the new economy can be traced back to the success of our skilled labour force and the depth and the maturity of our skilled labour force. We certainly keep working hard to drive that forward.

The unfortunate thing is that, unlike minerals in the ground and trees in the forest, people can move. One of our biggest problems is maintaining that human capital and keeping that human capital here. We believe our success in nurturing our human capital and keeping it here is generating tax revenue, which helps us deal with the other issues. Our findings in our branding and marketing study, which we're just completing, show that things like clusters of companies and a skilled labour force are a sort of checklist that if you don't have, people don't consider you.

Once you're into the big leagues, and we believe-you'll notice on that map there are no Canadian cities; we're competing heavily against US cities. If you lose a job in Ottawa, it doesn't go to Toronto, it doesn't go to Durham, it doesn't go to Waterloo; it goes to Raleigh, Atlanta etc. The thing that gives us our critical difference when we compete against them, when we meet the skilled labour requirement etc, is quality of life.

The Chair: Thank you very much.

Mr Kwinter: I'd like to just follow up on that point. In your presentation, you talked about doing a $70-billion business-

Mr Henderson: One seven, $17 billion.

Mr Kwinter: It's one seven?

Mr Henderson: Yes.

Mr Kwinter: -and 90% of that is export. Where is the bulk of that 90% going? The United States?

Mr Henderson: By far the bulk. Mike, any specific figures on exports?

Mr Darch: I don't know the figures exactly, but by far the bulk goes into the US.

Mr Kwinter: Overall in Canada, that goes across all industries; 90% of our exports go to the United States.

The point I'm trying to get your reaction to-and when you're talking about the support you need, when I was the minister, we had a trade office in Boston, New York, Chicago, Atlanta, Dallas and Los Angeles. What they did is, they would extol the virtues of what we had to sell in Canada, as well as try to get investment from those jurisdictions. We don't have any of those any more, notwithstanding it's by far our biggest market, and yet we have several US states that have offices here. They're out competing against you in your marketplace and we're not really competing against them in their marketplace, other than the business that individual companies get. Do you have any feelings about that?

Mr Henderson: We haven't found a major obstacle in getting our message of marketing on companies to the US so far. We've grown, but we've got to go to the next level. We also think that needs to be business led. That's one of the reasons companies in our community have invested heavily in the branding and marketing work we're doing. I'm sure trade offices would contribute to that in part.

Where the business community is expressing to us is the bigger obstacle to growth is in not making sure we convey our message outside by making sure we have a winning conditions message to convey. You can brand and market all you want, but if you don't have a good story to tell, the slogans and the catchwords will be exposed for what they are. The way OED has looked at the world is to say you need concrete winning conditions, those quality of life issues, the good transportation, the good education, the good workforce, and you need to have the substance and do the sizzle and the sell. We've really focused on both points, making sure we do that and working with you and other governments to make sure our winning conditions respond to the demands we're facing.

The Chair: Mr Patten.

Mr Patten: I know your story well. I live here and I meet a lot of you and your colleagues. It's quite a story. I'd like to see somebody do some historical documentation of this, because some of the people, going all the way back to the early 1960s and 1970s, can tell quite a story.

I have two quick things. In my opinion, frankly, it's important to market, of course, what we have going here. I think that's something that is unique and something people don't consider certainly in the technology field, the diversity and depth of the full range of supportive services around this, legal services and connections around the world and this sort of thing, which have helped tremendously. The other is the sort of critical mass of R&D. Even though it had diminished for a while, I think it's grown somewhat now and that's gone through. I would even say historically the role of the provincial government in the early days of the innovation fund was to help with some venture capital when none of the private banks would provide very much. Some of your colleagues have mentioned that to me.

But at the end of the day, I don't think we're ever going to be able to compete with those American cities on a tax basis. We can always try to stay within striking distance, but I don't think we're ever going to do that. To push that one to its ultimate conclusion, in my opinion, is not going to work. It will come down to, I believe, quality of life. In other words, at the end of the day, you say your number one resource is going to be skilled labour.

The one example my colleague Mr Christopherson mentioned before, and I would just identify, is that the Irish experience is showing that when you put out a clarion call to those who are unemployed, to those who may have been disabled, to those who aren't skilled, to those who need some training, to those who can't afford to go to school, and say, "We need everybody in this economy to participate," they're having a fantastic, absolutely amazing response in the sense of what's coming together in Ireland today. It's a magnificent story. I would suggest maybe there are some learnings for us in that particular area.

I'm also delighted that the people in your area participate in some of the other social areas: our school infrastructure, our road infrastructure, our hospital infrastructure and this sort of thing. I look at us broadening it out. While you say, "We're here just from the economic point of view," knowing you as I know you, I know your concept is really broader than that, would you not say?

Mr Henderson: Just a short answer, Mr Patten, and then I want to turn to Mike to comment about the US situation in terms of our competitors. Certainly as a business community, we feel the quality of life is key, the human resources are key and our definition is broad. We feel we have leadership roles to play in some of those areas of quality of life and supportive roles in others. Most certainly the business community here is a very active one, as you know. Like a lot of the communities that others of you are from, it's got to be teamwork.

But the issue of the comparison with the US is one we've got to keep in mind. Mike, comments there?

Mr Darch: My understanding is we have to get somewhere within 10% to 20% striking range. If we can get to within that level, we start becoming competitive and then it moves over to our quality of life etc. The trouble with quality of life issues is, it's difficult to define the quality of life. Given the shortage of labour we have in Ottawa at the moment, the Irish experience of turning every available body into the workforce would certainly help.

Briefly responding to Mr Kwinter's question about Ontario in the US, the only thing I would mention on that is that location decisions and people moving are very much related to a region these days as opposed to provincial or Canada. Therefore, if you're looking to assistance-places like Ottawa-we feel that assistance to Ottawa going out and competing against the cities we compete against in the US is much more useful than a broader Ontario comparison which, by definition, has to address all areas of the country. We wouldn't compete in certain areas of the economy, such as automotive, steel etc, but we remain very competitive in the clusters we've discussed.

The Chair: I have to bring this to an end, as we've run out of time. On behalf of the committee, thank you very much for your presentation this afternoon.

A quick announcement before we invite the next group. For the staff and the members, the transportation to the airport will be leaving in front of the hotel at 6 o'clock this evening.

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TASK FORCE ON POVERTY IN OTTAWA-CARLETON

The Chair: Our next presentation is from People First: Ottawa Action on Poverty. Could you please come forward and state your name for the record. On behalf of the committee, welcome. You have 30 minutes for your presentation this afternoon.

Mr Cliff Gazee: Good afternoon. It's a pleasure to have an opportunity to share with this committee some of the wonderful work we've been doing in our community, in the hope that it may give some guidance as to how we can approach some of the major problems facing not just this city but the province as well.

I'm Cliff Gazee. I co-chaired the Task Force on Poverty here in Ottawa-Carleton and I currently co-chair a steering committee which is preparing for a permanent advisory committee on poverty to work with the local municipal government. With me today are Candice Beale and Terrie Meehan. I'll first ask Candice to make her presentation, followed by Terrie, and then I'll try and do a wrap-up.

Ms Candice Beale: Hi. I'm Candice Beale. I'm a former member of the Task Force on Poverty, a current member of the interim committee of the Ottawa Action on Poverty, chairman of the Poverty Awareness Week committee, and I've conducted parenting and poverty classes in the Centretown Community Health Centre.

The first thing I'd like to speak about is subsidized daycare. One of the recommendations of the Task Force on Poverty is that more space has to be made available. Subsidized daycare is vital to many families all across the province. Families with low incomes depend on being able to access quality child care, care that is regulated by the Day Nurseries Act, in order to maintain employment. Informal care is what most of these families must rely on as it is all they can afford. Since informal care is not regulated, people have come to feel that they are gambling with their children's lives and sacrificing the quality of their child's early education.

No one can be expected to perform optimally at their job when concerns for their children such as the ones I've mentioned are pressing on their minds. Thousands of these families qualify for subsidized child care. However, there are simply no spaces available. In fact, no new spaces have been created for far too long.

Subsidized child care is jointly funded between the province and the city. The region of Ottawa-Carleton did its part. They set aside the money to cover their share of the cost of these spaces long ago, but they could go no further without the approval of and funding from the province. It is now long past time the province of Ontario stepped up and did its share. Parents are desperate for more subsidized spaces, and the province can no longer afford to deny parents these crucial spaces. Access to daycare, quality daycare, directly impacts the workforce. If the province wants to keep Ontarians working, then it needs to make that possible by providing its share of the funding for these subsidized child care spaces.

The other thing I would like to speak about is the social assistance rates. In 1995 the amount of money that people on social assistance received was cut by 21%. This hurt recipients far more than the province realized. However, since the cut took place, the cost of living in Ontario has risen dramatically, yet the amount given to people to cover these costs has not. The numbers used by the province to calculate how much money a person needs to survive on are no longer valid.

The price of food has risen dramatically and the bargains we were told to look for no longer exist, thus making it impossible to provide adequate nutritious food for our families. This lack of proper food compromises the health of recipients, which will eventually lead to higher health care costs for the province, meaning that failing to provide sufficient money to those on social assistance provides no monetary savings in the long run.

The same holds true for shelter. With a less than 1% vacancy rate in Ottawa, affordable housing is almost non-existent. Landlords know that people are almost desperate for any housing, so they can charge whatever rent they want and someone will pay it, putting most housing out of the financial reach of social assistance recipients. A staggering number of recipients have found themselves living in shelters. It costs far more to house a family in a shelter than it costs to simply provide an adequate shelter allowance, thus allowing families to remain in far more cost-effective private residences; not to mention it's easier to find a job, go to school or volunteer when you have a home.

In addition, the cost of maintaining that home has risen drastically. Heating costs having risen so much that the federal government felt it had to step in. However, the help they provided was just a drop in the bucket when a whole year of expenses is considered. These are but a few examples.

The cost of living has risen dramatically across the board; social assistance rates have not. People, families especially, can no longer adequately cover their basic needs given what they currently receive. A cost-of-living adjustment must be made and the amount those on social assistance receive must be increased accordingly.

Ms Terrie Meehan: Hi. I'm a bit nervous and I have a speech problem, so please bear with me.

I'm also talking on child poverty and housing; I believe they're related. If you can't afford basic needs for your child because you're paying for inadequate housing, then basically your child is going to grow up and the cycle is going to continue.

I'm a single parent of three. I'm disabled. I'm also a volunteer at CERA who weekly sees hundreds of people being evicted for not being able to afford their housing. I'm a volunteer at National Capital Freenet; that's how I can afford to go look out on the world. I'm also a volunteer at Home Safe where we're seeing the people who can't afford their housing. We're seeing a drastic increase, especially with the layoffs from the companies that are downsizing, and we're looking to see some support from the province-or I'm looking to see some support from the province for the people who just can't afford to go anywhere else.

I've sort of screwed up my speech, so I'll hand it off to Cliff.

Mr Gazee: Just to go back to give a little context of who we are as a group and what we've been involved in over the past couple of years, back in October, November 1998, there were five sets of hearings held across the region of Ottawa-Carleton bringing together people living in poverty to share their situations and how they were coping with cutbacks that they had to face and a more difficult climate. The intent of those hearings was for people to identify problems and to propose solutions so that we can look at how we can remove some of the barriers that are preventing people from participating fully in the life and the economy of this province.

We developed a set of recommendations which went to council and which highlighted particular areas of concern, whether it be child care, housing, transportation, the cost of utilities, educational opportunities. There were about 10 areas. The final area in our recommendations was the need to create a task force to address some of the issues that we had identified and come up with some creative solutions to the problems that we had discovered in our community.

We presented our final report in February 2000, and the city council, or the regional council at that point, accepted part of that report, the idea that they would create a permanent advisory body that would bring people living in poverty to work with local government and local officials to look at all of those areas where the system is not working the way it should and where basically nobody is getting the best bang for their buck.

I would say the work of the task force has contributed significantly to the reduced caseload that's been tossed around in the media as of late, which brings to mind the impact of the current dispute over transitional costs and how they will affect the local economy. I can say unequivocally that, yes, we may not get new buildings, may not get new infrastructure, but the bottom line is that those people at the bottom of the economic spectrum will suffer more than they've been suffering in the past unless this situation is resolved. I think it's time for both the city and the province to back off a little bit and it's time to come up with a reasonable solution that will meet everybody's needs so that we don't create greater economic problems in our community.

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Among the areas in our final report that we felt needed to be addressed, not just at the local level but at the provincial level-and in fact some of them at the federal level-is the need to increase the basic rates to ensure that everybody can have an adequate diet, that everybody has adequate housing and that all basic utilities are covered. There is a need to infuse some new money to ensure that people have money for hydro and telephone etc. I think one of the strange things for me is that we're living in a society now where I've got kids who are going to school, young people walking around with cellphones, pagers, and then there are people in our community who have problems: their child gets sick in the middle of the night and they're running down the street looking for a quarter to go to a payphone to phone for an emergency. I think that's the equivalent of having outdoor plumbing in a society as modern as our own.

It's an issue that must be addressed because as long as people cannot communicate, they cannot get phone calls to say they're being offered a job or a training opportunity, they're cut out of the loop. We need to ensure that everybody is in the loop so that, at some point somewhere down the road, they can become active, employed people and can, in fact, become contributors to the tax base as opposed to a drain on it. I think that's very much what most people living in poverty would rather be doing than being-how would you say?-the pariahs of society.

Transportation is another very important issue. Our city now stretches from east to west 192 km, I believe, and all of our industries are diversified all over this area. If we want people to be able to participate in that economy, to take jobs and to become self-sufficient, we have to ensure that people can get from point A to point B. I've noticed that at one point there used to be provided bus passes for everybody and that at another point down the line, when that was cut out, all of the second-hand stores, like Neighbourhood Services and Salvation Army, didn't seem to have enough clientele to maintain their resources, and they're supposed to be there to serve the poor. But the fact is-and I've experienced it myself-that if you've got to go find a pair of boots for your kid, and you've got to jump on a bus that's going to cost you $3 there, and back and you get there and you can't find what you need, then you've wasted that money. So a lot of people stopped using those services.

Working on the transportation subcommittee, I have done some research on jurisdictions in the States, and transportation-the people who are barred from participating because of a lack of transportation-represented the highest single barrier to people on social assistance being able to access jobs or training. That figure was somewhere in the range of 47% or 48% of a barrier. In contrast, people who were identified as having drug or alcohol addictions in fact only represented about 2% of the population who considered that problem a barrier. So it may be time to redirect our energies in terms of where are the barriers and how can we remove the most significant barriers and place a little less emphasis on barriers which are minuscule in their import.

Child care is extremely important because for single parents particularly to leave their homes and go off to work they have to be assured that their children are going to be safe and that they'll be well cared for. With the growing economy in our community, there is lots of opportunity for night work and for shift work and there is no flexible child care for evenings and nights. For those people who can, for example, do child care in their home, the only people who can access that are people with disabilities. At this point, people need to be able to leave their children at home. They can't be uprooting their children and putting them in a daycare and picking them up at 6 or 7 o'clock in the morning when they get off work. That's not a viable option. So there is the need for changes in that system so that home daycare and subsidized home daycare will be available to people who need it.

Education is another big area. A lot of people have difficulty accessing the education system. There is difficulty acquiring enough money in order to become part of the education system. There is a need that benefits be allowed for people who are studying, at least for their first post-secondary degree. This is an opportunity to move people up and along and off the system. As well, a student loan should not be considered as income for determining eligibility. This puts the student at an unfair disadvantage compared to other students and it puts the possibility of failure much higher for that individual. The other area in education is the need to reinstate subsidies for special-needs children.

Affordable housing is a major, major problem in this community, as was alluded to. As long as our vacancy rate is somewhere at 0.2%, which is a ridiculous amount, and we have people flooding into the city for high-tech jobs who are living in hotels and God knows where, and who can afford to come along and bump up the rates-I've heard stories where an apartment would be available and somebody in that category of a new employee would come in and say, "I'll offer you X amount more than you're asking for that apartment," and automatically those people who are on lower incomes are being forced out of the housing market. The end result of that is greater degrees of homelessness. I know that problem of homelessness is like apple pie and motherhood, but the reality is that it's a very real problem. There are people dying in increased numbers on the streets here in Ottawa. I know it's happening in Toronto and in other jurisdictions across the province, as well as other cities across Canada, because first of all the feds bailed out and then the province bailed out and now the issue of affordable housing has been dumped down on to the area that may be least able to afford it.

Those homeless who are dying on the streets of our city are actually telling us something. They play a very valuable role. You may remember that a long time ago when coal miners were going down into the shaft, they always had canaries that they would put down there to see how toxic it was, and if the canary started to die, they knew there was something wrong and they wouldn't send their crews down into the mine. Those homeless who are dying on our streets are the canaries of our society who are in fact telling us there is something toxically wrong in our society that needs to be addressed. Those people who were born in Canada or came to Canada with great hope of how they could contribute have been given the shaft in more ways than one.

I think one of the problems we see in the debates that have gone on is the polarization between left and right or one side and the other, and my observation about people's beliefs and what they think is right is that everybody actually has a kernel of truth. There is nobody who is entirely wrong. Some people have a bushel of truth and some people have a little bit of truth, but I think the biggest mistake comes when somebody assumes that the pile of kernels of truth they've got in their hand represents all the truth there is to have and that their opponents have no truth whatsoever. I think it's important that we see what truths are coming out of the mouths of the people who, on the surface, we may not necessarily agree with.

The analogy in my mind is that it's like a bird and the poor are the hungry belly of the bird. What we often are seeing in our society-and the poor are powerless to influence this process-is that the left wing of the bird is trying to decide it's the wing to fly this bird, the right wing is doing the same thing, and in the meantime there is no harmony. We as a community and as a society must realize that to get that bird off the ground we have to be working in harmony and that it's a symbiotic process. We are mutually dependent. Whether it be labour and management, whether it be rich and poor, we all have a role to play that balances each other off to make our lives as a community more successful, more profitable, with fewer people marginalized, fewer people dying on our streets, and so that more people have an opportunity to contribute to the greatness of this country.

At this point, I could entertain any questions, if there are any.

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The Chair: Thank you very much. We have approximately two minutes per caucus, and we have to make it tight. I'll start with the government side.

Mr Galt: Thank you for your presentation, and congratulations on the task force on poverty that you've worked on. I hope I can leave a little time for you to explain to me your definition of poverty and what level that comes to.

I just want to explain a few things about what we've been doing and give you some background. The big thrust of our government has been to create jobs. We're up to almost a million jobs, something like 844,000 net new jobs. A lot of people who were on welfare now have permanent jobs. Some have immigrated-come back to our country. But sometimes it doesn't matter how much you give, there's always more to be asked for. Certainly a previous Premier of this province, Bob Rae, said that many times. Sometimes it's difficult to know just what level to plug in.

Right now, according to the National Council on Welfare, we are 34.7% above the average for our welfare payments in Ontario. That's significantly higher than other provinces. Does that make us right? Not necessarily, but I just want to bring that out in comparison.

A couple of programs: there's Healthy Babies, Healthy Children that we're putting something like $67 million into annually, the Better Beginnings, Better Futures program, some $772 million being put into welfare services for children's aid societies to do more for children, just to name a few of the programs we're involved in.

I'd like to save a bit of time for you to explain to me, especially with your task force, where you draw the line as to poverty. I've lived in a Third World country and travelled in others, and I've seen phenomenal poverty. I wonder how you define poverty in Ontario.

Mr Gazee: I've travelled in Third World countries also, and I've seen the most desperate levels of poverty, levels of poverty I haven't seen here. However, I think one of the problems is that poverty becomes a psychological phenomenon for people. When my kid goes from a community school where everybody is at the same socio-economic level to a high school where everybody is running around with cell phones, and they drive in, in their cars and have the best-labelled clothing, those children eventually start to feel, "This is not where I belong."

The disparities are how poverty is mentioned. It's when people are denied what's going on around them and they're left out of the loop. That's how I define poverty. I know there's a lot of debate about low-income cut-off points, and I'm not even prepared to go there. I've seen poverty in these communities, I've seen suffering and I've seen people die on the streets. You mentioned the CAS. There are many parents who feel they just can no longer cope. In my own community, people have had to give up their children to CAS because they can no longer afford them. I would say that's poverty. It doesn't compare with what I saw in Guatemala or Nicaragua, but yes, there's poverty. I don't think it does us any good to make comparisons against other countries, because we are Canadians. We're living in an environment that looks like this and doesn't resemble the streets of Guatemala.

The Chair: The official opposition. Mr Patten.

Mr Patten: Thank you, Cliff, Terrie and Candice, for coming today. I know of your task force. I've participated in some of the consultations, and I commend you for your stick-to-it-iveness for the more than months and weeks-the years-you've spent addressing the people who are not quite as fortunate in our community. Your task force will now become a permanent task force.

I ask you whether you've dug into this as a general question. You can see the debate: we say the government is not doing enough, and the government says, "We've got this, we've got Better Beginnings, we've got this program, we've got that program." They've thrown out about 25 different little pieces of programs that in and of themselves are not bad programs. It seems to me that part of the problem is that at any juncture where there is an opportunity to get ahead, whether it's a single mother who is trying to go to university but needs to get some daycare subsidy and can't get it and therefore can't go-that's where the government, it seems to me, pushes and tries to squeeze and resist what they call "abuse." In the bargain, though, in my opinion, it discourages people and it actually blocks people from getting where they want to be and where I think the government would want them to be.

I'd like your candid reactions to that. I'm not suggesting just throwing everything wide open. All I'm saying is that there are a number of blocks in the system that are there because the government keeps obsessively talking about this welfare abuse that, in my opinion, does not exist. It certainly doesn't exist as it might in other sectors. If it does exist, it's very, very small and very, very minor. Would you have a comment on that?

Mr Gazee: Yes, I agree that there are lots of good programs that are being put in place, but I think the problem is where the programs don't exist, where there are barriers that are not being addressed, that keep that single mother from acquiring the education that moves them on down the line to become a more contributing person. Those things have to be looked at, and they have to be looked at dispassionately and without looking at, "What's the ulterior motive here?" I think we're caught up too much in motives and who's right and who's wrong, when the reality just needs to be fixed. I believe Candice wanted to add something on that as well.

Ms Beale: I just wanted to make a quick comment about the government's claim of programs. The percentage of people who actually access these programs or even have use for these programs-better, healthy babies: fine, if you have a baby. If you have a teenager, that program is useless to you. I think if you checked, you would find that the number of people who are actually accessing these programs is a lot smaller than the government would like you to believe. Frankly, we would all be better off if you would stop inventing programs for us, ask us what we really need and perhaps just give us the money on our welfare cheques so that we can actually buy groceries. Because a better babies program is a wonderful thing, but if you can't eat your breakfast before you go to this program, the program really doesn't do what it needs to do.

Mr Christopherson: A very sobering report; thank you for taking the time. One observation and one short question.

Observation: you mentioned the bus pass program. It came to my mind immediately that back in the 1980s, when I was on Hamilton city council, we had a discount to the bus pass program to help the unemployed. It was expensive but it provided them with the transportation and all the obvious things that I don't need to tell you. It was interesting: the sort of, I'll call them the right-wing group, for lack of a better label, decided that this had to go. They made all the arguments about all the things that could be done with that money, much like those who come in and say, "If we paid off the debt, we'd have all kinds of money that we wouldn't be spending servicing the debt to do this and this and this and this." But what's interesting is the reality was that once the program was gutted-because they got enough votes to do it; they killed the program-they voted en bloc against every initiative to then spend that money elsewhere as they had argued would be the ideal situation, since it was just this program they didn't like, not the idea that it would go there. I think it's something for all of us to keep in the back of our minds when we hear folks talking about what percentage of our expenditures is going to service the debt. They say, "Eliminate the debt; there's all this money." Oftentimes, if they still control it at that time, it doesn't go to all the things they said; it goes into things that benefit those who already are doing quite well, thank you.

I want to ask one question: at the end of the day your goal, obviously, is to move the government, to get something done. I'd like to say to you that if we could tap into the hearts of everybody, that would be enough to do it. But my experience in public life tells me that's not the case. It takes more than that. I'm talking about the public now, reaching the public. Self-interest is human nature. Have you got any evidence that shows that the growing numbers of people in poverty are clearly-they are, but have you got the evidence that shows that there are middle-class or middle-income families that are sliding, and that for those who aren't in poverty, you have reason, even if it's just self-interest, to care about this? Can you just give us a little of your experience on that?

Mr Gazee: I'm a case in point, possibly; we could put it that way. I was well employed with CBC Radio until the program that I was working on was cancelled. Subsequent to that my wife was killed and I was left with a two-year-old daughter and a nine-year-old son at that point. Anyway, all of a sudden I found myself in a situation where although I was doing quite well at one point, it was a slide. It was a continual slide to try and keep up with things, and I found myself eventually standing in a line of a food bank, looking for services at the local community health centre, getting involved in things like that. I know that I'm not the only one.

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There's a saying within the community that almost everybody is just one or two paycheques away from the food bank. The turnaround can be so fast and we can see it. We've got so many people being laid off. At one point, all of a sudden there's a big hiring binge here in Ottawa; the next thing you know, you've got people out on the streets. There's no security for anyone at any level of the stratosphere and for people involved in this fight, it's not generational poverty in all cases; it's cases of situations where people have slipped or pushed or eventually slid into a situation of poverty. That's a loss. Those are human resources that are being lost to the overall economy of this community. "Economy" comes from the word "ecology" and they're all related, and we're all part of the environment. We can contribute or else we can be just scattered and wasted on the rocks as so much human garbage.

The Chair: With that, I'll have to bring this to an end because we've run out of time. On behalf of the committee, thank you very much for your presentation this afternoon.

Mr Gazee: Thank you for the opportunity. It's been a pleasure.

CANADIAN CHEMICAL PRODUCERS' ASSOCIATION

The Chair: Our next presentation this afternoon is from the Canadian Chemical Producers' Association, so I would ask the presenter to come forward and state your name for the record. On behalf of the committee, welcome, and you have 30 minutes for your presentation this afternoon.

Mr Richard Paton: My name is Richard Paton. I'm the president of the Canadian Chemical Producers' Association, and I have with me a number of representatives of our association and various companies. To my left here is Mike Hyde with Dow Chemical; further to my left is Dave Podruzny who's with the association in the economics role; and our regional director for Ontario, Norm Huebel.

Thank you very much for the opportunity to speak with you today. The subject I'll be talking about is quite different from the last subject you heard, so I must say you must have a tremendous range of types of presentations. If you'll permit me, I'll go into the more industrial part of this fine province. I'm going to talk a little bit about the nature of our industry and its importance to Ontario, and then I'm going to focus on the three most significant issues that we would like to address in this budget. I'll probably speak for about half the amount of time that we have allocated and we'd be happy to hear questions.

You have a presentation in front of you with this little chart. The reason we use that chart is to give a bit of any idea of how our chemical industry fits into the province of Ontario. We call our industry a keystone industry because you can see how it relates to the resource base of the province, such as forestry, wood, paper, agriculture, mining, metals, also the petroleum industry, natural gas industry.

The chemical industry is largely focused on the chemistry process of transforming products from a resource base to consumer products for Canadians, such as plastics, rubber, food and beverages, the cars you drive, many of the products that are in your homes and many of the construction materials that we use such as insulation in houses etc. That's the nature of our industry and it's a critical industry to any industrial economy.

If you look at our industry, we're the third-largest manufacturing industry in the province. We have around $7.5 billion to $8 billion in sales in the province. Our industry employs about 45,000 people if you include the more general chemical industry. Our industry is very productive. There has been a lot of talk about productivity, a concern that maybe Canada is not quite as productive as the United States. We've done an independent study with Industry Canada on this and we found that we're one third more productive than the United States. In fact, we're the highest, most productive of all the G8 countries.

Notwithstanding that productivity and the importance of the chemical industry to the economy, we feel we're still not getting our share of investment in this province. There's about $40 billion of investment, North America-wide, in the chemical industry going on at any given time, and we feel that, given our productivity level and our access to a huge, 120-million-person market within a one-day trucking drive to those markets, we should be getting about 10% of that investment, or about $4 billion a year as a country, or about half of that for Ontario, which would be around $2 billion.

But we're not getting that kind of investment for all kinds of reasons. I know the chairman has been involved in some of the issues related to those reasons, and we feel that Ontario could be much better positioned if we got a number of issues dealt with that would help us increase that investment.

Mr Patten: Can I just ask you a question? What's your level of investment now?

Mr Paton: That's a good question. It's probably around $200 million or $300 million a year.

Mr Dave Podruzny: The total in the sector was almost $1 billion last year in all investments-that included repair-in Ontario, but it's still well under what we would have projected as a target, which is $2 billion.

Mr Paton: We're at about 50% and we'd like to be at 100%.

Mr Podruzny: Our sector, the industrial chemical side of that, is about $650 million.

Mr Paton: With your packages you have this scorecard. This is the third time I've been in front of your committee and I've noticed that every time I come, the scorecard is well appreciated because it's one of those nice documents where you can quickly understand what's going on, see the pluses and the minuses and the neutrals. I'm not going to discuss the scorecard in detail, but you'll notice the way it's set up it shows you where we are in a plus position vis-à-vis other jurisdictions that we compete against for investment, where we're in a neutral position and where we're in a negative position.

We tend to be in a negative position in areas such as access to feedstock. The critical mass of our manufacturing industry, if you compare, say, Sarnia to Houston, for example, it's quite a difference in critical mass. Energy costs are increasingly becoming an issue; construction costs have also been an issue and remain an issue.

In past presentations we've focused on areas such as construction costs, electricity deregulation and other areas. Today I'm going to focus largely on three issues that all relate to the question of investment, which is our number one priority. These three issues are the Ontario retail sales tax, cost recovery and tax competitiveness.

Why are we talking to you about the Ontario retail sales tax? I assume that sales tax is always a problem for just about everybody, but why is it a problem for us in the chemical industry? It's kind of a unique problem. Until last year, CCPA member companies and their contractors had thought it was clear that reinforced concrete, which is integral to the production process in construction, was exempt from the Ontario retail sales tax. However, recent reassessments of projects by the Ministry of Finance auditors have subjected this reinforced concrete to the sales tax. The reassessments are significant. They add up to 0.5% to the capital cost of chemical industry projects. Most of our projects are in the $200-million, $300-million, $500-million range. So if you start adding 0.5%, that doesn't sound like much to a $10 bill, but if you add it to $300 million, it can be a lot of money, or a portion of that project, because that is the portion that would be reinforced concrete. That small amount adds significant enough costs to actually start making projects less competitive when compared to other locations.

As a result of that problem, CCPA and a Sarnia construction association which represents contracts in the Sarnia area are asking the standing committee to confirm that reinforced concrete, which is integral to production, is indeed exempt from the ORST. We've been advised by the Ministry of Finance staff that this confirmation must be provided in the provincial budget. The staff cannot provide that confirmation themselves; they can, however, explain to the standing committee exactly what is required in order to provide that confirmation. Once the confirmation has been made, CCPA and the SCA can work with ministry staff to see that the appropriate categories of reinforced concrete are correctly incorporated into the auditor's guidelines.

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We've been working with the ministry staff to develop the costs and benefits associated with providing that confirmation. Again, that information is available from the ministry staff. I guess we're requesting you to look at this issue and, in the budget or your recommendations to the Minister of Finance, signal the intention of this government to make the changes to the regulation and guides that would indicate that reinforced concrete, which is integral to manufacturing and equipment, is ORST-exempt.

In this case, there might be some question of, is this going to be a loss of government revenue? Because the reinforced concrete is normally part of new construction, and if investments are not made or able to be made in the province, then in fact there will be no revenue from sales tax. So it's not a win-lose situation; it can be a win-win situation.

The second issue is cost recovery. When governments get short of resources, and we've seen that at the federal level, there's a big tendency for departments to search out new ways to replenish that revenue, and the end result is often for departments to seek out cost-recovery opportunities. This has been the tendency in the Ontario government. Some people would argue this is a tax under another name, a hidden tax or another way to approach taxation. Some would argue that it's right because there's a private benefit involved and the private sector should be paying for that private benefit. We have been working with the Ministry of Finance, Management Board and others to put in place principles and criteria and an implementation procedure which would ensure that cost-recovery initiatives are developed and implemented fairly. So we're not opposed to cost recovery per se, but we definitely have a lot of difficulty with cost recovery that doesn't seem to be linked to either a service or an improvement or even very clearly to a public-private benefit issue.

We recommend that an ad hoc working team of industry and government be established to accomplish this, and we would appreciate the support of the standing committee on this issue.

I should just note, as an aside, that I've been involved at the federal level in this issue. There is a cost-recovery coalition of about 15 associations working on reviewing the cost-recovery policies of the federal government. The parliamentary committee on finance has done a complete report on cost recovery at the federal level, criticizing it very heavily for its inappropriate implementation. So this kind of issue can easily snowball and get out of hand and cause governments a lot of difficulties. It's definitely in everyone's interest to get good, clear policies upfront and then to provide the guidance as necessary for departments to work on cost recovery.

The final issue I want to raise is improvements in tax competitiveness. The Ontario government is to be congratulated on the corporate tax reductions announced in its 2000 budget. This was a significant move to achieve corporate tax advantage. As quickly as fiscally prudent, we urge Ontario to accelerate its announced reductions to the corporate income tax. When fully implemented, it will open up a clear advantage with our competition in other jurisdictions. This will make a difference and provide key and necessary ammunition to retain existing facilities and to win new investments.

We also believe that it will be useful if the Ontario government opens up a dialogue with the federal government to consider the future elimination of what we call profit-insensitive capital taxes. CCPA recognizes a limited scope for further tax reductions in the short term, certainly in the uncertain economy that we're facing now, but we urge both levels of government to revisit this form of corporate taxation. Any substantial reduction or elimination of this fixed tax will be bound to support investment in the newest and best technologies.

The reason we're focusing on capital tax is that you'll hear many ministers, especially ministers in the federal government, talk about how important productivity is, how we need to be better at innovation, how we need to make more investments in capital, and yet when you start looking at how we reward investment and how we penalize investment, in fact it's the opposite signal that we give to the private sector. I think, Dave, you may want to talk about that sometime, but if you're building a chemical plant in the United States, you're writing it off in five years. If you're building it in Canada, you're writing it off in 10 years. If you start looking at an investment of $300 million and then you say, "Gee, I wonder why the investment's not coming to Canada," it's pretty simple. It's just a little bit of math, and you can figure it out pretty fast. So while the country keeps talking about productivity and investment and innovation, it's also taxing the very capital that drives innovation, investment and productivity. At some point in time, both provinces and federal governments have to deal with this issue.

In summary, we in the chemical industry are engaged in the serious business of working to win investments for Ontario. As you all know, we are a global industry, probably one of the most global industries in the world. We compete for investments with other key jurisdictions, especially the Texas, Louisiana and Gulf Coast areas. We have many advantages as a province, as you can see from the scorecard, but there are some areas that still stand in the way and limit our ability to attract investment. If we addressed some of these issues, we'd definitely be in a lot better position to be able to win investments, which means winning jobs, which means investing in communities, and which means better revenues for the Ontario government. Everybody's going to win.

The Vice-Chair: Thank you very much for your presentation. We have about two and a half minutes per caucus, and we'll start with the official opposition.

Mr Kwinter: I was interested to see your comments about how we are no longer competitive in the electricity field. At one time that was one of our strongest incentives for attracting industry to Ontario, particularly those who were heavily dependent on electricity. I assume in your industry that is a major consideration. Do you have any thoughts about what is happening at the current time with the proposed restructuring of the electricity sector?

Mr Paton: Yes, it's a big subject for us, but I'm going to ask either Dave or Mike to talk about that. They're much more knowledgeable about that than me.

Mr Podruzny: The scorecard that you have in front of you is going to be adjusted immediately following the next budget. One of the points that I think will come up is that the electricity rates in Ontario, which have not moved for a number of years, where rates have moved in other jurisdictions, are rapidly going to be moving to the point where they are competitive.

One of the concerns we have in the whole process of deregulation, and I guess it's where we appreciate that the move is going slowly and carefully, is that the deregulation process needs to afford competitive options and that there need to be, in a deregulated environment, choices for the public and for industry. A deregulation process that only moves from a provincial monopoly perhaps to a private monopoly is not deregulating. We would want to see a sufficient number of competing entities that you have competition.

So our concern about rates has to do with moving to the kind of deregulated industry that you see, whether it's in telecommunications or trucking and so on. The rates, as they stand right now in Ontario, are competitive with the immediate region around. The lowest rate would be in Quebec. The second-lowest rate would be in Ontario. When you head west, Manitoba is lower. The main competition, though, for southern Ontario is going to be with the immediate northern-tier states, where the rates are competitive. Where we said in here that the rates were non-competitive, it was because as early as a year ago there were a large number of neighbouring states where the rates have now gone up.

The Vice-Chair: We'll move on to the third party.

Mr Christopherson: Thank you, gentlemen, for your presentation.

I do want to talk about the revenue on the sales tax, simply because there are tax moves you want to make that do pay off in the long run, and there are others where you're being lobbied because people are smart enough to lobby you for their best interests. Do you have a dollar figure? Do you have a sense of that? What is that?

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Mr Mike Hyde: Yes, we do. We worked very closely with the Ministry of Finance to try to determine what the revenue impact would be. We know very well our own sector and we were able to determine that, but we added on top of that five other industry sectors that may in fact have concrete used in the same way we do. The revenue impact was estimated at somewhere between $12.5 million and $18.5 million per year. Offsetting that, of course, is the personal income tax, if new jobs are created, and corporate tax, of course, with new investments and new manufacturing facilities, too. We're still trying to figure out what that offset would be, how big that would be. It's a little bit harder to get our arms around that figure.

Mr Christopherson: I can appreciate that. To be fair, everybody makes that argument, whether it's spend this on education and you'll save money, or spend this on preventive health care. Everybody makes that argument, and if you just did it across the board on the corporate side, what would make sense is just to eliminate all corporate taxes entirely and then we'd have more money than we can count. It's not that straightforward; very little is.

But I was wondering what other industries this impacted on, and are you the leading user of reinforced concrete and, if so, why? Why the chemical business?

Mr Podruzny: I'll see if I can tackle that. We probably are the leading user. We're not asking that all reinforced concrete be made sales tax exempt; we're only asking for that portion of reinforced concrete which we have believed for some considerable time is integral to the manufacturing process. That might be a special concrete support for a high-velocity engine or a reactor vessel, where the concrete support is necessary for the operation to actually proceed.

There are a few other industries where there is a similar-perhaps it's a concrete support, perhaps it's a concrete waste treatment facility. The industries that we have identified that have some but, we believe, less concrete component in the four or five categories that we've identified are the petroleum refining sector, pulp and paper manufacturing-and both of those have some similarities to our industry-and then, to a lesser degree, as you moved down you'd have the non-metallic mineral manufacturing, primary metal manufacturing and, finally, metal fabricating. Those sectors have some components where the reinforced concrete is integral.

The other point we would make is that the products we are talking about, if we make them off-site and pull them on-site and then put them together with our equipment, are retail sales tax exempt, but if we fabricate them on-site or if we have the contractor come in and put them together on-site, the tax is charged.

The Vice-Chair: Thank you very much. We'll have to move on.

Mr O'Toole: Thank you very much for an important perspective on building our provincial infrastructure. I just want to acknowledge a couple of discussions. Mr Christopherson earlier, and others, have been sort of trying to map out the conflict of building the capital infrastructure to create wealth. That's been the debate basically from the beginning. In fact, the TD chief economist, Don Drummond, who was here before-and I was quite impressed-talked about real growth and nominal growth, but the most important thing he talked about was the growth in productivity. You've talked about the capital drivers, which are really the innovative investment decisions that create capital. There's some risk with that. So I just want a response. We've had some input on the capital tax side, both federal and provincial.

Looking at this whole thing from a productivity perspective, and it's sort of covered in your tax competitiveness issue, number 3,. I suspect that I'm of the side that believes without a strong economy, you can't deal with the other social issues very properly, whether it's daycare or homelessness or a lot of other issues. No one here is opposed to that. It's just our approach to solving it is different than it was for 10 years. We're trying to put together the infrastructure, and your industry, the chemical industry, is extremely critical, I know, to our Chair, Mr Beaubien, down in his area.

Just map out a little bit more what we could do on the capital tax side, not just the retail sales tax side. That's just a one-off, and it sounds like it's solvable from what I hear you saying, but perhaps on the broader capital side. We've created the innovative research and development challenge fund and the strategic skills investment fund. We've looked at the corporate tax rate being halved; I believe they set it out as being over eight years, and we're trying to do it in less. We've given investment incentives for research and technology. But on a practical business case comparison with you and your neighbours in Texas, I think you need to look at the whole box of revenue demands. What could we do to get the best value for Ontario?

The Vice-Chair: Mr O'Toole, you've used most of your time, but I'll give you 20 seconds.

Mr Paton: Great, 20 seconds. We talk fast.

I think you're absolutely right. We're comparing all these things to other jurisdictions. Very simply, if you take a look at the total corporate tax load on our sector, it was around 40%, right, Dave? Then it was cut a little bit by your reductions in the Ontario level.

We've done an analysis of what corporate tax levels probably would be required to significantly attract investment. We feel at the federal level, it should go from about 21% to 17%, and if the reductions are made as quickly-I don't know what the time frame is in Ontario, but if it moved down quickly, we'd end up with 17% plus 8% or something, so it would be around 25%. At 25%, we would open up an advantage vis-à-vis the US, and we need that advantage to offset the fact that we don't have huge complexes like Houston, we're not close to the market, we're not close to the headquarters, we're not close to where the R&D is usually done.

That would be a short answer, plus address the capital write-off provisions.

The Vice-Chair: On behalf of the committee, thank you very much for your presentation. Most informative.

OTTAWA-CARLETON ASSEMBLY OF SCHOOL COUNCILS

The Vice-Chair: We'll move on to our next delegation, the Ottawa-Carleton Assembly of School Councils, if they would come forward at this time. On behalf of the committee, welcome. To begin your presentation, just state your name and those of your associates for the record. You have a half-hour in grand total for a presentation and questions divided equally between the three caucuses.

Ms Cynthia Pohran: My name is Cynthia Pohran, and I am the chair of the Ottawa-Carleton Assembly of School Councils.

Mr John Dingwall: I'm John Dingwall, and I'm on the executive of the Ottawa-Carleton Assembly of School Councils.

Mr Greg Laws: I'm Greg Laws, also a member of OCASC, as a liaison officer.

Ms Pohran: I'd like to start by thanking the committee for giving us the opportunity to address you and to present our concerns. I'm really pleased that you are soliciting public input to the provincial budget through this process, and I found it very interesting to listen to your presenters. You've had a long day and I just really appreciate your attention at this time to hear what we have to say.

Of course, it will sound like we're giving a very local perspective, but I think that when we describe the issues that we are concerned with, you will find that they're not a local phenomenon and they are actually pervading the education system throughout Ontario.

One of the things I heard through previous presenters was about the quality of life. It may sound like we're coming from conflicting perspectives, but I think that depends on our vantage point. One of the things I realized, too, is that the province has diverse responsibilities and you're striving to meet the public interest. These things we all very much appreciate.

One thing that we do think, though, is that Ontario's budget should not promote a society where a small percentage of the rich would get richer and the poor might get poorer. What we're going to deal with here is how public education becomes the great equalizer for our citizens in Ontario right across the province, the fact that it would be accessible to all and that, once in the education system, every child has an equal opportunity to experience personal success through their educational experiences.

Another issue that I've heard expressed-a common thread through all the presentations-is that people are the key to our social infrastructure, that school, if it's not child care, is the first experience outside of the family, and that school should be a safe place, and it should meet a diversity of the needs of all students. These issues we will also address in our presentation.

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Our message to you as a province would be to invest in education. A child typically spends 15 years in the education system. These 15 years shape and mould our future leaders of our society. They shape and mould and provide the skill sets. Every one of the presenters who were presenting on the technological or the business side were saying they need skilled work people in their workforces.

So these are the issues that we're going to address. We did give you a written presentation. We're not going to read it verbatim; we're going to try to touch on the key issues, and then we do hope that you'll read some of the filler in your spare time, if you have that.

The Ottawa-Carleton Assembly of School Councils is an umbrella organization for the 150 school councils that serve approximately 80,000-plus students within the Ottawa-Carleton District School Board. You heard this morning from the chair of the OCDSB, Jim Libbey, about the issues facing our board. We are in complete agreement with all of those issues.

We are a non-partisan organization. We represent a broad cross-section of the population. Our motto is "Working together for excellence in education." We do this within our school councils as individual members in local schools. We do this in the assembly as school councils working together. We do try to partner with the Ministry of Education. It doesn't matter what stripe that ministry is wearing at any time: our first interest is the students. They are our children. School councils are made up of a majority of parents. We want to see the students put first in any type of ministry directive.

The general picture is that English public education in Ottawa-Carleton is suffering from the impact of continuous funding cutbacks. Our students are paying the price now but our community will pay the ultimate price later.

From 1998 to this present time, the OCDSB budget will have been cut by close to 20%. In theory, the cuts are supposed to come from central administration and education tax dollars are to be focused in the classroom. The reality is that central administration accounts for only approximately 2.8% of the total budget. That amounts to approximately $14.4 million on a $403.7-million budget. We're using the 1999-2000 figures; those are the ones that we actually had record of. Therefore, most of the reductions have come straight out of the classroom. I think that's important for you to know.

What is our message? The current funding formula handicaps our board with regard to providing quality education to our students. It is time for the province to reassess an increase in funding for Ontario's students.

Before the funding system was centralized by Bill 160, school boards had the local authority to raise taxes and to allocate these dollars to directly benefit our students. This ability to invest in local education allowed our board to take into account the specific needs and priorities of the Ottawa-Carleton region. You heard some of those needs expressed earlier this morning by the OCDSB chair. The application of the revised provincial funding formula has resulted in lessening the quality of our region's education. Our school board is left with no flexibility and is constrained to the provincial average. That was a message I heard from a previous presenter: that we must have a responsive and flexible education system. We couldn't agree more, and that is one thing that the current funding formula does do: it restricts flexibility.

The funding cutbacks that we have experienced so far are only the tip of the iceberg. The mitigation or transitional funding is now expiring and our students will soon be feeling the full force of the cutbacks. This will have a tremendous impact on students all across the region. Many who are currently disenfranchised with the declining quality of English public education are seeking alternatives. Those who can afford it look for options outside the public education system. If this phenomenon continues, it will result in a two-tiered education system with unequal opportunities.

Access to quality education should not be based upon one's ability to pay. Education of our children is a basic tenet of a democratic society, and the cost should be borne by all members of society. Those who choose to or must remain in the public education system face a situation that just keeps getting worse. As we see each of our children going through the system, we also see declining quality of education, mounting pressures and diminished choices which are the result of a funding formula based on government budgetary decisions and not on sound pedagogical principles and practices. Any potential positive results from educational reforms are being lost because they have been introduced without proper timelines or adequate financial support. OCASC has gone on record previously to say that we applaud many of the government's education reforms. The new provincial curriculum is a wonderful document, but without the necessary funding to support that curriculum, we're losing those positive results.

The consequences of cutbacks in the school system will be felt not only in the political system but also in the economy of Ottawa. Since Ottawa makes a vitally important contribution to the provincial economy, this impact will affect the Ontario economy as well.

Your budgetary decision will be, "Do we pay a bit more now or a lot more later?" I think that might become evident as we highlight the specific areas where we are seeing the most stringent constraints in our budget area. We'll be talking about special education, we'll be talking about English as a second language, and the frustration that students are feeling with having restricted courses and not having the textbooks to actually meet the curriculum requirements.

All in all, parents and school councils are seriously concerned about the current and prospective state of education in Ottawa-Carleton. We see the system getting worse despite all our fundraising and volunteer efforts. The whole concept of public education is that all taxpayers invest in quality education for each citizen, regardless of his or her socio-economic status or particular set of abilities.

School councils and parents of school-aged children have traditionally augmented the educational experience with their participation and/or fundraising efforts. Today, school councils and parents are faced with the dilemma of raising money to provide basic curriculum resources. This should not be the case.

From the government we hear about the importance of learning in the knowledge-based economy; we hear about the importance of innovation and investment; and we hear about the need to be competitive in a global economy. We agree with the government on all these points, and we believe that in order to achieve these goals you need to make the necessary investments to ensure that we have a strong education system, now and in the future.

In looking at some of the specific areas-we've outlined them in our brief-we'll touch upon special education first.

Special education provides help to those students with exceptional needs, including children with developmental disabilities, learning difficulties and behaviour problems. When children in need are identified, they should get the help they need. This provision of appropriate programs and services increases their chance for success and their ability to become productive, contributing members of society. Without the necessary funds for assessments and appropriate programs, we fear that our children will not reach their full potential, and they may drop out or go through the system without acquiring the knowledge and skills they need. In essence, if we're investing in post-secondary school education but we're not giving the children the resources they need to get through secondary school, we are not solving the problem.

Ottawa-Carleton has traditionally been a leader in special education, with approximately 12% of our students currently identified as exceptional students. Special education currently accounts for about 20% of the total instruction budget. Meeting local needs for special education costs our board $10 million more than the formula provides. The strong programs that we have had are now being weakened or dismantled.

Our board has been forced to reduce the number of paraprofessionals and educational assistants who support regular classroom teachers. Many of these personnel are the very same people who should be conducting the early-identification tests that enable exceptional students to be assessed and funded by the government through ISA grants-intensive support allocation. Many of our congregated classes that once provided exceptional students with the appropriate services they needed have been dismantled, forcing integration into a regular classroom that does not have an adequate number of teaching assistants to help the teacher manage classroom behaviour. Consequently, all students are being affected and their educational needs are not being met.

The solution is not, in our opinion, to dismantle the programs that Ottawa has built up, but rather to increase the support for special education across the province. Such a decision would recognize that special education is an investment that will pay off as students in these programs become adults who can make important contributions as employees and citizens.

English as a second language: for most jobs in Ontario, competence in English-not just a basic knowledge of English-is essential. If we want immigrants to be employed at their full potential, then Ontario's public schools should be providing the required ESL instruction to school-aged children. This can only yield substantial benefits over the longer term by providing a larger educated labour force and fewer socially assisted persons.

Unfortunately, ESL funding is currently available only for the first three years from the time of entry into Canada, and it is not available at all for children born in Canada. These rules do not address the reality of the home environment for immigrants, many of whose children do not enter the school system with the necessary knowledge of English.

Our statistics here would say that over 8,500 students in the OCDSB need ESL instruction. The current statistics are now 9,700, and we're only meeting the needs of approximately 30% of those students. That is just to give you an idea of how much we're falling short of meeting the needs of these students in our system.

I'm going to let John continue with secondary schools.

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Mr Dingwall: The secondary school system is absolutely fundamental to prepare young people for post-secondary school or career choices. Those who lack secondary school diplomas will be facing limited prospects. We need to ensure that we have the financial resources to respond to the diverse needs of our students and to ensure their success.

What's happened here is, we have the shift to the four-year program and, at the same time, we've had a reduction in the funding that's available. That means there are fewer slots in the curriculum for students to choose. You're getting declining enrolments in some courses and we have a very limited ability to carry courses with smaller enrolments. Consequently, a lot of courses are being cancelled and the range of options is being reduced.

We find the cancellations occur in areas such as senior-level courses in the social sciences, drama, visual arts and music, physical education and health, and international languages. It's really depressing to actually go to a school council meeting and have the principal tell you the courses that are being cancelled are the courses you were counting on that you wanted your kids to take.

At the same time, with the shift to the new curriculum, we have a distinction now between applied and academic courses, but this distinction, which actually makes a lot of sense in many respects, is not working too well because we don't have the ability to carry the requisite number of courses, and students have difficulty finding mathematics and science courses that match what they specifically require. There are a lot of problems there with math and science as well.

In the bilingual area, we're having difficulty putting those programs together because we can't fund the senior social science courses the students used to have. So that's harder as well.

We've also found that there's limited chance to actually innovate in the system. For example, we would like to put studies in international baccalaureate programs in various schools, but we've been very preoccupied with school closures. All of our innovation's been put on hold for the last couple of years, and that will continue to be the case. What we're finding is less innovation, less choice and just less opportunity in the secondary school system.

At the same time, we did some research, for example, looking at American schools in Minneapolis and places like that, California, Arizona etc. What we found was that their schools are maintaining the programs in exactly the areas we're cutting back. These are the places where people are going down to for high-tech jobs, and they're making comparisons between Ottawa and these other possible locations that they could go to.

So far, our education system has actually been a selling point. People have these discussions. They look at the various elements of the package, they look at taxes, they look at quality of life, they look at bike paths and parks, you name it, and they look at education. Education has been strong up until now, but as we implement these 20% reductions, we're finding that the whole quality of the system is going down. We've got less and less choice, and this is going to be less and less of a selling point as time goes on. It's what we would call an emerging issue. If you look at the actual comparisons, you find they're really maintaining these programs in the States, like international languages, athletics, sports, drama, music etc. I looked at those Web sites and actually started getting a bit depressed.

Ms Pohran: A further concern relates to the current impact of Bill 74. When the Legislative Assembly held its hearings on Bill 74, OCASC came forward and expressed its concern that this bill would reduce the number of teachers in each school, thereby increasing safety risks to students, and also that the quality of education would be reduced because remedial help was not classified as part of instructional time for teachers, and we were very concerned about our students who needed that remedial help. That need doesn't just disappear at grade 8; it continues on through high school.

The legislation has increased teacher workloads, while reducing flexibility in scheduling. That impacts our students. Some students are seeing a changeover in teachers halfway through the year and, again, less of an ability to offer a wide range of courses to fulfill the needs of each student. Not every student is geared to major in computer technology and go out into that area. What we have also seen is a drastic reduction in applied technology in the trades. Even our intermediate schools are not able to introduce that type of course to a student, and so we have a reduction in people going through the system who are pursuing the trades.

Also, the net result has been less teacher time available for students outside the classroom, less time for individualized assistance, extracurricular activities and in-school supervision. We're also saying that Bill 74 needs to be reviewed, reassessed and revised, and though that may not sound like a part of the pre-budget consultation, in essence it is, because basically we're saying that although the funding formula is restrictive, it just can't be reorganized within the existing amount of money you've put into the Ministry of Education. There needs to be more money put into that area so that all of these issues can be addressed.

For elementary schools, we see it as a starting point of a child's education, a foundation upon which the rest of his or her educational experience is built. Across our whole system and across the province, we see problems stemming from funding shortages, and that includes shortage of textbooks. As we've said, the new curriculum has been introduced from kindergarten right up to grade 10 now, but when boards budgeted for putting textbooks in the classroom, it wasn't for that many grades and that many classrooms all at once and so boards are left with a shortage of funds. We know there has been grant money given, but it's not sufficient. We know of schools that have an immediate need for, let's say, $45,000 of French curriculum textbooks; otherwise, their teachers are spending time translating English documents into French just so that they can teach the curriculum to the students.

We've lost vice-principals. The funding formula only allows a principal for what is considered to be an average-sized school, but most of that school size is slightly larger than a lot of our schools and that means our board has to make up the shortfall there.

Our libraries are suffering in that we cannot staff them with teacher-librarians. Library technicians have been put in place because we can put those people in place for a lower salary. A lot of our libraries are closed to our students for a good portion of a day. They may only have a library technician for half a day, and yet you'd think the library would be the hub of a school. This is another real situation that we think needs to be addressed.

There are things like the reduction of availability of specialized instruction in technology and the arts, inadequate playground equipment and the fact that our transportation is causing our children to go on double or triple busing at very early times. You've heard the concerns about waking children up so they catch buses at 6 o'clock in the morning, and that's happening for school-aged children too.

I know our time is coming down to 10 minutes. We have points on capital investment, the impacts on our community and the impacts on the economy. We also have recommended solutions in our brief, as well as an executive summary on our cover page.

What I might say in closing, because I'd like to leave time for the members to engage in some questions, is that no matter what industry you hope to support, I'd like you to keep in mind that Ontario's students are your clients who must be served by the province in order to provide the skilled labour force that would enter those business places and workforce. Thank you.

The Chair: We have approximately three minutes per caucus, and I'll start with Mr Christopherson.

Mr Christopherson: Thank you for your presentation. You hear enough presentations from enough communities about where we are with the education system and it just leaves you dry as to where you go to try to find another angle to make the point. I can only hope the government's listening, because virtually every community in this province is facing the same thing. I heard in Thunder Bay exactly what my trustees tell me in Hamilton, in my hometown, that we're hearing here, that we hear in Toronto, and I have no doubt we'll hear tomorrow in London also.

Let me ask you this. In Ottawa specifically, if the trend isn't changed during the term of this government, which could run another three years or the better part of three years, where are you going to be? If you want to take it out further, where are you within a half decade and a decade? Where does this kind of short-sighted funding deficit ultimately lead us?

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Ms Pohran: It's hard to predict the future, and I won't claim that I have the ability to do so, but certainly, if our students continue to slip through the cracks, we do think there'll be a negative impact on society: frustrated adolescents. We see a rise in violence in school locations; outside of school as well, in our society. Especially for the special education students, I know the government has committed to providing standards within the next three years; we're aware of that. But there is certainly a need until those standards-and we welcome them-are addressed. Funding must be provided so that the supports can be in place, because integrating special education students into the regular classroom without appropriate supports is affecting every student in every classroom across Ontario. I would just say that we have to recognize that young people can be frustrated. It may be increased dropout rates with the introduction of Bill 81 and the code of conduct and the strict discipline schools. We have concerns over all those issues and we really don't know where it's going, but we're concerned.

Mr O'Toole: Thank you very much for your presentation. I think you listened to presentations today from all the different sectors. I hope you get an overview of the tough choices of the human dilemma.

Ms Pohran: We do.

Mr O'Toole: Where does the money come from, really? From the government? Well, they don't have any money. I'm not trying to be smart, but it's that simple. We redistribute the wealth.

My daughter is a high school teacher; my wife is a teacher. I have five kids. I was a trustee for a couple of terms. I don't disagree with anything you're saying, but there are some choices. You can't be all things to all people. I would agree with investing in the classroom-totally, absolutely. I would today commit with a resolution that we would put more money in the classroom.

Some 85% or 90% of the budget is wages and benefits. You saw the board's presentation. The top three items were all salary and benefit issues. Not to say that good people shouldn't be well paid, but my point is, how do we build in the investment in accountability so that it's in the classroom?

Just earlier today the Ottawa-Carleton Child Poverty Action Group-I'm going to quote from Lynn Sherwood about the new learning opportunities grant for children at risk: "To the best of our knowledge, these grants have been rolled into the general revenue of the Ottawa Board of Education for teachers' salaries." That's in her presentation. We have evidence that there's been money taken out of textbooks for teachers' salaries. The Ottawa board got a 4% raise. Where did they get the money? The increase in their budget-by the way, it did increase in real dollars. Where did they get the money? From books.

Ms Pohran: I would like to address that. The first thing I'd like to address about that is the fact that the government is not providing sufficient money to the boards to pay their teachers and other employees based on contractual obligations. The percentage that you're talking about-we follow the budget process quite closely. We know that it is the first increase the teachers have had since 1991-92, and 4% for teachers, in our opinion, is a better investment in the classroom.

Those teachers are in the classroom. The quote from Lynn Sherwood-I don't have the statistics, but I would hesitate to agree with it. I've been at the budget presentations and have seen the accounting of the grants. If you want to offset the number of retirements and the number of resignations that are happening in the teaching field, I think you have to at least offer some kind of competitive salary. The Ottawa-Carleton District School Board's salary for teachers is not at the top end of the provincial average, but I do say that the government should be providing at least the average for the salaries and benefits to the boards of education, or they should take courage and enter into the contractual obligations themselves, because the boards do not have any more resources as far as raising the money to negotiate, and yet they're at the board with the federations.

The Chair: Thank you very much, Mr O'Toole. We've run out of time. Mr Patten.

Mr Patten: That's a heck of a litany of identified areas that are wanting. When you put it all together, it says-and by the way, to my colleagues on the committee today, these are parents who work incredible hours, better than half time in some instances, in trying to contribute to better education in the community.

The cutbacks that have been taken out of education leave a base, all the responsibility and all the control centralized at Queen's Park, but you've got the problem of trying to sort it out with no decision-making. You've got to renegotiate contracts but you're given a certain guideline for salaries, and you know you can't even satisfy the salary guidelines so you've got to get that money from somewhere else. It's an absolutely stupid situation that you have to live with, we all have to live with and, as you suggest, you're going to pay for this.

I'd like you to identify the growth in the private schools that is going on in this particular community-and I think I know some of the answers but you may have more definitive information than I do-directly as a result of the frustration of people saying, "I am sick and tired of seeing my kids getting kicked around. We're trying to raise money for textbooks; we're trying to raise money for basic programs in this thing. We can't get a resolution between the government and our teachers for after school. To hell with it, I'm taking my kids out," with one kid or another. And then they're still contributing their time voluntarily to try and help the situation, in your situation. What is happening related to the growth of private schools in this area?

Ms Pohran: I don't know if I have any statistics on that. I've been so immersed in trying to work in the public education system, and that's where our three children are. As Mr Patten has pointed out, we're all parents here and committing voluntary hours as per school councils-that's exactly what we do.

I do know anecdotally of people who have moved their children into the private schools. They can't afford it. Parents of children with special needs have been especially frustrated with the lack of supports. I know of parents within the public education system who have made transfer into schools not based on program decision but because it's safer at this school than at that school over there. We know of parents who have chosen to home-school their children because they can't afford any other option. We know of parents who are moving into the Catholic board, and I know that board is funded by public taxpayer money too.

I guess what I'm trying to say here is that's not the point, because if we ever got to a two-tiered system where the government moved to charter schools and gave people their money as vouchers to go and shop where they wanted, we are concerned that no one will want those special-needs kids. Which school would want those kids to bring down their graduate statistics? We have a real fear that would be the way we'd go.

We're appealing to the government to look at public education and the budget that they're putting into the Ministry of Education based on those facts and other things that we've brought to the table.

The Chair: Thank you very much for your presentation this afternoon.

ALEX CULLEN

The Chair: Our next presentation is from the city of Ottawa. I would ask the presenter to come forward and state his name for the record. On behalf of the committee, welcome, and you have 30 minutes for your presentation this afternoon.

Mr Alex Cullen: I would like to thank the standing committee on finance and economic affairs for giving me this opportunity to address you during your pre-budget consultations. My name is Alex Cullen, member of Ottawa city council and chair of the Ottawa Housing Corp for the city of Ottawa. I'm glad to see some familiar faces around the table here.

I'm here to speak to you about the challenges facing the new city of Ottawa-the costs of our amalgamation, the demands for new infrastructure, our housing crisis, and the need to refurbish our hospitals-and to plead with you to reinvest the province's burgeoning surplus, now running at $1.4 billion, into needed public services, not more tax cuts.

As you are aware, our new city has been newly created from the amalgamation of 11 municipalities and regional government into a city of over 800,000 people. The promise that was made to us by the Minister of Municipal Affairs and Housing at the time was that this would improve service levels and provide savings for property taxpayers. While all agree that there are savings to be made from amalgamation-$86 million is what the transition board has identified-not all of this can be returned to the taxpayers. As you will see from the table before you, the budget pressures upon the city of Ottawa amount to $57 million. Take out Ottawa Hydro; you end up with what's available to the city, some $22.5 million.

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However, what had appeared to us to be some $22.5 million in savings at the end of the third year that could either be returned to the taxpayer or reinvested into much-needed public infrastructure-and I should mention that the transition board had identified $145 million in additional infrastructure requirements above and beyond the city's annual $300-million capital budget-all this has now evaporated with the government of Ontario's inordinate $94.5-million bill for the costs of amalgamation.

This was not only unexpected, as we had assurance from the transition board that the Minister of Municipal Affairs and Housing had agreed to at least a 75% provincial share, still leaving a $47-million bill for Ottawa taxpayers, but it means either Ottawa taxpayers see a 13% tax increase, confounding the promises made by this government in initiating amalgamation, or a corresponding cut in services, again confounding those promises, or a reduction in our capital infrastructure program by nearly one third, which would be counterproductive to all parties concerned. Clearly, this is a problem that would be in the interests of all parties to resolve, not by rhetoric, if we are to sustain the growth experienced in this, the second-largest city in Ontario.

The government of Ontario has certainly benefited from this growth; it has not only saved $100 million as a result of lower welfare costs-and I should mention the city of Ottawa's costs have actually increased by $4 million due to provincial downloading of the costs of family and new-resident cases; no savings here-but has benefited from the increase in provincial revenues in sales, corporate and income taxes. In the last two years tax revenue generated in this community increased by more than $250 million annually. All together Ottawa contributes more than $2.5 billion a year to the provincial treasury. We have contributed to the province's $1.4-billion surplus. It is time to see that reinvested back into the community.

As you may be aware, Ottawa has been experiencing tremendous growth over the past few years, particularly in our high-tech sector. The high-tech sector has recently become the city's largest employer, exceeding now the government sector, a clear indication of the tremendous growth we have seen here in Silicon Valley North. However, with this growth in employment and wealth-creation comes the need to provide infrastructure-roads, sewers, public transit, housing etc-to sustain this growth. The alternatives are traffic congestion, inadequate services, unaffordable housing that will choke off growth.

The transition board, in developing the budget for the new city of Ottawa, had identified over $145 million in additional projects, beyond the $335-million capital program for 2001 they have placed before city council. These are not nice-to-haves; these have been identified by your transition board as necessary to sustain the growth that the city has already experienced, let alone meet the needs of tomorrow.

If we are to sustain this job-creating, wealth-creating growth that benefits families, business and governments alike, then we must make the necessary investments to sustain it. It is clear, as the transition board has indicated, that new funding sources must be found. This is where the investment in public services is needed, and now.

One of the issues facing our community is the lack of affordable housing. Since 1995, when this provincial government cancelled its funding for new socially assisted housing, no new rent-geared-to-income housing has been built in the city of Ottawa. Yet our waiting list for this housing has doubled over the interim to over 15,000 households today.

Further, the promise of private sector investment-and I heard it at the Legislature-in affordable housing has failed to materialize. The elimination of rent controls through the passage of the so-called Tenant Protection Act did not lead, as the government promised, to the building of affordable housing in our community. Today we have over 72,000 households here in Ottawa paying more than 30% of their gross income on shelter, in a community that has only 22,000 units of socially assisted housing. Our vacancy rates are less than 1%, 0.2% to be precise, and rents are skyrocketing. This means that these families have less for their children, less for their health and less for their future than before. This is clearly unsustainable.

The province has downloaded the costs of maintaining our current level of social housing on to municipal taxpayers, at a cost of some $59 million a year. While we can manage the current portfolio, property taxpayers are in no position to build and support new socially assisted housing. It is up to senior levels of government-who, through their downloading on to municipal taxpayers, are reaping the benefits through budgetary surpluses-to contribute their share toward dealing with this acute housing crisis. Band-aid solutions are not enough. It is a real crisis.

Does it make sense to pay $4,000 a month to support a family of four in our shelters? But that is what we're doing today. The cost of a rent supplement for socially assisted housing is now less than $200 a month in our city, if only we could get some built. This is another example of where investment in public services is needed, not more tax cuts.

Lastly, I want to talk to you about our hospitals. I've provided you a chart that shows the renovation costs for hospitals as a result of the Health Services Restructuring Commission. As members of this committee know, the government of Ontario in 1995 established its Health Services Restructuring Commission to review Ontario's hospital system in order to improve efficiency and save taxpayers money. In Ottawa, the Health Services Restructuring Commission closed our Grace and Riverside hospitals, amalgamated our Civic and General hospitals and closed beds elsewhere in Ottawa. Included in its 1997 orders were instructions as to how its decisions were to be implemented, including the necessity of capital renovations to improve hospital services. This has led to the now $598 million required to implement the Health Services Restructuring Commission's decisions, what is now arguably the largest capital project in Ottawa in recent memory. However, the expectation that the local community must provide $232 million toward these needed renovations is both unrealistic and unfair.

Our community raises about $110 million a year in charitable donations. The United Way is responsible for some $18 million of this. It would be devastating to community programs funded through charitable contributions if an additional $23 million or so had to be raised each year for 10 years for our hospitals. Our community can't absorb that kind of fundraising burden. Further, the municipality has tremendous needs simply dealing with the costs of amalgamation-remember that $94.5-million bill?-and the demands for infrastructure growth, before even contributing to what is clearly a provincial responsibility.

It would take a 3% increase in property taxes to fund this amount, and that is simply not on. The amount being demanded is inordinate, unprecedented in scope and beyond the ability of property taxpayers to pay. And why should we? These costs are the result of a provincial initiative designed to save the government of Ontario money. Well congratulations: you have a $1.4-billion surplus. Further, it's the government of Ontario that has the legal, moral and political responsibility to fund health care and our hospitals. It's in Canada's Constitution. It's your job. Do it.

What the government should be doing is reinvesting taxpayers' dollars into needed public services-infrastructure like roads, transit, schools, hospitals-not in more tax cuts. This is where the need is, and that, in my view, is what taxpayers want. I urge you to bring this message back to the Minister of Finance and to the government of Ontario. That is what the province's budget should be focusing on; that should be its priority.

The Chair: Thank you very much. I'll start with the government side. We have approximately five minutes per caucus.

Mrs Molinari: Thank you very much for your presentation. I feel a need to clarify some of the initiatives that we as a provincial government have taken. The provincial government has recognized the importance of Ottawa-area municipalities through a number of actions.

First, I think it's important to point out to everyone involved how provincial actions have benefited the taxpayers in Ottawa over the last few years. The region of Ottawa-Carleton received an $18.5-million grant for their transit capital in 1998. This represents over one quarter of the total $70 million provided province-wide. Also, in 1998 the region received a transit grant of a further $25 million in recognition of Ottawa's unique capital needs for a rapid transit system. Between 1998 and 2000, the region received over $7.5 million in highway funding grants. Between 1995 and 1999, as part of the Canada-Ontario infrastructure works program, the province provided $45 million to the Ottawa area as its contribution for local initiatives. Under the local services realignment exercise, the municipalities in Ottawa received over $218 million in annual new revenues to cover off the municipalities' new service responsibilities.

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To assist municipalities in their new responsibilities under the local services realignment, the province provided the community reinvestment fund. To date, Ottawa municipalities have received over $14 million in CRF payments. Ottawa municipalities also benefited from transitional assistance money for LSR, in 1998 and 1999, of almost $3 million.

The government has committed to reducing the cost of education on the property tax bill. To date, business property taxpayers have seen a reduction of over $650,000 and residential taxpayers have seen a reduction of $17 million. When fully implemented, the education tax cuts will benefit business ratepayers by over $1.5 million each year and residential ratepayers by $34 million each year.

Secondly, the provincial government has made a commitment to assist the new city in amalgamating its operations so it can recognize savings and efficiencies to the benefit of local taxpayers. The transition board has identified almost $90 million in annual savings due to amalgamation. This will allow the new city to respond to local priority initiatives as well as provide tax savings to ratepayers at the same time.

To assist the new municipality in its reorganization to recognize these savings, the province has committed over $108 million this year to fund these activities. This transition money works out to $360 per household to cover those one-time transition costs, one of the highest per household amounts in similar restructuring initiatives. I think it's safe to say this is certainly a fair deal for Ottawa ratepayers and council.

I am confident that the city is also currently preparing to initiate its plan to realize the savings identified by the transition board. The hard work undertaken by the transition board produced a number of recommendations on how the taxpayers would benefit in a new amalgamated environment. The report of the transition board has provided a road map for the new city council on how to achieve these savings. I and other members of the government continue to encourage the new council not only to adopt these recommendations but to find even further ways it can deliver quality services at the best possible cost.

When I think of some of the immediate things the city can do, the pending decisions on what to do with surplus municipal assets comes to mind. Through the sale of surplus assets, the city not only benefits from reduced operating costs by no longer having to operate these facilities, but also reduces its debt load by removing these liabilities from its balance sheet. Just as importantly, when the city sells off surplus land and buildings, these properties become taxable and represent new revenue to the city each and every year.

Finding these benefits and savings for taxpayers must be driven by strong leadership and political courage. I, along with my colleagues, continue to urge Ottawa city council to embrace these challenges and deliver to Ottawa taxpayers what they deserve; that is, the best possible municipal services at the best possible cost. Taxpayers anywhere in the province deserve nothing less.

Mr Cullen: Thank you for that rather patronizing statement.

I was on city council from 1991 to 1997. We went through the downloading the province inflicted upon us, the shell game of taking money off property taxes for education and dumping extra social services on to our tax base. Removing funding for transit from property taxpayers, taking funding for highways off property taxpayers-the list you give doesn't even come close to compensating the cost that the provincial government inflicted on the property taxpayer in the city of Ottawa.

I can give you chapter and verse; the cost of downloading has been well documented by our own staff. It was not revenue-neutral; that was the promise. It cost us, and it cost us in services we had to provide.

It's interesting that you talk about selling off land. We have a housing crisis. There is no point selling off land we might be able to use in public-private partnerships or find funding from senior levels of government if we have to buy it back at higher prices. Yes, we will sell off lands that are surplus to us. We've been doing it for years and we don't have to be told to do it again. But it's not going to be able to pay for this bill.

The bottom line is we have new needs as a result of the amalgamation bill that no one was controlling: your creature, the province's creature, to create this transition board, and no one was minding the shop when they went over budget on consultants, over budget on a whole raft of things, and we're being faced with 50% of the bill. Who was minding the shop for the most expensive per-capita transition board in Ontario? That's ridiculous.

Mr Patten: I'll give you a little more time, Alex. You've heard the continuation of communications by press release, by statement, one thing or another. I still don't know whether the council or the mayor has received any personal communications in terms of, "Let's sit down and talk about some of the issues, all right?" The transition board was a creature of the province; no parameters were given. It would seem to me to be prudent that if someone sets up a management mechanism called a transition board, they might say, "Here are some of your parameters. Don't go beyond this. If you do identify these as options, that would be in the hands of council to reconsider or to make decisions upon."

So the relationship is not good these days. I hope it will be, with the new minister of municipalities. I'll be happy to see Mr Claude Bennett come back and see what he has to say. He had said it was 75%; he was convinced. I don't believe he would say that out of the blue. I think our representatives here were not able to carry the day back at cabinet, and that's part of the problem. They were told that they would not have to carry the day on 75%. Anyway, that's another issue.

The fact remains that a very paternalistic government came in and devastated education, devastated health care: "This is what's best for you." In each area, you had education councils, you had the health-

Mr Cullen: Health services restructuring council?

Mr Patten: No, not that; the local health council.

Mr O'Toole: The district health council?

Mr Patten: The district health council, as we called it at the time. It did a tremendous amount of work, identified areas and said, "Don't go this way." They go that way, they take over $100 million out of health and education, then come back and say, "Now go back to the community and raise this amount of money," with a formula that was less participatory in terms of contributions by the provincial government. And we wonder why we have that environment here today.

A lot of people are not happy when you say, "Now get out there and raise this money." "What are you talking about? You just took away our hospital. Now you want us to go out and raise money for some restructuring, where the existing hospital now is carrying a deficit because it can't do the job?" Who will say today that our health care is better than it was before? Not very many. But I'll let you carry on for your reaction to some of this.

Mr Cullen: I do know that our mayor has an appointment with the new Minister of Municipal Affairs and Housing and is expecting to, hopefully, deal with this issue on a more professional basis than we've been seeing in the news media. It has been very disturbing.

The transition board was informed that there was a deal for 75%, but it confounds the promises made by the original minister, the Honourable Tony Clement, who, when initiating this amalgamation process, told us that we would be able to maintain service levels and provide savings. Then we get downloaded an ambulance system.

Now, our ambulance system is running at 14 minutes to serve somebody 90% of the time, when it should be at nine minutes. As a result, we have lives being lost. It was a broken system and we have to pay money to fix it. We're doing it because the province wouldn't accept that responsibility. So we're investing money there that's coming out of the local taxpayers' pocket for what was previously a provincial responsibility. That's just one small example, but it's clear and it has been well documented.

Our plea here is, this government has record-breaking revenues. It has a surplus. There are crying needs out in the community because of what the government has done to extract that money: the off-loading of transit, the off-loading of all these responsibilities. Therefore, put the money back in so we can have good hospitals, we can serve business in the growth areas, we can serve our families in our communities. That's all we're asking: reinvest that money. You'll get it back. You'll get it back in higher economic activity, higher taxes, wealth creation, jobs. Everyone's a win-win if you make that investment, but it's crying out for investment.

When you look at the hospitals, that's one that can't stay with the municipality. It's the province that initiated it. This is not some local project that is 70% province, 30% local; this was a massive provincial initiative creating massive changes. The responsibility lies with the people who started it and who are insisting that these costs be paid for, because the Ministry of Health has approved these costs.

We're asking for the investment. It'll pay us all back. It just makes sense.

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Mr Christopherson: It's good to see you, Alex. Thanks for your presentation. Just a comment and then a question.

On the issue of the transition board, I don't know whether it's helpful, but you're not being isolated. The fact is that they're stiffing all of us who were forced through the process. Maybe a suggestion to you and your colleagues is to urge your mayor to hook up with the mayors of Hamilton, Sudbury, Haldimand-Norfolk-

Mr Patten: And Toronto.

Mr Christopherson: Well, Toronto seems to be able to take care of itself quite well. Rather than letting the minister have the opportunity to divide and conquer, if they all went in as one and said, "Look, it's one policy that's screwing all of us"-are they having a joint presentation of all the mayors?

Mr Cullen: I know there is communication between councils and that a joint strategy is being developed, because it's happening to us all. You're right.

Mr Christopherson: Great.

The other thing is sort of an open-ended question. All those things you talked about, of course, are quality-of-life issues. I don't know if you were here earlier for the presentation from the Ottawa Economic Development Corp. They talked about the six things that make a city competitive, and one of them was quality of life.

I guess just your thoughts on where the overall quality of life in Ottawa is going vis-à-vis its relationship to attracting investment, but also vis-à-vis the current quality of life of middle-class people in your community who could see that begin to deteriorate.

I'm convinced there's got to be a message to the middle class that they're not protected from all this. You can't just look the other way and think it's only the poor who are getting shafted by Harris. If you haven't been hit yet, it's only because you haven't come up on the list and not that you aren't on the list.

Mr Cullen: We hear from our high-tech sector that they are having difficulty attracting people to one of the highest-growth areas in Canada, because we have overcrowding in our hospitals, because our hospitals need renovations, because they have overcrowding in schools and new schools aren't built out where they are, because they can't get housing for the people who clean the offices or run the cafeterias in these high-tech buildings. There's no new affordable housing. They're coming to us and saying, "There's a problem here," and we're telling them, "Yes, there's a problem here. We need to work on senior levels of government to provide the infrastructure that benefits us all in terms of quality of life." We're hearing that message. It's coming from them that they're running into these difficulties. So it's already hitting us.

It's hard to compete with Silicon Valley in California when you don't have these services in place and they are there. The short answer to that is, it's affecting us already and has been for the past two or three years. We've been in this boom, growing like crazy, but no place to adequately send the kids, to adequately look after the health portion of it because of the status of our hospitals and to provide the roads and all the other infrastructure to help this community grow, economically, in terms of job and wealth creation, but also as a lovely place to raise your family. It's unfortunate that we're faced with that, and we don't have a lot of time to turn that around. Being faced with a bill from amalgamation that's going to knock out a third of our capital program-who's cutting off their nose to spite their face here? This is the fastest-growing community in Canada, and frankly the government is cutting off its nose to spite its face. It doesn't make a lot of sense.

The Chair: You've got another minute, if you want.

Mr Christopherson: OK. Housing: you've got 15,000 people, if I recall?

Mr Cullen: Fifteen thousand households.

Mr Christopherson: You've got 15,000 households on your waiting list. I imagine that putting your name on that list is tantamount to forgetting about it. The reality of actually coming up with a unit-

Mr Patten: They stopped taking them.

Mr Christopherson: I'm being told by Richard that they stopped taking them after 15,000. Not only that, but by the time your name comes up, your circumstances have changed so much-

Mr Cullen: If you get yourself on the list now, it's a five- to seven-year wait. For seniors it's up to a two-year wait. That's a long time for a senior to be on a waiting list. It is horrendous. Our waiting list in 1995, when this government took office, was 7,000 or so. We're at 15,000. This town grows, we've had all this growth, our welfare levels have gone down-our cost for welfare didn't go down, by the way-but we can't put people in the place. There's not equitable sharing of this wealth. There's no place to house these people. The rental market's gone through the roof. We've had precious little in the way of new rental housing-literally, about 200 units altogether in the past six years. It's unsustainable.

It takes a long time to turn this around. We can't do it as property taxpayers; it cannot be done. Yet we see senior levels of government, this province and the feds, running surpluses. Put it back in the community. You will get that investment back many times.

The Vice-Chair: On behalf of the committee, thank you very much for your presentation, and all the best in your role on city council.

ONTARIO SCIENCE AND INNOVATION COUNCIL

The Vice-Chair: The next presentation is the Ontario Science and Innovation Council. Would that delegation now come forward. Thank you very much for coming out and taking time to present to our committee. You have a total of a half-hour for presentation. What's left over we'll divide equally between the three caucuses for questions, responses or whatever. Please state your name for the record.

Dr Suzanne Fortier: Thank you very much. It's a great opportunity for us to meet with you. I'm Suzanne Fortier, the chair of the Ontario Science and Innovation Council. I'm a member of Queen's University, where I am currently vice-principal, academic. Before that I was vice-principal of research.

With me is Dr Michel Chrétien, who is the CEO and scientific director of the Loeb institute, which is associated with the Ottawa Hospital and the University of Ottawa.

We are a new council, which was formed last year. Its creation was announced by Premier Harris in 1999, and the members of our council were appointed in June 2000. The role of our council is to be an arm's-length body that will provide to government, through the Ministry of Energy, Science and Technology, advice on issues of science and innovation. We have a very distinguished group of members who are all leaders in science and innovation, industry, academia and business, and I think we are very fortunate to have very committed members who want to be promoters of science and innovation in the province. We've met only three times since our inception, and we've already established three key subcommittees where we will focus our attention. These are: commercialization and competitiveness, education and skills, and evaluation of Ontario's R&D investments. We're also embarking on a benchmarking pilot project to compare Ontario in science and innovation with other jurisdictions in North America as well as in Europe.

We think Ontario has a lot of strengths. Among those are, comparatively speaking, a high quality of life, a skilled workforce, high-quality post-secondary institutions, a solid base of innovative companies in a wide variety of sectors and also a solid base of programs to support research and development, in particular in the Ministry of Energy, Science and Technology.

There are also areas, though, where we need some improvements, in particular, raising the awareness of the people in Ontario, particularly the youth of Ontario, of the importance and potential of science and innovation. Another area of concern is making sure we have the human capital in sufficient numbers and skills as we move into a new era where we will have slower growth in terms of the labour force and, of course, an aging workforce. We have to ensure we have education and training of Ontario's workforce for the new knowledge-based society.

One particular concern to us is the system of incentive and rewards we have, not only to attract these innovation leaders to Ontario, whether they are involved in research or in business, but also to retain them in Ontario. We also need to have a good infrastructure system to move the ideas, the discoveries, from the laboratories into the marketplace and into society.

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We're working on developing an innovation strategy for Ontario, that is, providing advice on an innovation strategy for Ontario. We see a number of key elements in that strategy. One follows from what I said before in terms of our strength, but also some of our weaknesses. One is to develop a high level of public awareness of science, technology and innovation and their benefits to Ontario's economy and to Ontario's quality of life. Another key element is an education system that prepares Ontario's youth for the new economy. A third element is an environment that supports research and encourages new ideas and innovation. A fourth element is an infrastructure that facilitates the commercial application of these ideas and their transfer to society.

To support this strategy, we have some suggestions for budgetary strategies. If I can summarize, these suggestions are largely in three areas, because these are the three main needs that we have. The first need is to attract people and to keep them here. The second need is to provide those people with the tools they need to encourage research and to encourage discovery. The third area is, once these discoveries and bright ideas are with us, then to move them into commercial products and transfer them to society. So the budgetary strategy suggestions are in those three key areas.

The first one, which is in the people area, is to provide additional tools and incentives for Ontario to become more aggressive and proactive in attracting and retaining science and innovation leaders. I'm sure that you're aware, as we all are, of this whole debate on the brain drain and whether we are having a brain gain or a brain drain. I think most people who are leaders in science and innovation will say that we are losing key members, we are losing members who are the leaders, we are losing the top players and that we must make sure we have in place incentives and rewards so that these people not only will want to come to Ontario, but will want to stay here.

The considerations that we think should be afforded are, first, in fiscal, social and other incentives, to attract Ontarians back to Canada and back to Ontario, and also to encourage newcomers to come to Ontario. One very specific area, and it's among all of those, is a program that would help us attract foreign graduate students to Ontario. At the moment it is quite difficult for people from other countries to come and study in Ontario. There are no financial incentives, certainly, and it is not easy to bring graduate students to Ontario. Yet many of those people, as we know, would end up staying in the province and contributing to its economic development. Many of these people might return to their country but then become really key collaborators, key partners for Ontario in their area of science and innovation. We should not discourage those people from coming to Ontario, as we have for the last several years.

We also need similar incentives to retain the science and innovation leaders that we currently have in Ontario. I can tell you from where I work that it is a constant struggle. Practically every day of my life now, I am being faced with people in my university who say, "I'd love to stay here, but I am getting great offers," from the US, in particular. "They're offering me not only a great salary, but they're also offering me great support for my research." It's very hard to resist. They ask me, "What can you do for me?" What we can do for those people right now is quite limited. Certainly, it breaks my heart to see those people in whom we have invested, in terms of their education and training, leave our province to go and contribute to economic development south of the border. We really need to have programs to make sure that we don't lose those people who are really the leaders and la crème de la crème.

Another particular challenge that we have in this province, of course, is that enrolment in our universities continues to increase every year and, as you know, we will be facing a double cohort a few years from now. We do have to recruit many more faculty members, and as we are doing so, we are recruiting in an incredibly competitive market right now, particularly in the key area of science and innovation.

The second element in the budgetary strategy is to make sure that we have in place good programs to support those individuals who are so important for science and innovation when they are with us. We have a very rich suite of programs currently in the Ministry of Energy, Science and Technology. What we do need, though, is to make sure that we replenish those programs; because of the fact that they're rich programs, they also have a higher-than-expected uptake, and at the moment it is projected that their budgetary allocation will not be sufficient for the programs. In fact, they will expire before the anticipated time horizon. We need to make sure that we keep those good programs working.

In particular, in the Ontario Innovation Trust, we know that we're going to be running out of funds if we don't replenish that fund. It's a very important one, particularly because it has a very high leverage potential. So it's important that this fund be replenished. Also, it is important for the mandate of the Ontario Innovation Trust to be expanded so that it can also provide support for operating use of the infrastructure that the province is investing in so that we can make sure that these infrastructure investments are maximized.

We are also suggesting additional funding for one very good program, the Premier's Research Excellence Awards program. It's a wonderful program that recognizes and supports young faculty members in our universities. It has been enormously successful. Many of these young people have said that they wouldn't be here in Ontario if it weren't for this program, that this is really what makes their work here attractive and possible. We don't have a similar program for more senior researchers. I think this is a very vulnerable area, because many of the people we are at risk of losing are those people who are now starting to really make their mark. They're very attractive, we've invested in them, and now that they're about to give their return on that investment, they are being grabbed by other provinces and by the US. We need a program to make sure we don't lose those people, because that's a loss not only of good leaders, but also of an investment that we've made.

We have another program in that suite of programs within the Ministry of Energy, Science and Technology that has been very effective, particularly in enhancing the collaborations between universities and industries, and that's the Ontario R&D challenge fund. The suggestion we'd like to make here is to shift the role of government so that it becomes a lead investor in that program. We think it's important for the health of the program, particularly as we are moving to what appears to be a slower economic growth period, that government act as a lead investor and therefore act as the real engine of this program, and an engine of innovation.

The third area is to promote the movement of ideas, discoveries and new technologies to the marketplace and to society. The current assessment of the infrastructure in technology transfer and commercialization in Ontario is not stellar. There are many areas that need improvement, particularly when it comes to the very early stage of that technology transfer and commercialization process. We need to improve that if we want to make sure that those ideas and those discoveries turn into new companies, new processes, new products and new wealth creators.

Where we particularly need help is in infrastructure support to enhance those activities of technology transfer and commercialization in the post-secondary institutions, in universities and in the colleges, as well as in the Ontario centres of excellence.

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Many of our researchers are coming up with good ideas and with technological discoveries, but they do need help, particularly to add value to these technologies before they are ready to be moved to the marketplace or before they are ready to be attractive to venture capital investment. We need to be sure that we have in place the capacity to add value to those discoveries so that they can make their way to the marketplace. Otherwise they will just be left on the shelf.

We also need support for establishing a better environment for training individuals to work in this area. It's a very difficult job right now to attract and to hire people for technology transfer offices in universities or centres of excellence. There are simply not enough people trained in this province and in this country for these kinds of jobs, and yet they are very important ones.

We also need a better networking mechanism at the community level to facilitate commercialization, to network those spinoff companies, those innovators and entrepreneurs, to help them and support them in these activities. We had a meeting recently where we focused solely on commercialization. People were talking and dreaming a little bit about how they would like to see Ontario five or 10 years from now. Something that came up certainly was that what we in Ontario need are more places that look like Kanata, where you have that kind of a very lively, dynamic community of entrepreneurs and innovators, that kind of network. We need to promote that.

Finally, an area that would be very helpful for us as well is to have in Ontario a program that complements the federal program of industrial research assistance, the so-called IRAP program. This is a program that links spinoff industries with researchers so that they can get help in some of the technological challenges they face at the beginning of their company. It is one of the programs that many of the spinoff companies will cite as being an absolutely crucial element in terms of their ability to survive as a company because they were faced with technological research and development problems. They are too young and not rich enough yet to have the scientific advisors within their company. They need to find that scientific advice, and IRAP is one way that really helps them.

These are the main points. If I can summarize, we think we really need to invest a bit more in terms of putting this province on the map as a science and innovation leader, bringing people here and making sure they stay in Ontario, that they find a place here where they can thrive and, therefore, that they have the kind of support tools to do their work and to achieve their goals and, finally, when they have done so and have come up with these discoveries, that we can move them to the marketplace and that we have the tools, the infrastructure available to us to move them to the marketplace.

You'll see that with our brief we've also included the news releases that were prepared, first, when the Premier announced the formation of the council and then when the membership of our council was appointed. You'll have a good chance to see as well that we do have extraordinarily successful science and innovation leaders who are committed to working for the province to promote science and innovation.

Thank you for your attention.

The Chair: Merci, Dr Fortier. We have approximately three minutes per caucus. I'll start with the official opposition, Mr Kwinter.

Mr Kwinter: Thank you very much and congratulations on your appointment and on your new organization.

Years ago, when I was the minister responsible for technology, we had a conference with the federal government and all the provinces and there was a recommendation put forward that Ontario endorsed that 2.5% of all government revenues should go to R&D. We had trouble getting many of the other provinces to come on side, but certainly that was a goal that was supported by the provincial government.

Have you done any research to see if we're meeting that target?

Dr Fortier: We are currently doing research in this area. I mentioned our pilot project of benchmarking Ontario, so we're going to be looking at a number of indicators, such as the one that you are talking about, to see how we compare, not only with other provinces but also with areas, other jurisdictions, that are known as being leaders in science and innovation. We're doing the work right now as we speak.

We've already had a group of people within the ministry who have started to do a comparison with Massachusetts in this area, but I don't have the results yet of this benchmarking exercise. This is something we're intending to do and in fact we're intending to have something that will look like a little report card that we'll update on a yearly basis to compare ourselves with these other jurisdictions.

Mr Christopherson: Thank you and, again, congratulations on your appointment.

How often will the council be meeting?

Dr Fortier: We're going to be meeting, at the very least, quarterly, and the executive committee will be meeting on a monthly basis. That will be normally through teleconference, the executive group, but the full council quarterly.

Mr Christopherson: The budget of the council is what, annually?

Dr Fortier: It's half a million dollars.

Mr Christopherson: You're the only full-time appointee who's been named to it, or has everyone?

Dr Fortier: No. Of the council members, there are no full-time appointees. We have a secretariat that supports us. It will consist of three full-time members. Just to put that in comparison, we're hoping to be a lean but an efficient council. The similar council in Quebec has a full-time chair and a 20-member secretariat. All members of our council are working on a voluntary basis. We were told that we would get pay of $1 tax-free a year.

Mr Christopherson: It's nice to be in a position to be able to offer that. The only thing I would advise, and I don't advise the government often, but don't use your acronym, whatever you do.

Dr Fortier: We use it in French. It's COSI.

Mr Christopherson: Ah, COSI. Well, that scares me, as a member of the opposition. Thank you very much.

Mr O'Toole: Thank you very much personally and, again, congratulations. But more important, thank you and the members of the innovative group of thinkers. Certainly that's what we've been hearing, not just today but all along, was building the whole infrastructure piece, and perhaps I'm repeating, but to respect your input and recognizing what you were really asking for was the government to continue, whether it's the Premier's research excellence awards or the innovation trust and other programs you didn't mention-ATOP, which is access, building the right client group within the academic group, with which you're very familiar, and the strategic skills investment, perhaps funded by a different ministry. But I couldn't agree more.

We've heard the need for supporting what you could call the quality of life, or you could call it a healthy society. I think our collective goal, as well as yours, I'm sure, at the end of the day is sharing that accumulated wealth of the country or province.

If we were to take a specific initiative in this area, could you boil this down and say-I think Mr Kwinter mentioned it-a percentage of GDP or a percentage of the budget? Is there something we could do? Because unless we build that entrepreneurial, innovative kind of culture, we just aren't going to be able to tax everybody to death to pay for these things that aren't accountable. What would you give us as your most prominent piece of advice?

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Dr Fortier: I think we have to have a very coordinated and comprehensive approach. One of the things I did not mention, because we're still doing work in this area, is the whole issue of promoting science and innovation from day one, basically. We need to start in daycare, kindergarten, primary school and secondary school-all the way. This kind of culture, which is really the foundation of economic and social prosperity, has to be a culture that permeates all of our society, and it starts from day one. That's where we need to put a lot of work.

Right now, I would say that the biggest challenge we see is in attracting and retaining the leaders of science and innovation. They are in high demand. They are incredibly sought after. They are being courted; they are being made incredible offers. This is what I think is the biggest challenge that we have now: to make sure they stay in Ontario, that they come to Ontario and stay in Ontario, because without those leaders we will not get there. We need those leaders to serve as promoters, role models. We need those leaders so that their influence makes its way right through to the primary and secondary schools, all the way to commercialization in the marketplace. If I were to name one thing that I'm particularly concerned about, it is that one.

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

ONTARIO AGENCIES SUPPORTING INDIVIDUALS WITH SPECIAL NEEDS

The Chair: Our next presenters this afternoon are representatives from the Ontario Agencies Supporting Individuals with Special Needs. I would ask the presenters to come forward and state their names for the record, please. On behalf of the committee, welcome. You have 30 minutes for your presentation this afternoon.

Ms Mary Frances Taylor: Thank you very much, members of the committee, for agreeing to hear us today. This is a new venue for the OASIS agencies, so we hope that our presentation is of use to you. If there is additional information that you need, please speak up and we'd be happy to provide it.

My name is Mary Frances Taylor and I'm a vice-president of OASIS. The other presenters with me today are Cathy Wood from Ottawa-Carleton Lifeskills, and David Ferguson from the Ottawa-Carleton Association for Persons with Developmental Disabilities. Dave is going to hopefully work the slides for our presentation. OCAPDD's treasurer was hoping to be with us today, so he may join us in a few minutes.

Mr Patten: Mary, is this the same as the hard copy?

Ms Taylor: Yes, it is. We can probably do at least the first page. That just tells you what OASIS stands for. It's an acronym for Ontario Agencies Supporting Individuals with Special Needs. It's a province-wide association and there are 76 agencies that belong to OASIS. These agencies provide services and programs for intellectually handicapped adults and children.

One of the OASIS missions is to work with government to improve the development of cost-effective quality supports for individuals with intellectual disabilities. All of the OASIS members, all of the agencies, are in the business of directly delivering services or supports to intellectually handicapped people and their families. Basically, they are all transfer payment agencies.

Ms Cathy Wood: The individuals we serve are really quite limited and impaired intellectually. We refer to them as developmentally disabled, but we formerly knew them as mentally retarded. The causes that have put them into this category, if you will, are genetic difficulties, birth trauma, illness and accident and a host of other things that may have happened during their lifetime whereby they need this type of support.

They require a wide range of supports to live in the community. Flipping through to the next page in front of you, the individual needs are quite sophisticated and we have seen that over recent years they're becoming more and more disabled. People who require total care may be using G-tubes or J-tubes for feeding, with special diets; many of them require sophisticated medical care, psychiatric care, many of them with dual diagnoses; many need behavioural interventions, are physically disabled and have geriatric needs as our population is getting older.

Ms Taylor: In terms of the services that are provided for the intellectually disabled, this is really what the OASIS agencies do with their tax dollars. I think it's important to remember that every one of them is an instrument of public policy in Ontario. OASIS agencies are social service agencies and they deliver publicly funded and regulated services. Those services range from residential care, where we operate group homes, supervised residences, apartments that may have one supervisor for a number of apartments for our clients, to approved home programs and supported independent living for those clients who can live on their own but require someone to check up on them every once in a while and see how they're doing with their finances.

We operate day programs and supervised contract work programs, which you often hear referred to as sheltered workshops; supported work programs, which our higher-functioning clients have; and programs that we hope will lead to the clients being able to get independent employment in the community.

It's important to also remember that all of these programs require the OASIS agencies to be owners and operators of real property and to have capital equipment. All of these agencies are employers with all of the requirements that go with managing property and managing staff.

As I've said, some of the programs are quite straightforward, but others can include specialized programs because many of our clients have complex medical needs and psychiatric diagnoses, so that means that our staff have to be able to administer medication and able to respond to the needs of the medically fragile. The reason we're telling you this is that when we get to the staffing aspects of our programs, you'll see that we can't just hire anybody; we have to be careful about who looks after our clients.

Basically, our agencies are responsible to the disabled individuals they support, to their families, and to the community, and most of them report to volunteer boards of directors. The boards of directors are accountable, of course, to the Ministry of Community and Social Services.

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So that's what we do, but sadly there's many things that we are unable to do. That's really why we're here today, to tell you what we are unable to do for clients and what concerns that is causing in the sector.

We have right now in Ontario very long and growing waiting lists for services. One province-wide estimate is that there are about 8,700 persons who are not being served at this time who are waiting for services of one kind or another. Our existing programs are in fact serving more individuals than they are funded to serve but the agencies have tried their best to serve the community as best they can.

Another serious issue for our sector is the lack of support for aging parents. We have a number of parents across the province who've cared for their developmentally disabled children at home rather than send them to institutions or send them into programs. Now, as they grow older, they're looking for programs to help them to manage to get some respite care for themselves but also for long-term assurance that care will be available after their death. We find this is a very serious concern. A number of parents who are in their 60s, 70s and 80s who have a developmentally disabled child say, "What is going to happen when I die?" That we have no answer for at this time.

In terms of the agencies themselves, many feel that they cannot deliver any longer the services that they've been mandated to deliver. They cannot operate within their current funding levels. Almost all the agencies across Ontario are operating in deficit positions and have been for a number of years.

The agencies cannot recruit, retain and train staff, and that is the major crisis that we have come to talk to you about today.

Ms Wood: There are some causes for this, of course. We have been experiencing reduced funding levels for over 10 years now. One provincial estimates study has shown funding levels have reduced by 6.5%-lower today than in 1991. However, most agencies actually have done their own estimates of this and think it is actually quite a bit higher than that.

While this has happened, we have been experiencing increasing costs at the same time. The cost of staffing has become so much of a difficulty for us, we really are in a crisis at this point where we literally cannot cover shifts at our group homes and in our day programs for our most disabled people. We have had no cost-of-living increases, or COLA, no adjustments in this area since 1991, so as our costs for fuel and other occupancy costs have continued to rise we have not had revenues to match those costs. It has put us in a very difficult position.

Increased statutory employer costs have been levelled on organizations in the last couple of years, more so than in previous years, but it has assisted in the mounting stress on organizations; such legislation as pay equity when we haven't got the money to pay the employer statutory costs of 1% related to that. Additionally, we haven't got the funding that has been basically attributed to that legislation. And we have all experienced huge premium increases in the area of WSIB, Workplace Safety and Insurance Board expenses.

What has been happening is that the quality services depend on commitment and skills of a qualified direct care staff in order to deliver services to our most fragile individuals. Our services are highly labour-intensive at a front-line level or direct care service level, and on average 80% of our agencies' budgets would be attributed to direct care staffing.

Our association, OASIS, has done a provincial recruitment and retention survey which we just finished in October 2000. The survey was directed to not just management personnel, human resources and agency executive directors and boards, but front-line staff, those who have remained in organizations and those who have since left organizations. We felt that it was quite broad in its scope.

The findings are rather alarming:

Seventy-one per cent of all programs for the developmentally disabled now operating in this province are operating with less than full-time staff complements. So we're going short-shifted, if you will, in our group homes and day programs of whatever varied type.

Thirty-seven per cent reported that the needs of their clients, the disabled people, are not being fully met. We believe we are at risk of major accidents and injuries to our clients as a result of unqualified staff and not enough on shift.

Forty-nine per cent of agencies have lowered their recruitment standards and are now using unqualified staff. This is a dangerous position for us to be in when we're talking about J tubes, G tubes-all kinds of total care individuals who otherwise would be at the expense of living in hospitals or other facilities of that nature. Our per diems are considerably less in group homes, for example, than many of the other health care service providers' costs would be.

Seventy-two per cent reported overworked, stressed and burned-out staff. Agencies frequently have been forced to breach statutory employment standards. It isn't unusual to interview an organization that has had staff work double, triple and quadruple shifts in order to cover the needs of their clients. There simply are not enough staff out there who are interested in working in the kind of field we currently are in.

Sixty-nine per cent of our agencies had increased staff turnover. Here in Ottawa alone I'm aware of organizations that have had 44%, 46%, 50% turnover in their staff in less than a year's time.

Sixty-three per cent of the organizations responding reported urgent needs for staff training. That really goes hand in hand when you have tremendous turnover and you're having difficulty finding qualified staff.

Fifty-seven per cent of agencies, as a result of all these stressors, have reported an increased use of sick time, resulting in increased overtime and other costs related to relief staff costs and, of course, increased insurance premiums.

Most troubling, 100% reported an increase in work-related injuries to their staff. I think it's clear that we are in a very bedevilled position. Our local colleges are reporting to us that they're unable to attract full recruitment at the student level into the developmental service worker program, the social services worker program, the early childhood education program and programs that serve people in our community.

A recent KPMG study showed a salary/wage differential of approximately 25% to 30% less for staff in the developmental services sector compared to employees in the broader public sector who are serving the same client population. We in Ottawa-Carleton have done some surveys of our own, secondarily to the province-wide survey, and we have found these figures to be absolutely correct.

We have a staff turnover rate of over 22% across the province. I mentioned earlier that it was to a greater extent in many of the urban centres. Certainly it is in Ottawa, Toronto and Windsor. Some of the larger cities across the province have experienced a turnover much greater than the 22% average.

As an example, within Ottawa there exists a wage gap of $9 per hour between organizations that are actually doing the same kind of work. This was determined through the survey we did last summer. Some organizations are paying their staff around $10.50 per hour-and that would be a university degree or college diploma program-right through to now $19.25 per hour, which creates tremendous difficulty in terms of competition in recruiting staff to do the same work here in our own city. The same story is true across the province.

Within Ottawa, as I mentioned earlier, some of us are experiencing a 50% turnover and are very leery of the difficulties we are having in delivering excellent services, or even close to excellent services, to our front-line folks.

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Ms Taylor: This situation, of course, hasn't come upon us overnight. Those of us who are on boards of directors have been living with it for a number of years, and we have been doing things to try to adjust to the funding problems we've had. Certainly we've reduced staff; we've reduced the management and administrative staff first, and then when we've had to we've gone into direct-care staff. We have economized, rationalized and minimized our services. We've tried to strip our administrative costs to the bone. We have certainly deferred staff training. We have very often deferred repairs to our property, repairs to the vehicles we operate, and we've not been able to do any expansion, even though there has been an increase in the number of people looking for services. We have increased our efforts to raise private funds, and that, of course, always seems to be an easy answer: go out and do more fundraising. But it's not always easy in some of the communities where the OASIS agencies are found.

So we have come to what we feel is really a major crisis in this sector. We know that of course you've got many people coming to you looking for funds at budget time, but we really felt that we had to bring this to your attention because this is a population that's not popular. It's not an easy cause. We don't ever want to feel that we're in competition with others who are looking for funds from you, but please don't forget that we are here.

Funds, we feel, are urgently and immediately needed to address staff salaries. We must do something immediately about that 25% to 30% wage gap. There must be significant base funding increases to address the community needs. Those three issues that we feel need to be addressed are: the long and growing waiting lists for services in communities in Ontario; we need to address agency operating deficits; and we need to do something about the needs of aging parents of developmentally disabled adults and children.

Thank you very much. That's the end of our presentation. Mr Doug Ward has joined us. He is sitting over here to my left.

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

Mr Christopherson: Thank you for your presentations. I just wanted to go back. I'll start with the adult children and that concern. I've had that in my constituency office. I've had parents come in, both individually and city-wide groups, saying, "What are we going to do? We don't expect to be here in 15 or 20 years. We're not independently wealthy; there's not enough in our private wealth to sustain this kind of service." I jotted it down when you said that you don't have an answer for them at this time.

As I understand it, this is different from the historical context, because it has only been the last couple of generations where we've recognized that the ability to keep an individual at home benefits the family, benefits the individual and can be cost-effective. What happens now, while we're still on the edge? You say, "We don't have an answer at this time." What happens? Do they just go into an institution? What happens to individuals right now, without plans, while we get caught up with it in the bulk of the people, with the boomer generation still being a bulge of population? It has still got to be happening to individuals. What's the reality right now, as we speak?

Ms Taylor: I'll maybe let Dave or Cathy answer as well, but my understanding is that the reality is that the parents are doing the best they can, and they are taxing themselves. Their own physical health is suffering. Occasionally, they are able to get relatives to come in, but basically they are just doing the best they can. We heard stories of 80-year-old parents who are driving their adult children 30 or 40 miles to a day program.

Mr Christopherson: I was seeking the scenario where the parents have passed away and the adult child is 55 years old, 50 years old. What's happening? What happens in that case, where there's no family money, no family attachment, the parents die and the adult with the disability is there? What happens right now?

Ms Wood: If there isn't a next of kin to pick up the responsibility, an organization called Service Coordination-I'll use the example of Ottawa-will try to refer that person to one of the current organizations. The difficulty is that they're really at a stalemate in having to go to the province and ask for special monies, not well-planned for, unfortunately, to serve those individuals, and it generally ends up at a higher cost.

When we know these people are there and we can plan for them in advance and we know their names and we know everything about them and we know their situation is in dire straits, it is far better for us to get at that planning and do something about it than to have them picked up in a crisis position, when they are put wherever there can be found a space or an expanded space.

Mr Christopherson: The answer is that it's ad hoc, do what you can.

Ms Wood: It's ad hoc, do what you can. Most often, they'll move from one parent to another member of the family. As Mary Frances said, and certainly my own experience is that most of the new referrals that I received last year-in fact all of them-came to our agency in crisis, and all of them were from parents who were 80 years or better.

Mr Arnott: Thank you very much for your presentation. I'm concerned, like you are, about the issue of aging parents with children with developmental handicaps and how we can help them, provide reassurance that once they are no longer able to look after their children there will be something there for them. We heard about this issue in Toronto before we came here. There was some reference to the fact that the government had allocated about $50 million, if I'm not mistaken, to help solve that problem. But I understand it wasn't even close to meeting the need in Toronto. Have you quantified the degree to which you need resources in Ottawa? How many families do you have waiting for this kind of help?

Ms Wood: There are 250 individuals in Ottawa now waiting for services in either day programs or residential.

Mr Arnott: I'm not authorized to speak on behalf of the government on this issue, but I want you to know that there is a considerable number of members of our caucus who share your concern and would like to see this issue resolved, so we will be taking it forward on your behalf. I want to thank you very much for your presentation.

Mr O'Toole: You mentioned two important things. Currently, do you have a deficit, and what is it? That's the first one.

Ms Wood: My own agency's deficit is about $250,000.

Mr O'Toole: That's an annual deficit?

Ms Wood: No, that's cumulative. I'm operating this year with $160,000 to add to that.

Mr O'Toole: I have just one last question. You mentioned also the wage crisis. I'm not in any way in contradiction with that; I just want to understand. Between $10 and $19, where do you fit on that scale yourself?

Ms Wood: My own agency has recently received an increase as a result of a labour action under HLDAA legislation, the hospital-arbitrated legislation. So we have moved up to $18.90 from $14.40. We were one of the lower-paid agencies until that time. The funding has not been secured. It's a matter of some fiscal-

Mr O'Toole: You'll carry it as deficit.

Ms Wood: Yes.

The Chair: To the Liberals. Mr Patten.

Mr Patten: It sounds like you're in dire straits. What is the overall number of how many people are served? You've got a waiting list here of 8,700. How many people do you serve across the province, all these agencies?

Ms Wood: Richard, we actually tried to find that number out, and we were not able to find it out. What I can tell you is that it's greater than 1,500 who are being served here in Ottawa-Carleton, with about 500 on the waiting list yet. I don't know if you could do a pro rata across the province in terms of an extrapolation of those numbers-probably not-and have it correct. We were unable to find out the exact number of people receiving service across the province. We were afraid you might ask that question.

Mr Patten: A ballpark figure of 50,000 or something in that neighbourhood?

Mr Douglas Ward: It wouldn't be at all surprising if it was more than that.

Ms Wood: I think probably more than that.

Mr Ward: Very likely more than that.

Mr Patten: Anyway, there's obviously a crisis here. Has the auditor general approached you on any of this? Have they looked at this area? Are you aware of it?

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Ms Wood: Not that I'm aware of.

Mr Ward: The Provincial Auditor?

Mr Patten: Yes, the Provincial Auditor.

Mr Ward: The Provincial Auditor has commented in the past on the administration in the sector, but the Provincial Auditor, to the best of my knowledge, has not approached individual agencies or somebody like OASIS representing the agencies.

Mr Patten: I have lots of questions but one is on pay equity. Many of these organizations are providing services that the government has mandated and are acting on behalf of the provincial government but are then forced to pick up the costs of pay equity. In order to pay for the pay equity costs, they must take from other parts of their budget, with no additional support from the provincial government, even though the provincial government is the one that is dictating that the pay equity should be implemented. Is that correct?

Ms Wood: That's correct.

Mr Patten: What is the significance of that in terms of general dollars or ballpark figures for your agencies? I'm aware it cuts across many sectors.

Ms Wood: I believe it's in the range of about 1% of statutory costs the employer would pay of pay equity. So, for example, if $100,000 was received, the employer would have an expense relative to the statutory costs. I think I'm incorrect on the 1%. I think it's actually significantly greater than that. I know our own agency's costs are in excess of $70,000, cumulative. Before I ever start budgeting, I'm in trouble $70,000 just with the subject of pay equity.

Mr Patten: So you probably have to cut staff and cut programs in order to keep certain staff.

Ms Wood: Continually.

Mr Patten: You continue to operate with fewer services and less staff to do the job.

Ms Wood: That's right, to still operate outside of the statutory requirements of an employer.

Mr Ward: If I might comment very briefly in response to Mr Arnott's reference to the $50 million, yes, indeed, there was an additional allocation of $50 million. There were a number of purposes attached to that $50 million. The problem of aging parents was one of them. It was not devoted exclusively to that topic. There were other specific targets in the developmental service sector.

Mr Arnott: That's why I was asking the question.

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

Our last presentation, and I know it's been a long day, but it's only half an hour, is from Child and Youth Friendly Ottawa. It's my understanding that the presenter is here but he's just stepped out. We'll take a recess to find our bearings.

The committee recessed from 1654 to 1655.

CHILD AND YOUTH FRIENDLY OTTAWA

The Chair: On behalf of the committee, welcome. Could you state your name for the record. You have 30 minutes for your presentation.

Mr Marc-André Belair: My name is Marc-André Belair. I was the federal Progressive Conservative candidate of record for Ottawa-Orléans.

I'd just like to wish you a good evening and thank you, Mr Chair. It's my pleasure to be able to stand before you today, or sit, in this case. I was asked by my esteemed colleague, David Millen, of Child and Youth Friendly Ottawa, to speak to you today about the lack of youth representation in our decision-making processes.

There seems to be a certain cynicism among youth these days concerning the adult world. They have lost faith in our system. They feel as if they have no say, no means to express their dissatisfaction. When young people are unable to express their dissatisfaction through conventional means, they will often revert to means that are not socially acceptable. They will throw rocks. But this rock carries a message of suppression and frustration.

So how do we prevent our young people from throwing such rocks? Although there is no easy answer, many would suggest putting more police on the streets. This may be effective to a certain extent, but this measure could be seen as draconian and perceived as a further suppression of our young people's message. There is no easy answer.

However, some options do exist that would empower young people, that would give them a sense of control and a feeling of pride in their institutions. The option that I'd like to present to you is the concept of youth representation in our political processes.

I must commend the committee for allowing a few youths, such as myself, to sit on this panel today. However, I still get the impression that there is a certain amount of tokenism in these sorts of consultative processes. The government of Ontario must make a habit of encouraging young people to stand before and even sit on committees such as these ones. Young people will be the ones taking over this country. Does it not logically follow that we should encourage them to get involved while they are young so that they have a chance to develop a sense of ownership and pride in their institutions?

It's a shame that our society supports the misconception that young people are not capable of making a difference. If anyone thinks that, they're wrong. Young people have the capacity to do some incredibly amazing things. Unfortunately, they're not given the chance and freedom to really shine. We don't give them more than a token place at the table.

If we actually listened to what young people had to say, instead of telling them what to think, I would not be too surprised to hear of young people not only getting involved but demonstrating the fervour and zeal that only young people can exhibit. But I can also see that their fresh point of view would provide a unique and refreshing perspective on issues that you are all here to examine.

I encourage the standing committee on finance and economic affairs to consider my suggestions in your future deliberations. It has been said many times that young people are our future and it would be truly a waste and a shame to waste this precious resource of talent and young thinking. When deciding on matters of economy and finance, I encourage you to offer young people more than just a token place at the table, but instead a real opportunity to express their views and to effect change in a system toward which they have become jaded. Thank you.

The Chair: Thank you. We have about eight minutes per caucus and I'll start with the government side.

Mrs Molinari: Thank you very much for your presentation and for taking the initiative to come forward. I'm a little disappointed at your cynical view of young people. As a mother of two boys, 25 and 22, I certainly value their opinion and their forcefully putting their opinion forward every chance they get. Within a number of our offices there are a lot of young people who contribute quite extensively to a lot of the decisions and input that we have.

In your presentation I didn't hear any recommendation or any specifics that you would see that we could do as a government that would respond to some of the concerns you've expressed here today. Can you tell me about some specifics that you would like to see implemented or initiated that would address the concerns you've expressed?

Mr Belair: Certainly. I would certainly encourage the government to get more young people on board, such as these. There doesn't seem to be an active solicitation of our young people in terms of getting them out and expressing views, especially marginalized youth. They are often forgotten in our system. We just don't tend to value their opinions. I do agree that the government has taken many steps to help and bring forward some more young people. Yes, there are some examples of young people, such as your own children, who will get out and actively solicit.

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But the problem is that most young people do not know where to go and there just needs to be more active participation on behalf of our decision-making entities to really show young people that there is a place for them at the table. A lot-and I do mean this based on my experience as a mayoralty candidate and as a federal Progressive Conservative candidate-of young people who talked to me said, "You know, it's great what you're doing but they're just going to look down at you and say, `Ah, he's young. He can't do anything.' You'll be offered a place at a table every so often but no one's really going to listen to you." I think that's the overwhelming opinion of a lot of young people.

I would like to see the government encourage more young people to speak at these sorts of hearings. I know they are open to the public but young people really don't know where to access these kinds of committees.

Mrs Molinari: How would we do that? How do you see us encouraging, because these hearings are put on the Web site, they're published throughout. How would you see us doing that-actually reaching out to the youth and young people?

Mr Belair: I think there needs to be some awareness campaign implemented. You won't see very many 15-, 16-, 17-, 18-, 19-year-olds who really are marginalized go to the government of Ontario Web site and actively look for a committee that they can speak on. They just don't know where to find this information. A lot of these young people just go to school, if they're lucky; they go to university if they're lucky. Otherwise, they fight for their existence. So I would suggest that there needs to be some sort of awareness campaign in order to get more people involved.

The Chair: Mr O'Toole.

Mr O'Toole: Thank you for being here today, because you're speaking exactly toward the issue you're raising, so I'll give you credit for that. I would encourage more young people to do it. I really quite genuinely mean that.

As a parent with five children, all of whom I believe have been somewhat animated-and I've been somewhat aggravated, I suppose-but no, you have to somehow change the scales and that's by sometimes provoking.

I would say, without trying to turn this into a political thing, the requirement of having a school trustee be a youth is one initiative. Some say, and I don't mean this but it's been said to me, that it's a sort of a token thing. I know the trustees in my area are a force to be reckoned with, specifically on the lack of extracurricular activities. They've been the only sane voice. In fact, they've carried it rather dramatically, I might say, to the streets. I can't say I encourage dissent, but they did get my attention right in front of my constituency office.

There's a number of programs: the summer youth employment opportunities, an extremely important Web site for that for young people. It's a huge initiative and commitment by the government.

Another one: today is the last day for high school students to apply to the Lieutenant Governor's awards, an internship I believe for-I forget how many students. That's also on the Web site.

I think all parties tend to recognize the importance of all of these things we're talking about: education, young families, Ontario's Promise program. I think the radar's kind of moved a bit.

The research council mentioned attracting and retraining our youth. Several presenters today mentioned it and I, for one, thank you for being here. Keep up that kind of diligent, responsible, mature presentation stuff. I personally think you are being listened to. Thank you.

The Chair: Mr Kwinter.

Mr Kwinter: Thank you very much for your presentation. I welcome your comments. I don't agree with a lot of them and I want to give you a few examples.

Probably 20 years ago, a young man was elected mayor of Brockville. The youngest mayor in Canada, he was in his very early 20s. He was elected mayor.

I used to be the vice-president of the Ontario College of Art and we instituted a unicameral system of government. It was the first post-secondary institution that had students on their governing council. That was 20-some-odd years ago.

Every political party has a youth wing. Every riding association, when they send delegates to their conventions, have to send a fixed quantity of youth-that's mandated.

If you take a look at our page program at Queen's Park, we have grade 7 and grade 8 students getting an opportunity to see the government in action, and from that we have lots of young people who, because they become sensitized to what's going on, become involved. There are a whole range of things like that. All you have to do is take a look at the Globe and Mail this morning. There was a 12-year-old on the trade mission to China with the Prime Minister. He's an entrepreneur at 12, and he's on that program.

Mr Patten: He lied about his age. He was 11, actually.

Mr Kwinter: What I'm saying is that the issue you are addressing is not exclusive to youth. There are lots of adults who don't get involved, don't know how to get involved, don't make their presence felt. So as I say, I welcome your input and I welcome whatever you can do to get young people involved, but I can tell you, don't sell short the young people who are out there. There are some fabulous young people out there doing incredible things.

I just finished reading a book-I haven't quite finished it-called Sale of the Century. It deals with Russia and it talks about these oligarchs and how these people become billionaires. The most incredible thing, when I read it, is that they're 23, 24, 25. They had been suppressed for so many years that finally, when they had the opportunity, they just went for it-mind you, they got into lots of problems because they literally expropriated everything, but they were young people. What I object to-and as I say, I don't mean this in a negative way-is I think you're not giving the young people as much credit as they deserve.

Mr Belair: I will agree with you that there's a handful of people out there who are doing some really spectacular things. Unfortunately, it really doesn't account for the growing feelings of disillusionment and cynicism that young people are expressing today. You see a few examples of people doing spectacular things, which is great, but they account for even less than 1% or less than 0.5% of our young people. These people tend to come from privileged backgrounds; they tend to have high scores in high school and in university. We're not talking about the average student; we're not talking about the average youth here. That's what I'm concerned about. I'd like to see more average people getting involved-and I don't mean the term "average" in a derogatory fashion or anything; I just mean people who don't come from privileged backgrounds, whose parents aren't in the upper-income brackets. These are the young people we need to engage, because these are the young people who are suffering the consequences of mismanaged government dollars.

Mr Patten: You've talked about youth. I presume that's sort of the teenage group and up. Could you talk a little bit about the organization you represent in terms of Child and Youth Friendly Ottawa? I think there's a concept there that you haven't shared yet, a pretty neat concept that has been catching on throughout the city and the area and that the members would be interested in hearing about.

Mr Belair: I believe Alexis will be more adept in answering the issues on Child and Youth Friendly Ottawa.

Mr Alexis Carty: My name is Alexis Carty. I work for Child and Youth Friendly Ottawa as a coordinator.

To put it in a nutshell, we've always had a very difficult time describing what Child and Youth Friendly Ottawa is. One can literally say that's what it is: it's child- and youth-friendly. We try to ensure that Ottawa has a child- and youth-friendly city. We believe-and I'd like to think this is represented here in this room as well-that the health and welfare of a child or a young person is directly related to the health and welfare of a province. One can easily judge a province by seeing how socially well-adapted their children are, how employable their youth are. It's one of the things we try to ensure, that this city as a whole comes together and works toward community engagement. I think that's pretty self-explanatory, but I wouldn't mind breaking it down.

In community engagement, what we're really hoping to see is a lot of businesses taking it upon themselves to work directly with youth, to see a lot of adults, such as yourself, Mr Arnott, work with youth directly. The key here, we find, is that children and youth tend to have the feeling, as you so aptly put earlier, that a lot of people are not paying attention to them. They feel a lot of people don't care about how they feel or about their direction or future until it's too late.

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I know the government on the whole has placed a lot of money toward at-risk youth, and rightly so, though I feel one of the things Child and Youth Friendly Ottawa seeks is to have any kind of money that could be directed, placed toward more well-adapted children-we have no problem whatsoever representing "well-adjusted" children as such. What we're gearing to see is that more money is placed toward mentoring programs, sports camps, YMCAs, boys' and girls' clubs-initiatives of that nature-for this is where your community leadership comes from.

Mr Kwinter talked about the 12-year-old who went abroad on that trade mission. I think that's incredible. I look at people such as Craig Keilburger as incredible. But when I think of that as incredible, I think, "Shame on me. Why should that be incredible? Why should that not be the norm?" I continually see bright people around me, and I have a feeling that when you were young men and young women you probably thought of yourselves as fairly bright with ambitions and goals and dreams, and we like to see them all come to fruition. To see that come to fruition involves community engagement. It involves all of us coming to the table-which is a lovely quote; it's one of my favourite ones, by the way-and breaking bread and understanding what we need to see happen. We don't want youth-everyone's children, everyone's youth-to be viewed as a special-interest group, not in the least, because they're not. Seeing them raised to become socially adaptable, to become employably viable is everyone's responsibility. Let's be realistic. They're going to be paying for our futures. They're going to be taking care of all our debts. We need to make sure that these are the type of people who have a future, something to be proud of, something they can grow up with.

Child and Youth Friendly Ottawa-and I'm sorry I kind of got off topic a bit, Mr Patten-is four years old. It started in 1997 through the vision of some workers from the children's aid society, Mr David Millen, and through the help of Max Keeping and the Catholic school board. What Child and Youth Friendly Ottawa has sought to address is the growth and development and the health and welfare of our children and youth.

Toward that end we've been working on a number of government initiatives and local business initiatives-a program such as Youth 2000, where we help youth find jobs in the Ottawa-Carleton region, not by creation but by convincing employers that the next person they should hire should be a youth, making them realize that that 16-to-24-year range is an exceptionally exciting time to be working and to have that kind of energy and catalyst behind your organization is strong.

The Chair: Thank you very much. We've run out of time. Mr Christopherson.

Mr Christopherson: Thank you both very much for your presentation. The first thing I want to say is that both of you are making me feel really old, at a point when I'm very tired at the end of the day.

I have a couple of thoughts and maybe a question. I heard two presentations. One was sort of about the process of Parliament and having representation, and the other was more directed toward the specifics of where you think the emphasis ought to be in the next budget.

I'll take one of your last points first, if I might, when you talked about hiring a young person. I'm sure you can appreciate that an employer would hear that argument and would also receive pressure to hire an older worker who may be caught between being too young to retire and not able to continue in the job they were in. There's pressure to try to give them employment to get them to 60 or 65 until they can hook up to their pension.

There's good reason for an employer to respect that pressure if they can offer someone an opportunity they wouldn't otherwise get so they're not thrown on the social scrap heap at the end of their life either, as opposed to your argument that they're not being given a chance to join in at the beginning. You've got pressure to take a look at hiring a woman where you can and everything else is equal, to take a look at an opportunity to hire a visible minority or someone who has a physical or intellectual disability where you can and everything else is equal. There are a whole lot of pressures on employers and on society. If you want to comment on that, I'd appreciate it.

The other thing I would ask you is on the budget itself. Given that you're here and have certainly made your case that there is a perspective that is not being represented as well as it could be, what do you think would be in the best interests of our young people in terms of how the budget should be shaped?

Mr Carty: If I may respond to the former of your statements, I believe the pressures are very great on society. I don't, however, believe the pressures are very great on businesses. Businesses really tend to feel they'll hire who they want to, who they need to, quite evidently who they feel is the best for the job, actually maintaining some basic biases as well with regard to what youth could possibly bring to the table. Again, when people hear "youth," they think of the media images that have been conjured up thanks to MTV, thanks to certain productions on television. They have a conception of what youth are.

I clearly feel it's in the government's best interests to see youth portrayed in a different light, to have youth envisioned in a more profitable way toward everybody, because youth do bring so much; it's not even funny. I think of the number of stories and anecdotes I have seen and heard since I started Child and Youth Friendly Ottawa. A classic example is about an 18-year-old who couldn't get into Sheridan College for graphic arts. They just felt that his development wasn't that strong, his marks weren't that strong. However, he was able to find a job working here in Ottawa pulling in close to $95,000 a year. Now, Ottawa is quite unusual in that respect because we have more young millionaires than I think anywhere else per capita in the world. Ottawa's very unusual, so I wouldn't want Ottawa to be viewed as the norm for Ontario.

Mr Christopherson: Nobody sees Ottawa as normal, trust me.

Mr Carty: I imagine not. To the latter of your statements, I really feel that-and I stated this before-an effort this government could really, truly make to make a strong impact and send a message is to clearly take youth seriously, to place a lot of emphasis and concern on their issues-issues such as basic safety, places where they can play safely, places where they can gather safely, places where they can share with like-minded people safely. I don't think I'm repeating the word "safely" too much, because it really is a strong word which we need to bear in mind. By putting money toward that end, to seeing, say, a boys' and girls' club grow and develop, to see, say, a Child and Youth Friendly Ottawa offer new and exciting programs to other organizations, to see basic schools have opportunities to extend themselves so teachers can go that extra mile they used to back in your day, Mr Kwinter-I'd like to see that come to fruition. I think that's where the government can really step in.

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

Mr O'Toole: Mr Chair, I'd like to entertain a motion to allow a couple of young people in the audience from Hastings and Prince Edward Developmental Service Providers-they've sat here all day. I wonder if we could give them five minutes to make their presentation. The bus doesn't leave till 6.

The Chair: In order to do it, I need unanimous consent. Agreed? So five minutes? Is that adequate? OK.

QUINTE VOCATIONAL SUPPORT SERVICES

The Chair: If you could state your name for the record, please. I think you presented us with a written submission earlier on this morning, if I recall.

Mr Patrick Connor: Yes, we have, sir.

Mr Chair, members of the committee, this is Tina Warren. She's the president of my board. My name is Patrick Connor and I'm the executive director of an agency known as Quinte Vocational Support Services in Belleville. I thank you for your time and for making time for us here this afternoon.

I have two reports that I'd like to offer you. One we have tabled in written form. That comes from a collective process of board presidents that we have on the go in Hastings and Prince Edward counties. There are some data in the particular report. Some of the comments of OASIS, to which agencies the board presidents' committee belongs-we really reflect some of those crises.

Our agency is a day support service provider. It relies on the residential service providers in our area for clients so that we can do our work. Their pressures are our pressures; we just react to them via a trickle-down mechanism, if you will. They feel pressure. We feel it down the line.

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Many of our agencies are arguing that there hasn't been a significant capital infrastructure. That places the residential service providers at risk. It results in the possible curtailing of service.

Where the OASIS agencies from Ottawa represented some, I think I heard 1,500, we've actually absorbed nearly 2,200 people into our community, what with the closure of Prince Edward Heights. We believe in that deinstitutionalization. However, we also believe in the support of community-based operations such as ourselves.

We would suggest, in the data in the forms provided, probably an infusion of about 15% on top of the $31 million that already flows into our area in order to meet that immediate crisis. That would be our particular request. Certainly, if the members of this committee could encourage the finance minister to listen to the Honourable John Baird when he makes his plea on behalf of our agencies in cabinet, we would certainly appreciate it if they were sensitive to his arguments, because we are passing these along to him as well.

The second part is really what I would like to allude to. There has been some controversy within the social service delivery sector about ODSP, the ISS and ESS component. All I can tell you is that it is a program that offers that mechanism in our community. We have been able, I believe since April 1, 1999, to offer this service to 30 individuals through our agency and we have been able to successfully pass 23 of those individuals through our program to reduced dependence upon social services.

The argument we're making here today is that the area where we could use the support of government, and from all parties, in fact, is the building of better relationships with our community through our MPPs, to have the help of the government in terms of building bridges to businesses that allow us an opportunity to provide work as an employer, but also to provide employment training. We've demonstrated a success that we're able to educate our client staff, through the acquisition of life skills, to provide them with independent skill sets so they can go out and function at minimum wage or better than minimum wage. We've been able to negotiate with companies for whole production lines, production lines of deaf people, production lines with sporting goods companies, not your usual sheltered workshop type of environment.

I think your comment earlier, Mr Christopherson, was quite right. Of the 118 client employees I have, 57 live at home. If we're able to set them up now through positive relationships with employers and maintain that, then what we're doing is actually providing a reduced dependence in the future on these residential settings, that are already in crisis, promote better independent living, reduce the dependence upon government and improve the quality of life.

My argument would be, don't forget the day support and the sheltered workshop options when it comes to weighing in the balance the needs of the residential service provider. I think what you really need is another viable mechanism that offloads those pressures, in terms of population management. I would encourage that on behalf of the parents within my group who are aging and are facing that crisis. If we can do more prevention now, it's going to save a lot more demands on the system. Of my population, 15% have been in conflict with the law and they've done time in detention centres.

If we can build in these mechanisms, like we have through good relations with the business sector, to provide them with a place to go, whether it's evening work or a morning shift-quite often, evening shifts give families back time that they didn't have before-we're building a stronger family infrastructure. We can build those relationships with business but we need an opportunity to do so. That would be my short sound bite.

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

On a personal note, I think it speaks very well for your organization that both of you stayed here all afternoon to take a chance of getting your 10 minutes in front of this committee.

Mr Connor: Thank you very much. We've taken a different stand than most of our organizations, but I think the independence of the client really speaks for itself in terms of strategy.

The Chair: With this, the committee is adjourned and we'll reconvene tomorrow at 9 o'clock in London.

The committee adjourned at 1726.

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