Committee Transcripts: Standing Committee on Finance and Economic Affairs - 2001-Feb-22 - Pre-Budget Consultations

Pre-Budget Consultations
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PRE-BUDGET CONSULTATIONS

ONTARIO HOSPITAL ASSOCIATION

ONTARIO ROAD BUILDERS' ASSOCIATION

ONTARIO FEDERATION OF LABOUR

ONTARIO CATHOLIC SCHOOL TRUSTEES' ASSOCIATION

ONTARIO RESTAURANT HOTEL AND MOTEL ASSOCIATION

ONTARIO PUBLIC SERVICE EMPLOYEES UNION

ONTARIO CAMPAIGN 2000

REGISTERED NURSES ASSOCIATION OF ONTARIO

ONTARIO LONG TERM CARE ASSOCIATION

CANADIAN FEDERATION OF STUDENTS

CAMPAIGN AGAINST CHILD POVERTY

ONTARIO HORSE RACING INDUSTRY ASSOCIATION

CANADIAN UNION OF PUBLIC EMPLOYEES-ONTARIO DIVISION

CONTENTS

Thursday 22 February 2001

Pre-budget consultations

Ontario Hospital Association
Mr Frank Norman
Mr David MacKinnon
Mrs Mary Lapaine

Ontario Road Builders' Association
Mr Rob Bradford

Ontario Federation of Labour
Mr Wayne Samuelson
Mr Ross McClellan

Ontario Catholic School Trustees' Association
Mrs Louise Ervin
Mr Regis O'Connor
Mr Patrick Slack

Ontario Restaurant Hotel and Motel Association
Mr Len Little
Mr Terry Mundell

Ontario Public Service Employees Union
Ms Leah Casselman

Ontario Campaign 2000
Mr Pedro Barata
Ms Lynne Russell
Ms Casey Ready

Registered Nurses Association of Ontario
Mrs Doris Grinspun

Ontario Long Term Care Association
Ms Vida Vaitonis
Mr David Cutler
Mr Fraser Wilson

Canadian Federation of Students
Ms Erin George

Campaign Against Child Poverty
Mr Gerald Vandezande

Ontario Horse Racing Industry Association
Ms Jane Holmes

Canadian Union of Public Employees-Ontario Division
Mr Sid Ryan

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 Joseph Cordiano (York South-Weston / York-Sud-Weston L)
Mr John O'Toole (Durham PC)

Also taking part / Autres participants et participantes

Mrs Lyn McLeod (Thunder Bay-Atikokan L)

Clerk / Greffière

Ms Susan Sourial

Staff / Personnel

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

The committee met at 1000 in room 151.

PRE-BUDGET CONSULTATIONS

The Chair (Mr Marcel Beaubien): Good morning, everyone. I would like to bring this committee to order.

ONTARIO HOSPITAL ASSOCIATION

The Chair: Our first presentation this morning is from the Ontario Hospital Association. I would ask the presenters to 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 Frank Norman: Good morning, Mr President, ladies and gentlemen. My name is Frank Norman and I am the chair of the Ontario Hospital Association board of directors. Joining me today is David MacKinnon, the president and chief executive officer of the Ontario Hospital Association, and Mary Lapaine, who chairs the OHA's advocacy committee.

Before we start, I'd like to say I'm not a health care professional nor am I employed in health care. Mary Lapaine and I are volunteers who have been privileged to serve in the health care system for many years, and for all its trials and tribulations, it's a very impressive system. There are more than 41,000 volunteers in the hospital sector and, like you, they are there to make a difference.

"What can we do to make a difference together?" is the theme of our remarks today. We could spend the time with you today summarizing the contents of our pre-budget submission, Future Health: Hospitals for the 21st Century, a very detailed and comprehensive paper that draws on extensive research and incorporates views of our membership throughout Ontario. Those views were reinforced as recently as yesterday afternoon when there was, in fact, a special general meeting of the association. I know you will find this paper, which describes the issues and opportunities facing hospitals today, useful. I would, however, like to focus my remarks on the opportunities within the upcoming budget to make a difference for health care in Ontario.

As you are well aware, there are serious challenges facing hospitals in Ontario and these can only be addressed by clear policy choices. Without thoughtful debate and resolution of key issues, the problems facing hospitals cannot be solved. The fundamental choices about how we deliver health care and how we pay for it cannot be avoided. To postpone these decisions may run the risk of moving health care into a different kind of system and one with unintended consequences.

I am suggesting that we make difficult choices, not because I would wish to see us move toward a different system for the sake of it, but to ensure that the current system is there for our children and our grandchildren. In short, the biggest risk to our health care system may be standing still or just tinkering with the current system.

I am now going to ask David MacKinnon to outline the issues that we believe are on the minds of legislators, health professionals and the public and to describe what we can do together to address them. From that, I would suggest that we can discuss the choices we have before us.

Mr David MacKinnon: From everything we have heard in recent months, including Mr Harris's comments after a recent meeting of the government caucus, the issues on legislators' minds about hospitals and health care are, first, how can we escape from what seems to be an ever-increasing health care budget, especially during times of revenue uncertainty? Second, will continued investments in health care put other essential public services at risk; for example, education and the environment? Third, what can be done to meet our health human resource challenges, absolutely serious challenges? How can we retain the health care professionals we have and recruit others we need in the face of worldwide shortages? Fourth, how can the system be made more patient- or consumer-focused and accountable to those who are paying for it, the people of Ontario? Next, how can medical practice be modernized to make the system more sustainable and affordable? Finally, and perhaps even most importantly, how can we enlist individuals into the important task of managing health care better and keeping the costs attached to it under control?

These are all formidable challenges. Each of them is formidable individually, but taken together they are very formidable indeed. In dealing with these challenges and reflecting on the need for basic choice, we really do not mean to imply that any one solution or path is available to take us where we want to go. Certainly, if any such a path existed we would have found it long ago.

Health professionals are all too familiar with grand designs for the future that prove to be unmanageable due to the incredible complexity of the system and the very intense values that different groups or individuals bring to it. Nor do we mean to imply that considerable progress has not been made. Progress has been made. Primary care reform is starting, hospital modernization is underway in most corners of the province and hospital report cards are just a few examples of progress in the system, and I could list many more. However, on balance, I think most who look at our system today would recognize, as Mr Harris did, that we need to search for further answers.

For hospitals, the reasons for this need to search further are clear. The financial pressures on hospitals and the health care system are absolutely inexorable and they face us every year. Every year, hospitals are faced with increased demand for more and better services. As our annual review of hospital finances shows, hospitals need an additional $400 million to $500 million every year just to keep up with population growth, aging and other cost pressures.

Over the last two years, medical and surgical supplies, including drugs, increased on average by 12% a year, well above the rate of inflation. Hospitals are already running at very high levels of efficiency compared to other provinces and US hospitals; however, they are constrained by the fact hospitals in Ontario have no cash reserves and many are purchasing goods and services on credit.

The pressures on front-line staff, as you will probably hear from the nurses this afternoon, are reaching unbearable levels, and yet we need to make sure we retain the staff we have, that they feel comfortable, and that Ontario hospitals become the employers of choice for future health care professionals. We're certainly not in that position today. I could go on.

We're not unsympathetic and we really understand the other side of the argument. It is no wonder that every year when we appear before this committee delivering similar messages, I can almost hear the groans from some committee members and from the Ministry of Finance and from much of the senior civil service. But the pressures are absolutely real. We understand that with the possibility of a slowing economy there will be pressures to cut costs. However, squeezing more out of hospitals at a time when they need to retool for the future or tinkering with the system in a cost-based way could undermine the future of patient care.

Investing in health care is investing in our future, our quality of life and jobs and economic growth. I should stress that the health care system in Ontario is one of the two or three principal sources of the province's competitive advantage in terms of industrial location relative to the United States and around the world, and it is inextricably linked with our economic performance for that reason. If we had a serious deterioration in that system, then our economic performance sooner or later could also be seriously eroded.

Hospitals feel that we do need to find more cost-effective ways of delivering patient care services, and we are doing that. The paper-again, as Frank mentioned, we won't go into it in detail because it's here and it obviously demands close perusal, but I think you can see that we have many suggestions to make that will improve the system as we go forward. But I think most of us in the room, most people in society, regardless of our political leanings or personal values, would agree that notwithstanding all the things that we recommend we do that are underway, we still need to consider alternate paths to the future to put the system on to a more sustainable track.

What are those paths? The first path probably relates to the role of health care consumers. Everyone can play a role in solving health care problems. To be very frank-and I know that this comment is controversial to some extent-society cannot afford a health care system that protects people completely from negative lifestyle choices such as smoking, lack of exercise and poor nutrition. We cannot, to the regret of everyone here and to the regret of everyone in the system, protect everyone from the consequences of their choices made over decades. There are remarkable savings to be made if we recognize this and focus greater efforts on health promotion and illness prevention.

A second path is to empower and better equip front-line health care deliverers. We cannot expect them to continuously do more unless we upgrade their skills and invest in technology so that they feel better supported. As an industry, hospitals in Ontario for many years have been underinvesting in skills development and we believe, relative to other jurisdictions around the world, are falling behind in the use of medical equipment, information and communications technology.

There are many issues and steps that we could recommend to translate these broad themes into specific action. We think it is essential that we end the stop-and-go funding that is leading to uncertainty and disruption in patient care services. We are recommending that the province provide hospitals with adequate three-year funding commitments to enhance recruitment and retention of health care workers and to give better predictability to the system. I think if you cast your mind to what Sunnybrook or the Hamilton Health Sciences Corp or any of the very large community hospitals look like, you will readily understand the difficulty of managing them when sometimes the budget allocation is not known to them until they're well into the year for which that allocation applies. They can't turn on a dime; they are big. We simply cannot wisely live with that kind of unpredictability.

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We also recommend that hospitals must constantly upgrade medical equipment, information technology and our ability to generally keep pace with new clinical practices. We really do need to stress how important modernizing capital funding for hospitals is. It is there not only to serve the consumer better, but to contain costs in the future.

We need, as you'll see from my earlier remarks, to play a much broader role in improving health human resource planning.

We need to make sure that we do something, including possibly the establishment of a health knowledge fund, that will foster training and education, including e-learning. The Internet is changing the world of health care in hospitals just as much as it is changing the world of banks and consumers. It's important to recognize that, because in there lie possibilities for the future that can help us make the system more sustainable.

We also think that public accountability for the health care system is important. We believe that all health care organizations and professions who receive public funds should produce annual report cards, similar to the hospital report cards we now produce, as a condition of receiving these public funds. We think full transparency to the taxpayer is one of the most important elements in restoring and improving public confidence in the system.

We also need to accelerate the integration of health care services, not by great new grand designs or corporate organizations, but by simply enabling hospital boards and the governance structures of other providers to enter into local partnerships for the provision of patient care.

I'd like to stress, however-you may see it from my previous comments-that we must make a major effort to encourage the public to do as much as possible for themselves. We favour continued expansion of new health care delivery services, such as the telecare service recently introduced in Toronto and in North Bay, and the development of e-health patterns of delivery. These will open up new ways to deliver hospital services to people. Imagine, the hospital of the future will deliver services to people in their home, at work or wherever they happen to be, and probably will not be defined as a piece of geography but rather more as a bundle of services to be delivered to people wherever they are and at whatever time they really need them.

We think health care providers, together with the government, should implement an all-out health promotion and illness prevention program to improve health outcomes and reduce costs to the taxpayers. We have made major progress as a society in the campaign against drunk driving. We have made major progress as a society in smoking cessation-probably not enough, but viewed over the last 20 years, amazing progress. We could probably do some of the same for lifestyle-related illnesses. If we all took a greater sense of recognition of the need to do that and acted accordingly, ultimately the costs attached to the system could come under much closer control.

Finally, we believe we need to enter into new and innovative public-private sector partnerships for the capitalization of the system, provided they are consistent with the Canada Health Act. Our submission recommends removing barriers and introducing incentives to foster public-private sector partnerships in the areas of capital development and new technology. If we can find ways of mobilizing the skills and the finances of the private sector to better support our system, in line with the fundamental philosophy governing that system, we think there are major possibilities for reducing the problems that are readily apparent today.

I would like to close there so that there's ample time for questioning. We very much appreciate your attention today. Mr Norman, Ms Lapaine and I would be happy to answer any questions.

The Chair: Thank you very much. We have approximately three minutes per caucus. I'll start with the official opposition.

Mrs Lyn McLeod (Thunder Bay-Atikokan): In three minutes there are a lot of questions I would love to have the opportunity to place to you around both the stop-and-go funding that you've mentioned and the inadequacy of hospital funding. Perhaps the first area I'd like to focus on ties into the public-private sector partnerships, which was your last point, in one specific aspect. I may not get time to get to another key area that I would have liked to ask you about, and one is the difficulty in hiring full-time nurses on contract, or even part-time nurses on contract, if you don't get your funding until the end of October. So let me put on record that I think that's been a real limitation for hospitals in dealing with nursing shortages. I'd like to ask you about the increasing strain on hospital budgets of having to provide incentives for physicians, and I'd like to ask you about the new funding formula and why we haven't seen the new funding formula for hospitals.

But since I only have three minutes, I want to ask you about something that may be seen as a bit controversial too, and it does tie into this whole aspect of public-private partnerships but in a different way than I think you are suggesting in your bullet point. I want to specifically use the MRI situation as an area for questioning. As we know, there have been some stories about the private sector use of MRIs in hospitals. I do not believe from anything I know of that the hospitals have been utilizing those MRIs in any way which is inappropriate under government regulations. They've been using them, as I understand it, for third-party purposes, which is essentially private-pay use but for unlisted services under OHIP, so it's services that are not covered by the Canada Health Act. So if there's any question of listed services, medically essential services being paid for, it's not as a result of what the hospital has done, as far as I know.

My concern, though, is that hospitals have long waiting lists for MRIs. In Ottawa it's as long as seven months waiting for an MRI. If there are the personnel to use those machines that the hospitals have now, if they're available to do after-hours work, and if those machines are not being used for publicly paid-for purposes, if they're free to be used for third-party use, would it not be possible, given adequate resources in the hospitals' global budgets, to use those MRIs for publicly paid-for services and reduce the wait for those publicly paid-for services?

The other part of the question is, is it the inadequacy of budgets to be able to hire the staff to run them for publicly paid-for purposes after hours? Is it also the fact that hospitals are feeling a desperate need to bring in some revenue because of the inadequacy of their budgets?

Mr MacKinnon: I'd like to make one comment first before turning it over to Mr Norman, who has been associated with some of these issues for a very long period of time. What we need to do in health care in Ontario is make benchmarks. For example, the number of images per 100,000 of the population for MRIs is a reasonably common benchmark. What we need to do in Ontario health care is focus on our ability to achieve generally recognized international standards in that kind of area. If we do that, the capacity can then be identified and built in. What we can't do is keep on making those kinds of decisions incrementally in accordance with very short-term pressures or demands. I know that may appear to be a little confusing, but it is fundamental that we-

Mrs McLeod: It's not confusing at all, but it raises a second fundamental question: are we meeting that kind of a benchmark now, and do we have any data?

The Chair: Ms McLeod, you're going to have to let Mr MacKinnon answer because we're running out of time.

Mrs McLeod: I think he raises another question of whether we are meeting the benchmark and whether we have data to know whether we're meeting the benchmark.

Mr MacKinnon: The fundamental need is to achieve the standards worldwide and I think we have some way to go to do that. But the fundamental thing we need to keep track of as a society is, what are those benchmarks? We can't simply make decisions incrementally, because sooner or later we will run into trouble with MRIs or with other types of equipment or with the physical facilities themselves.

Mrs McLeod: But if we're not meeting the benchmark, we've got a way to go.

Mr Norman: I'm not sure that's absolutely where I would come from on that one. My background is that of Kingston, the world of an academic health science centre, which does have an MRI, and where the waiting lists are of a quantity whereby people come from Ottawa to have work done there because it can be done.

The limitation is not the public-private limitation. It isn't that at all. The limitation is driven by two things; first of all, the cost of the staff to run them, which you really can't solve by saying, "We'll take the third party and make that happen." There's not enough in that to do that, quite frankly.

The other aspect of it is the technical support which is needed in order to be able to read the bits and pieces. I'd like, if I may, to take you into a slightly different area. I think that as we look at the developments for technology which are in existence at the moment, we have the technology to be able to do an MRI scan in one location and have it read hundreds of miles away. That's the technology we need to be able to promote at this moment in time, because it has a distinct human resource element to it. We no longer have to have the radiological technicians sitting at the place where the viewing is being done. We can read those things at 30 frames a second hundreds of miles away today.

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The Chair: Ms Molinari first, and I'll go back to Mr Christopherson after.

Mrs Tina R. Molinari (Thornhill): Thank you very much for your presentation. You've raised some very key issues in your presentation. I have a couple of questions and first some comments.

You talked about finding more cost-effective ways, because in the system that we presently have, in order to sustain it over the long term, of course we have to continue finding efficiencies and ways of offering the service. I appreciate in your presentation your recognition of that.

You've also made comments with respect to the fact that we can't completely protect people from negative lifestyles, which is true, but certainly also the greater efforts on health promotion to prevent illness. I'd like to hear some ideas and some comments on that.

Your point about the multi-funding commitment I think is key, and I understand your points and where that's coming from. When you're budgeting, if you've got multi-year budgeting it assists you in being able to plan for the future, and certainly I recognize that.

You also mentioned the annual report cards being something that should be supported. Let me ask you your thoughts on giving patients an account of what the services cost when they go into a doctor's office. That's something that's been discussed and debated numerous times: if the patient actually knew what the cost of that visit was, might that affect the way they're using or sometimes abusing the system that is presently in place? What are your thoughts on that?

I'm particularly interested in your comments on partnerships and developing more partnerships, because I think in the future we need to look at more efficient, innovative ways of providing the service that is absolutely essential and something that's sustainable. We all need to take part in the delivery of that and the success of that. If you could comment on some of those things, I would appreciate it; it would be helpful.

Mr MacKinnon: I will ask Mary, perhaps, to take the very first part of the question, dealing with health promotion and wellness which you mentioned. But on the last issue of the accounting of services, hospitals over time have done some of that in relation to hospital visits and what it costs individual consumers. The problem with it is that (a) it didn't seem to have a huge impact, and (b) the costs of the system were considerable, relative to any benefit that we could see deriving from them-and they always, of course, had to be assessed in relation to the costs of putting the same amount of money into an MRI machine or something else.

In talking to the Ministry of Health, our general sense is that we would like to experiment a little bit with that and we would like to see whether new changes in computer technology and so on make it more feasible than it was perhaps 15 or 20 years ago. It's very attractive on the surface, but for the reasons I mentioned, it hasn't always been possible to do it in a way that has some real impact. Of course, the pressure of putting the money, then, into something that does have a real impact is absolutely implacable. But we're willing to experiment, I think, is what the current play is. We'd like to do a little bit of experimentation.

On the issue of public sector-private sector partnerships, again, I think if we can take a step back and say, "How do we mobilize the talents of society to solve our problems?" that's kind of the right question to ask. That involves not just the private sector always but it involves those who represent the people who work in hospitals, unions, the whole thing. This is a broader problem than anything that the traditional medical professions can handle.

Mary, would you like to comment on the lifestyle issue?

Mrs Mary Lapaine: Yes. It's very interesting, particularly your comment-I'll get to the lifestyle-on the billing. I think if there's something as a volunteer that I get asked about the most, it's billings, not only in hospitals but in doctors' offices. I think you're very right in saying that a lot of people just don't realize what those visits cost. There is an abuse of the system, I don't think necessarily intentionally, but it appears to be free, and anything that's free, why wouldn't we use it? So I think there is definitely a need for that. It certainly has to be a collaborative measure between us and the OMA, obviously, because it's going to impact doctors and their offices, although doctors working closer with hospitals are a thing of the future and it's definitely going to be happening in Ontario.

As for lifestyles, I think it is very interesting. We just had this conversation this morning, particularly about smoking and drunk driving. Your children and, in my case, grandchildren are a perfect example of coming home from school totally indoctrinated in the fact that no adult should smoke. It's just a way of life. I think we can do the same thing with diet, with exercise. We're moving toward it but I don't think it's a concentrated effort. Unfortunately health care institutions, with the budgets we have, are working so hard to get people well who are sick that we don't have the money to go out and spend it on the wellness issue, which we are all very aware of and would love to have the opportunity to do.

Mr David Christopherson (Hamilton West): My apologies for missing the first part of your presentation. I want to step back and ask about the whole system. We hear from the hospitals, as you mention, $400 million or $500 million just to keep up with population growth, aging and other pressures, and I'm sure that's not the end of the list. We heard yesterday from community health centres that showed a terrific track record of service to the community, and I used the example in Hamilton to support that thought, but they are clearly underfunded too and they don't have the money they need. We talked to people in long-term care and, again, they think they can handle the issue if they get enough funding along the way to be ready.

I'm talking about the whole continuum. At the beginning of it is the community care, now done through CCACs. In Hamilton, because of underfunding, we went through lengthy, bitter strikes with the VON, who struck not against their management but against this government in terms of lack of funding, and the same with the CCAC case managers. So everywhere along the continuum there seems to be underfunding, at the same time that we're supposed to be changing the emphasis from the institutional side of things more into the community end.

I'm wondering, not just in nominal dollars, whether or not you think there is a shortfall, because obviously you do, but is there enough-I'd like your sense of the percentage of funding that's going into each stage of the health care continuum as it exists and also as it evolves.

Mr MacKinnon: Perhaps I can just make one comment. As you can see from our comments, the most important stage of all, working on lifestyle-related illnesses which cause so many of the problems and issues we deal with, is something we really need to do much more of as a society.

On the second issue, perhaps one comment I'd make-and I'm sure Frank and Mary may want to comment as well-is that the problem we're facing is not fundamentally an organizational problem, and there is no organizational solution to it. What we're facing is relatively fixed capacity in terms of money, health professionals and so on, and infinitely elastic demand, and those don't meet. There have been all kinds of efforts; I can count 20 years of books and visions about how to organize the health care system so that it deals better with the problems and I don't think any of them have really amounted to very much. What we have to do is deal fundamentally with the problems of why we have these issues in the first place and deal with the technology and all the other issues mentioned in our submission.

The one thought I would like to leave very strongly is that there is no way we can deal with this by simple organizational change. All the other providers play a very important role. Hospitals in most parts of Ontario work very well with them, and closely. You can't run a hospital without a good nursing home industry nearby. All those issues are there. But it's not going to be an organizational solution that gets us out of the problems we've got. It's an all-out effort in every direction.

The Chair: It's a very impressive discussion, but I must maintain-on behalf of the committee, thank you very much for your presentation this morning.

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ONTARIO ROAD BUILDERS' ASSOCIATION

The Chair: Our next presentation is from the Ontario builders' association. I would ask the presenter or presenters to come forward and state your name for the record. On behalf of the committee, welcome.

Mr Rob Bradford: I'm Rob Bradford. I'm the executive director of the Ontario Road Builders' Association, Mr Chairman, not to get us mixed up with those fellows who put up the big buildings.

Our organization appreciates the opportunity to meet with you again this year and the chance to speak with you about the importance of a strong public commitment to Ontario's roads infrastructure.

I would like to spend a few minutes this morning to speak to three general subject areas: the government's commitment to capital investment in the provincial highway system, concerns about our municipal roads and bridges, and the benefits taxpayers could expect from a longer-term approach to capital planning in Ontario.

In the past several years we have seen an increasing commitment to investment in our provincial highway system. This welcome growing commitment is highlighted by a record $1-billion highways program in the current fiscal year. The provincial government is to be congratulated for this renewed commitment to provincial highways.

That said with all sincerity, it is our responsibility to point out that significant investment in our highways is needed today to answer for almost three decades of neglect and underfunding that left a system once envied by the world in a sorely deteriorated condition. You will recall that in 1995 the Provincial Auditor said 60% of Ontario's highways were in unacceptable condition. Six years later that statistic has improved dramatically, but the message today is that the job is not nearly completed and the province must maintain a strong and growing commitment to ensure that Ontario's highways will be able to adequately serve our growing, export-based economy.

We pointed out last year, and it is worth repeating, that Ontario exports account for over 50% of our GDP now. Over three quarters of those exports go south to the United States and 95% of them depend on road transportation for at least part of the trip.

I believe, or at least I hope, we're past the point where it is necessary to repeat for this committee all of the statistics and studies that show the importance of our highway system to our economic growth, to public safety and to quality of life. We have talked to this committee about the $3.5 billion per year spent in Ontario by American tourists arriving here by car, we have spoken to you about the implications for public safety and quality of life and we have quantified the effects of congestion on productivity. I could use my full 30 minutes today rhyming off those statistics for you, but we believe that those connections are now well made and understood by governments today. So the objective now must be to respond to those facts and figures with the appropriate public commitment to provincial highways.

While Ontario has taken some very positive steps toward bringing our current highway system up to acceptable standards and maintaining them that way, the other half of the equation-system expansion-is still not being addressed in a significant way. Keeping the 401 and 417 and Highway 69 to the north in decent shape is one thing, but addressing the needs of the future is another. There must be a renewed investment in new highways very soon or the congestion and gridlock nightmares we are experiencing today in major urban centres will soon seem like the good old days. Recent attention in the media and statements by members of the government have underscored the fact that congestion has reached crisis proportions in the GTA.

Growth projections to the east, west and north of the GTA will bring the movement of goods and people to a halt if we do not begin to address system capacity. In the Golden Horseshoe area over the next 20 years, there will be a million more vehicles on local roads. Rush hour trips in the GTA will increase 50%, to 3.6 million per day, by 2021.

Our industry has been encouraged by the apparent changes in public opinion that have brought a recent renewed focus to highway congestion as a priority issue. But we are concerned that in those same news articles and features there is a growing misconception that the GTA's congestion problems can be solved simply by expanding subway systems or bringing a few more GO trains into Union Station every day. This ignores the role which expanded road capacity must play in the solutions.

We support the government's recently announced emphasis on a smart-growth approach to planning our urban centres and transportation systems of the future. It's a strategy that is long past due, and if it's handled well it will provide solutions for the future in transportation. But in developing our strategies for the fixture, again, we must avoid the misconception that Ontario's transportation problems can be solved by ignoring roads and focusing completely on public transit. It is a naive and dangerous misconception because that type of tunnel vision ignores the reality that people aren't about to give up their cars tomorrow, nor does it speak to questions about how we get our products and manufactured goods to market and to the border or how we get our raw materials to our factories.

We tend to talk these days about roads and public transit as if somehow they are mutually exclusive, as if the answers lie with either one or the over. It might be enlightening to consider that outside of the GTA public transit means buses almost exclusively, and buses need good roads. Sixty Ontario municipalities have public bus systems and 1,100 communities are served by inter-city buses. There are 40 million passenger trips on 4,100 transit buses and 1,500 highway coaches every year. Without good, safe roads, public transit doesn't work.

SuperBuild was established to manage Ontario's infrastructure planning and investments. A large part of SuperBuild's mandate is to leverage private sector money to provide that infrastructure. We believe the private sector is ready for that challenge in providing some of the new highways Ontario needs, but there is some fundamental direction required from the government, and we must get on with the job.

The mid-peninsula highway, for example, was needed yesterday, and if we decided to build it right this minute, there still wouldn't be shovels in the ground for several years yet. There are needs assessments, environmental assessments and land acquisitions to be undertaken, and I think some discussions that our organization had with SuperBuild over the past year have established that these are functions for which the government must retain responsibility.

The private sector will build the highways of the future where a reasonable return can be projected, but the government must initiate it. We are already far behind in the task of providing adequate highway capacity and it's imperative that we move now with the decisions necessary to ensure that no more time is wasted. I would caution that not all highways of the future will be appropriate for public-private partnerships, and governments cannot expect that this solution will address all of Ontario's requirements for new roads.

The second subject I would like to touch on today is Ontario's municipal roads, which account for a full 90% of the province's roads inventory. There is, or should be, a growing concern about the lack of investment by some municipalities and the implications that has for economic growth and public safety in the province.

Municipalities are now completely responsible for funding of the local roads from their property tax base. Some of them believe the province has left them holding the bag and have not accepted this responsibility, and others simply put roads investment at the bottom of their priority list at budget time because it's easier to do than raising taxes. There are some municipalities, especially in northern Ontario, that legitimately cannot bear the full responsibility because geography and development patterns have left them with a greater need for more roads and too thin a tax base to support them.

Notwithstanding that municipalities now have the responsibility for funding their local roads, we believe that the provincial government also has a responsibility to ensure that our municipal roads systems adequately serve the collective interest. This interest is economic because our roads are all part of a network, and if one part is broken, the system cannot work properly. It is also a matter of public safety, and that is a provincial responsibility. Our municipal bridges are a good example. They are supposed to be inspected every year but in many, and I'd say most, cases this is not happening. We know that some, maybe many, are inadequate and well beyond the stage in their lifetimes that repair is necessary. Are we going to wait until one collapses during a rush hour before we move to ensure that our municipal bridges are safe?

A couple of years ago we suggested to this committee a dual-purpose strategy that we still think is a good idea. We suggested that a level of funding be established as something of an infrastructure emergency fund, which would be available to municipalities that could demonstrate hardship and a real problem with maintaining their local roads. This would require some level of financial commitment from the provincial government, but it would solve two problems at the same time. In order to be eligible for funds from the program, a municipality would have to demonstrate need, and to do that they would have to undertake a program of monitoring the condition of their roads and bridges.

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I don't think too many people realize that, in many cases, this isn't happening any more. We have no way of even knowing the condition of roads and bridges in municipalities that are no longer making those types of assessments. This is convenient in that if you don't know there is a problem, you don't have to fix it, but it should be seen as unacceptable in a sophisticated province like Ontario to bury our heads in the sand when it comes to 90% of our road system.

Whether the province looks at our idea for a special fund triggered by demonstrated need or some other initiative to address this situation, we believe that this government must show leadership in ensuring that our municipal roads and bridges are not allowed to crumble due to neglect.

We also think the public-private partnership model has tremendous potential for generating new funding for municipal roads and bridges, and we urge the government, through SuperBuild, to initiate the dialogue that will produce the innovative approaches and new ideas that will make this happen.

The final subject I would like to touch on with you today is that of the need for a longer-term approach to capital planning for provincial highways. Late in 1999 our association delivered to the government a report that indicated the potential for some $65 million in increased efficiencies through a multi-year capital planning process and by calling road work earlier in the year.

Currently, capital budgets for provincial highways are established annually. Until the budget comes down in April or May, there is little indication of that year's funding commitments. The road-building industry cannot apply proper business planning tools, and this extracts a huge price in terms of productivity and efficiency, a price that is invariably passed on to the government owner and eventually the taxpayer. It is one of the few industries I can think of that has to re-create itself every year, not able to properly plan investment in plant, equipment and human resources.

We are not looking for more money here, just some upfront planning that would benefit Ontario taxpayers and our industry. We recognize that the provincial budget is the main tool for setting fiscal policy, but we have also suggested that there will always be a baseline portion of the annual program that can be established upfront, so why aren't we doing it? Given an annual baseline funding level projected out over several years, the Ministry of Transportation would be in a position to better plan its flow of work. The ministry could start tendering work in January and February of the year instead of June and July, and an industry that now does most of its work in about a six-month construction season could be working nine months of the year.

This makes so much business sense to us that, quite frankly, we can't understand why it is not happening. Everyone we have spoken to at all levels of government acknowledges the common sense of what we're saying. Everyone we talk to in government agrees that it makes good business sense, that it saves the taxpayer money and that it builds a stronger road-building industry. But it isn't happening and nobody can tell us why. Year after year we're told, "Yes, we're going to move in that direction," and year after year it doesn't happen.

This is not rocket science or some revolutionary way of handling the government's finances. Pick a number: $500 million, $400 million or whatever a comfortable number is for the government to work with, and then get that amount of work out earlier in the year and our industry will deliver the benefits in terms of cost savings and quality of work.

Admittedly, last year the government did, for the first time, make some progress in this area. We got more work out between January and April 2000 than was tendered in that period for many years previously. The industry was encouraged and was able to squeeze more out of an already short construction season. If this were to continue year over year, the province would begin to see the types of cost efficiencies and productivity that our report indicated. But this year we have gone back to our old ways again, and our industry is waiting until April or May, or whenever the budget comes down, before it knows how many people to hire, how many trucks to line up, how much stone to stockpile etc. By addressing this issue, the government can realize better utilization of tax dollars.

Thank you, ladies and gentlemen of the committee, for your time and your attention. Our association, as always, looks forward to continuing to work with your government to ensure that Ontario's road system delivers economic benefits, optimizes public safety and contributes to the quality of life for Ontario citizens. I'd be pleased to answer any questions you might have.

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

Mr Christopherson: Thank you for an excellent presentation; it was very concise. You hit on three very important areas and made a good, concrete recommendation. So all in all, it was a very good presentation; thank you. I'll try to make comments and ask a question on each of the three areas and leave it to you to respond to whichever part you'd like.

I'm from Hamilton, the heart of the Golden Horseshoe. If anybody knows about what it's like on the QEW between Toronto and Hamilton, it's me and any of the other members who are in the Hamilton area. The difference between now and when I was first elected in 1990 is so stark you'd think you were in a different province; it's that dramatic.

What I wanted to ask is, when most of us think about major urban centres around the world, congestion sort of goes with it. A number of thoughts come to mind, and that's one of them. I wondered if you could give us an example of a world-class, world-level city comparable to Toronto that has come up with either an innovative way or a clearly different approach that, in your opinion, has worked.

Secondly, on the municipal road structure, I'm glad you're raising this early. It's not the first time. There are a number of other areas that municipalities have been given responsibility for, social housing being another prime example, where, because of the fiscal pressures on municipalities, some-let's be fair-are either not going to make the right choices for the long term or, because of fiscal pressures, will have no other choice but to make decisions that are only in the short-term, maybe medium-term interest of their community, but not the longer-term.

But when you talk about things like roads-and I'm glad you raised the point-you can't just say it's a municipal problem confined to that municipality. Everything is interconnected. Already, because of that differential, because different municipalities are going to see and have the fiscal ability to deal with their road infrastructure problems differently, we could have problems in terms of the overall Ontario transportation network. Right away, we're seeing you recommend that there be some kind of fund that's triggered after certain thresholds are crossed. But at the end of the day, it brings the province right back into an area that they were trying to get out of. Do you know what? At the end of the day, I don't think they'll ever be able to completely separate them without running the risk that various points in the transportation network are going to be problematic, affect other financial centres and quality-of-life centres, and no one will have anything to say about it because it's strictly a municipal jurisdiction.

On the last item you raised, our government's probably just as guilty as this one. I didn't hear you point to any of us in the past who did a magnificent job of getting those numbers signalled to you early. So I'm wondering-I'm assuming it's not a political thing but it's a structural thing-what kind of answers do you get from the Ministry of Transportation, other than the obvious, "We have to coordinate the budget all at once," when you raise this issue about signalling ahead of time so that you can get your ducks in order?

Mr Bradford: You've touched on three areas there. I'm not going to be overly helpful today on the first area. I think you raise a good point. Our association should get busy and do some homework and deliver to you some research on other major urban centres that perhaps have found better solutions. Unfortunately, I'm not prepared to give you those answers today.

On the subject of municipal roads, this is obviously a very touchy political issue. The responsibility for municipal roads has been passed on to municipalities. That's what we're telling municipalities. We're telling them to take that responsibility to heart. But, as I pointed out in our presentation, I think the province has a responsibility to look down from the top of the thing and say, "Is this working overall? Is it serving our purposes?" That may in fact require some money to ensure that where it isn't happening properly and where legitimately a municipality cannot meet that responsibility, possibly the provincial government's got to intervene and provide some assistance.

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On your third question, I think the Ministry of Transportation is on our side on this one. We've got a new minister; I don't know how he feels about it. But right up to the ministerial level, this stuff about getting work out early makes sense. What are we being told? We're being told that it's all housed within the office of the finance minister. As I pointed out, nobody's giving us any answers about why this can't happen. Everybody says, "Yes, we're going to do that." It makes a lot of sense, but it just doesn't happen. I don't know why, and nobody's given us good answers to that.

Mr Christopherson: Thank you for your presentation.

Mr John O'Toole (Durham): I'd like to share a little bit of time with Mr Arnott, but I just want to start by saying thank you for your information. I appreciate that and the acknowledgement. I think you've stated quite fairly that the government is trying to look at the infrastructure, specifically, in your case, the roads. Clearly, it is an issue, as you described, of safety and economy. I drive the roads every day from Durham.

Just on the municipal part, having served there for a couple of terms, I'm quite familiar with the whole look at, through the Fair Tax Commission and other ways, who funds what. There were always conditional and unconditional grants. Roads have a lifetime, and there should be an easy planning tool there for municipalities. I'm sure you could give them-and the Premier is speaking currently about the whole issue of smart growth: the use of public transit. We're also hearing the position of the chamber on a transportation authority of some sort. I think there's a lot of attention being paid to the impact generally on the economy, but making the right choices and long-term planning.

I have one specific question, though. I look at the 401 as sort of the artery of our economy, to a large extent, and there's not one nickel of federal money involved. There's $2 billion or more in revenue that comes from them. They need to be part of that solution, both in the public transit equation as well as the equation for our highways. You can comment on that, if you wish. If you think not, I want to hear your views, not mine.

The other part of the question is, looking at the longer term-longer-term capital planning is right on our government's agenda. That's what we do best, in my view, and clearly, from your opening statement, we're moving in that direction; SuperBuild is supposed to be doing that. What about the whole use of the current technology: the asphalt-versus-concrete equation? That's an important issue of investment. Do you believe that the current technologies for building highways are the right investments, or should we be looking at concrete as low-maintenance, if you take a 10- or 15-year window on maintenance, plus initial capital? Should we be giving that serious consideration: concrete on our highways?

Mr Bradford: I'll respond to both of the points you made. Yes, certainly, if I weren't here today, I'd be in Ottawa making the same points. It's an absolute travesty how the federal government refuses to take any responsibility. Yes, they have a huge responsibility to our national highway system. They are not living up to it and we're telling them that regularly. But please don't take that as a reason for the province to say, "The feds aren't giving us any money. They should be," so nothing's happening. We do have a responsibility, but you're quite right: the federal government has a responsibility.

On this whole thing about asphalt and concrete, it's the kiss of death for me to start talking about which is better. We are calling some trial projects this year where some life cycle costing considerations have been taken into account. All I can say is I guess we're going to see, in a very short period of time, which delivers the best benefits to the taxpayer.

Mr O'Toole: I think Mr Arnott has a question.

The Chair: In view of the time, I have to go to the official opposition.

Mr Monte Kwinter (York Centre): Thank you very much for your presentation. I don't think anybody in this province denies the benefits of having a good road system. It's a given. I don't think you'll find anybody who will have a different opinion. The big problem is, how do you finance it? That's why we see Highway 407. I noticed there was a report today that the use of that highway has exceeded their expectations. They're making money and they're going to expand it.

The problem we have-and I think it answers your question why there isn't an earlier indication of what the budget is going to be. All you had to do was see the reports of the cabinet meeting yesterday. We are going into a downturn. How serious that is depends on where you come from, but certainly it's relatively pessimistic. The Premier has gone on record as saying the only areas that are going to get any increased funding, as far as he can see, are health care and education. He's going to be calling on every other ministry to hold the line or cut, otherwise there's no way they can keep to their fiscal plan. He said that very emphatically. If you talk to the people at the Ministry of Transportation, they'll say, "We can't give you a figure because we don't know the figure. We don't know what envelope we're going to have to spend." That's unfortunate, from your point of view. I understand that.

I'd like to ask you about the issue you raise, and I think it's a valid one, that these private-public partnerships can't work everywhere. You get an area like the GTA, where there's lots of traffic, and you can make a business plan: if I build a highway and I get so much traffic and I charge so much on a toll basis, we can make money. I can get investment to build it, and that's what happens. With some of these other projects, particularly in the north in sparsely populated areas, you can't make that business plan. As a result, there's no one who will build them because they may never recoup their costs. So there is a role to play. Do you have a comment on that?

Mr Bradford: I don't know that you've asked me a question, Mr Kwinter.

Mr Kwinter: The question I'm asking is, how do you finance those highways-

Mr Bradford: Where there is no rationale for the private sector or where there's no reasonable return on investment, I think we've indicated it is a government responsibility. If we need a new highway up north, you're quite right: the toll revenues or whatever are not going to justify it. That's where we see the provincial government having the responsibility to ensure that the capacity is adequate.

The Chair: With that, Mr Kwinter, we've used all our time. On behalf of the committee, thank you very much for your presentation this morning.

ONTARIO FEDERATION OF LABOUR

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

Mr Wayne Samuelson: Wayne Samuelson. I'm president of the Ontario Federation of Labour. With me is Ross McClellan from federation staff.

Let me begin by saying it's always a pleasure to come to this committee. It's one of the few committees we actually get to go and say something to with this government. While the Premier certainly doesn't seem to elevate any of you people to cabinet, it's always a pleasure to see you here and talk with you, although I'm surprised by it, and I'm sure at least one of you will be gone next year.

I am pleased once again to present a pre-budget submission to the standing committee on finance on behalf of the 600,000 members of the Ontario Federation of Labour. Once again we feel it is necessary to inject a note of caution and concern into these proceedings, marked as they are by the vigorous, self-congratulatory back-patting of the Treasurer and his government supporters. Our concern is caused by the threat made by the Premier, and repeated by the new Minister of Finance, to engage in yet another round of tax cuts.

I want to focus on the issue of tax cuts. We've provided some up-to-date material for the committee on recent labour market trends in wage settlements from collective bargaining and job creation, which I'm sure you'll find helpful, but I want to focus on tax cuts in the context of the economic slowdown, which has already arrived.

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The American economy is finally emerging from one of the most remarkable periods of sustained growth in its entire history. After going into a sharp recession in 1989, the US economy recovered rapidly and produced more than a decade of spectacular economic growth with virtually full employment. Not only that, the Americans managed to wipe out their deficit. They also generated a fiscal dividend in the form of budgetary surpluses that now exceed $1 trillion. Canadians could only watch in amazement while the two candidates for the US presidency debated one single issue during last fall's US election: how best to spend that fiscal dividend, the tangible legacy of one of the strongest periods of economic growth at any time in our history.

It's worth pointing out that the superboom in the US economy had nothing at all to do with the Harris Common Sense Revolution mantra of "Tax cuts, tax cuts, tax cuts." It's a very inconvenient fact that President Clinton actually increased taxes in order to pay down that huge US deficit.

The second fact that lies at the centre of the American economic miracle is that American monetary policy has been based firmly and fundamentally on keeping interest rates low. It is this low interest rate policy, adjusted regularly by the US Federal Reserve, that created the rapid recovery in the early 1990s and sustained US growth through the rest of the decade. This growth, we repeat, took place during a time when taxes were actually raised.

When we compare the American experience with our own, the result is not only sad, it's also depressing. We really do not have much reason to sing along with the government's Hallelujah Chorus. The Bank of Canada pursued a high interest rate policy from 1989 until 1996, exactly opposite to the US. The result was a made-in-Canada recession that lasted eight miserable years. Now we have every reason to fear that both Canada and the US are heading into yet another recession. Despite the economic growth that Ontario has enjoyed since 1997, we need to remember that the Canadian economic recovery had less than half the lifespan of the American economic boom. Unlike the Americans, who have enjoyed 10 years of vigorous economic growth, Ontario has had only four consecutive years of real economic growth, from 1997 to 2000.

The truth is, the first two years of the Common Sense Revolution were so bad in economic terms that they totally wiped out the recovery that had started in 1994, when real growth was 5.9%. The 1994 recovery was followed by the plunge in 1995 down to 3.7%, and the GDP growth collapsed in 1996 to a miserable 1.1%. Not until 1999 did Ontario return to and surpass the level of growth achieved in 1994. Now, after just two years of very high growth, the forecasts for 2001 are dropping like a stone from week to week. So the orgy of self-congratulation and back-slapping is hardly justified; neither is the mindless optimism.

We listened carefully to the optimistic predictions from officials of the Ministry of Finance the other day. We would remind the committee this is the same ministry which predicted that the 1989 budget of the province was in balance with a $3-million surplus, until it disappeared on election day in 1990. It's the same ministry that predicted in 1989 that the recession would be short-term and of insignificant duration. A little bit of humility might seem to be warranted here.

I want to stress again the fact that the restructuring of the Ontario economy which followed the free trade deal and NAFTA has turned the Ontario economy into one that has a fundamental dependency on export trade. Ontario's prosperity is tied directly to our ability to export, and 93.5% of Ontario's exports go to the US. Despite the head-in-the-sand denial of the Treasurer, who comes from the Oshawa area, of all places, Ontario's export trade is fundamentally based on the auto sector. To deny this is utter folly.

One Ontario job in six depends on the auto sector and its myriad suppliers in steel, plastics, glass and all the processing and manufacturing concerns that funnel their products into Ontario's auto industry stream. Motor vehicles, parts and accessories accounted for over $80 billion in export trade in 1999 and were fully 41% of all Ontario's exports. Anything-and I repeat-anything that threatens the auto sector in this province is a huge threat to our standard of living. As everyone in Ontario knows, with the seeming exception of the Minster of Finance and his ministry, the auto sector in Ontario has been hit with the worst blows in over 25 years, with a real likelihood of more bad news to come. The US market for our auto exports has collapsed. Combine this with the end of the auto pact, and the discombobulation that has hit Chrysler Canada with the failure of the merger with Daimler, and it adds up to real trouble for the cornerstone of the Ontario economy.

The auto sector is not the only trouble spot. We are monitoring significant layoffs in steel, communications-Nortel's bad news coming just last week-and we're also starting to see some stall in the construction sector. The signs are all there for a significant downturn and it's already starting. There is every reason to assume we are once again entering a period of recession and therefore we should be planning for that contingency. We're all wondering is, how bad will it be?

The very last thing Ontario needs is more tax cuts. Let us remember the 1994 promise before the first round of Common Sense Revolution tax cuts. Let's remember those promises: no cuts to education and health care. We all know what those promises are worth. We fully realize that behind every tax cut lie spending cuts and that every spending cut translates into layoffs of public sector workers. It's absolute folly to compound private sector layoffs that are now taking place with another round of pink slips for public employees. That is a sure way to compound the recession and increase the amount of misery.

There is of course a real alternative to tax cuts. That alternative actually has worked to get both Canada and the US out of recession, and that's a low interest rate policy. Not only that, but low interest rates are worth more real money to working people than the across-the-board tax cuts we've been getting. Income tax cuts put most of the money into the hands of the wealthiest people who pay the most taxes. Every point off the interest rate generates huge cash savings for working people, and that helps to pull us out of recessions. Instead of lecturing and hectoring the federal Minister of Finance about more tax cuts, as he's been doing, Ontario's Treasurer should be speaking out in support of a low interest rate policy, and he should be praying that the US federal reserve is once again able to set an interest rate policy that will sustain the US economic miracle into the future. Another round of tax cuts in the context of economic slowdown or recession will simply finish off the first job of wrecking what is left of our public health and education systems and do much more damage besides that.

Health care: Further cuts to Ontario's health care system cannot be sustained after the craziness of the last five years. The massive reinvestment of the past two years has been completely unable to repair the damage of the first three years of the Common Sense Revolution and its assault on our hospitals. Further cuts will simply provide the final excuse to introduce a two-tier medical system. If that happens, it is inevitable that the new costs of pay-as-you-go medicine and health care will be placed on bargaining tables across this province, and you can kiss goodbye the competitive edge that our medicare system gives to Ontario industry. The auto sector alone enjoys a $6-per-hour cost saving over our American competition.

A second round of tax-cut-driven spending cuts will push post-secondary education over the cliff. Somebody will have to explain to me and the people we represent how cuts to education help prepare our young men and women for what everybody calls the knowledge economy. We do not need tax cuts. We need more tax-financed investment in post-secondary learning as a matter of simple economic survival. We urgently need public investment in learning for the early years to ensure that no child in Ontario is left behind in the knowledge economy. What we do not need is more tax cuts.

It's interesting that the person before me spoke about capital investment, because I also want to highlight that: capital investment in roads and transit. Ontario's capital spending has been decimated to pay for the first round of tax cuts. As a result, our transportation infrastructure is falling further and further behind the pace of urban and interurban development, especially in the GTA. I've included some charts that talk about the capital deficit in roads and transit.

Ontario's GO Transit system, once at the forefront of commuter transit, has been allowed to decline and languish. Its park-and-ride facilities are now so inadequate that service expansion is impossible. Its user-hostile scheduling and crazy mix of bus and train service is a jumble that's impossible to understand. It is completely unintegrated with the TTC and other urban transit systems. What is urgently needed is a massive public investment to turn GO Transit into a modern, integrated, people-moving service right across the GTA and to do the same in other major economic centres of the province. This just will not happen if we continue to cut and cut taxes.

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In an era of just-in-time inventory, it's a recipe for economic disaster to continue to allow gridlock on Ontario roads and highways and to completely ignore the creation of an integrated public mass transit system across the GTA to ease the current massive congestion. You'll notice that in the US our American competitors have invested billions in highway modernization, while Canada continues to squander its resources on tax cuts. We may just wake up to find that those industries which need just-in-time delivery have gone to a jurisdiction where their deliveries are not stuck in perpetual traffic jams.

Housing: No other policy of the current government has been as much of a disaster as its housing policy. By relying exclusively on private market forces to supply affordable housing and by totally deregulating the private sector market, this government has created a housing disaster of world-class proportions. The eradication of rent control has led to a new wave of economic evictions across the province but nowhere as dramatic as here in Toronto. The fastest-growing group of homeless people now is children whose parents cannot find an affordable home. We have over 6,000 homeless children living in shelters. Homeless people are dying of exposure at the rate of one a week this winter in Toronto. Conditions that used to be confined to the Third World are now commonplace on many of our streets here in Ontario.

This is a good time to remember why it was that government got into the housing supply business in the first place; it is because the private market has been absolutely incapable of providing affordable housing since the late 1960s. It was the crisis of housing supply in the early 1970s that forced the Davis government to introduce rent controls in 1975. Every subsequent government recognized the need to protect low- and modest-income Canadians from the threat of economic eviction and homelessness, except this one.

After five years of decontrolled rental housing and the enactment of the entire wish list of the private development industry, the Minister of Municipal Affairs is reduced to ranting and raving at builders and developers for their failure to build affordable rental housing. We are now back at the beginning, where we were in the 1970s, except the situation is worse. Given the basic unchanging and unchangeable reality that the private sector cannot and will not build affordable rental housing, the only solution is to re-establish a provincial housing supply program. We believe the disgrace of homeless men, women and children will continue to bring shame on this province until once again we assume responsibility and get back into the housing business by supporting the construction of municipal non-profit and co-operative housing.

Before I go on, let me just take a second to point to this ad. I know the government members here aren't responsible for some of the silly things their government does, but placing this ad in the commuter newspaper-I don't know if you've seen this-so homeless people have a number to call in Toronto to find someplace to sleep is not an answer to dealing with homelessness. This is the most insulting example of a waste of government money I have ever seen. If you want to deal with the issue of homelessness and people dying on the streets, then you should deal with it and not try to cover it up with advertising campaigns like I've seen in the papers this week.

Finally, I want to make a plea to this committee to put a measure of compassion back on the province's fiscal agenda. The outgoing Treasurer spoke often about compassionate conservatism, but there's certainly little to show for it. One thing that needs to be done is to increase social assistance rates for the poorest of the poor, who have not had a raise in their income in 10 years and who have actually suffered a 30% reduction in their standard of living since 1995. Ontario's workfare program, which forces the poor to work for a welfare cheque instead of a paycheque, should be replaced with a fair work program that provides decent jobs with decent pay and the protection of Ontario's labour laws.

I'm going to ask Ross to give you a brief summary of the appendices which deal with wage settlements, jobs and the economy.

Mr Ross McClellan: Very quickly, as we always do, we've provided the most recent data on wage settlements from collective bargaining in Ontario. I apologize that some of the charts are illegible. I've included an insert. Our scanner was on the fritz yesterday and we weren't able to produce the quality we would have liked.

Collective bargaining wage settlements over the last three years have averaged 2.1% a year. That breaks down into 1.8% per year averaged over the last three years in the public sector and 2.6% in the private sector. During the same period of time, the consumer price index has averaged an annual increase of 2.5%. The most recent number from Stats Canada, which is a bit concerning, is that the year-over-year increase in the CPI in January was 3.6%. It's obviously being driven by increasing energy prices that are up, during that period, 10.6%.

My point is that wages have nothing to do with whatever is happening to the CPI. Wage settlements from collective bargaining are running below inflation, and that's important in terms of interest-rate policy, as you know. If you accept our president's recommendation that interest rates are the key factor, there's no justification for concern that wages are driving inflation. Wages are behind inflation, especially in the public sector. Any wealth that's being generated by the so-called economic boom is sure not being shared by working people, because their wages are falling behind and they're not catching up. They're falling further behind.

Just a quick note on job creation. It's useful for the committee to look at the graphs on the final page. There's a lot of hype about all the jobs that have been created since 1995 in this recovery. Most of them have been created since 1997. A third of them are part-time jobs. You need to keep this in mind. When we look at these job numbers and all the back-patting and self-congratulation, a third of the job growth is in part-time jobs. Then, when you get behind that even further, you discover that, even conceding that some of the self-employment jobs are part-time jobs-and I don't think they are-the most conservative estimate is that 28% of the new jobs that have been created in Ontario are self-employment. I think that's probably a higher number, because I assume most of the self-employment jobs are actually full-time jobs. If you calculate it on that basis, it would be closer to 40% of the new jobs created since 1995, but I'm being conservative, because it's a Conservative government, and 28% of the jobs are self-employment. Half of those are self-employed individuals with no employees, in other words, people who are trying to sell Amway and are sitting in their basements staring at their computers waiting for the phone to ring, people who have been displaced from good jobs and are struggling to survive. Those numbers tell us that we're still producing a lot of bad jobs along with the good jobs that are being produced in this province.

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

Mr O'Toole: It's good to see you again, Wayne. I'm confident the Minister of Finance, Mr Flaherty, whom you made reference to, will be quite concerned in representing the auto sector. Certainly I am. I hope there's a job for me there two elections from now.

Mr Joseph Cordiano (York South-Weston): You'll be in the cabinet, John.

Mr O'Toole: That's right. I'll certainly be upset if I'm not. I do appreciate your sense of humour, but I also want to make sure I note that I'm always available and I do meet-whether it's the construction side or whatever. To leave an impression that we're not listening is absolutely wrong, but there are always two sides to the equation.

I want to focus on the tax-cut issue a small bit, as it dominated a fair amount of your presentation. Before I get to that, though, I want to talk a little bit about the monetary issue. I don't disagree with you. I firmly believe that interest and interest manipulation is supposed to control demand. Obviously, increased interest reduces demand.

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I could make the same argument for tax policy too. There is a clear relationship, especially in the lower-income groups-those people under $40,000 or $30,000 spend a larger part of their disposable income-and if you increase that disposable income, either through interest, ie, lowering your mortgage and therefore you have more money to spend on heating the house or whatever, they're going to spend it. My argument is, like the interest argument-I believe we should have low interest, I really do. Clearly, Alan Greenspan has made that the monetary policy in the States, and I think the Bank of Canada will follow suit, probably in March, and lower it a point or a half point.

That being said, the analogy I'd like you to respond to is, if you lower taxes, it's the same thing. I have evidence here, Wayne, that would show you that our tax changes to a working family-that's two people working, each making $30,000 a year-amounts to something like $1,700 of increased disposable income. That increased disposable income, to some extent, was clawed back by the federal government. They increased the CPP, they increased the EI deductions and they increased and didn't change marginal tax rates.

The Chair: You've got one minute left, Mr O'Toole.

Mr O'Toole: Don't you support lower interest? Yes. Don't you support lower taxes? Your employees, that's their income you're talking about.

Mr Samuelson: You should make a similar pitch to the Minister of Finance, that stuff about low-income people spending their money, because maybe then he would quit giving huge tax breaks to people who already have a whole lot of money, which is exactly what your tax break regime does. You know that and everybody knows that. So you should make the pitch to your colleague in the Oshawa area, who, I should note, had the job for three hours and lowered the projections by about half a point.

Mr O'Toole: Very responsive.

Mr Samuelson: Very responsive. We've got a lot to worry about.

The issue of tax relief can't be dealt with without looking at what the impact is. I feel it with my kids, who are in the school system and, if you're being honest, you do too. We certainly know what it's doing to our health care system. You can't simply deal with these huge amounts of money you're giving to people who already have lots when what it means to most of us when we try to go into an emergency ward is that we're told, "Sorry, we're closed. You'll have to go down the street somewhere."

With all due respect, that's the context in which we try to approach the issue of tax cuts and tax policy.

The Chair: Mr Cordiano?

Mr Cordiano: Thanks for your presentation. I think it's very thorough and thoughtful. Given that we're seeing an impending slowdown in the economy, the Premier's response yesterday-my colleague Mr Kwinter pointed this out to me-coming out of a cabinet meeting, his immediate reaction was to suggest that there will be further cuts to the public sector and that every ministry is being told to hold the line. So there is going to be a freeze on any additional spending and further cuts, at best. That implies we're not going to see any of the types of investments that you're calling for in capital expenditures, housing, social assistance, health care or education.

Further to that, with the downloading of most of these responsibilities on to municipalities-for example, roads, public transit, housing, social assistance-and I suppose there will be additional pressures on municipalities to increase property taxes as a result of some of these additional burdens that have been placed on them, how are we going to respond in the midst of an economic slowdown to invest in some of these areas that you're calling upon the province to invest in? Where is this additional money going to come from? Is it going to come from what you've suggested should be a freeze in additional tax cuts?

The recovery isn't going to happen for some time, so the revenue base for the province is going to slow down. I'm just wondering how it is that the province would continue to fund particularly health care, which still remains a provincial responsibility, and education.

Mr Samuelson: Even without the context of an economic downturn-again, we all have different views on how serious it's going to be-clearly the government is positioning itself to get rid of a lot of these services. You read in the paper today that they want to privatize. They want to give their friends our health care system. I think they're in trouble to start with; I think we're all in trouble. I can't imagine what's going to happen if we enter an economic downturn like, on a personal level, I fear.

I worked in the early 1980s every day in a plant that was dependent on the auto industry. I was a municipal politician in a community that was dependent on the auto industry. Let me tell you that when it comes, it comes very fast. Plants that employed 3,000 people within months were down to 700 and 600 and then it rippled through the economy. If the government wants to bury its head in the sand and say, "This is not something we have to worry about. Everything's going to be fine"-they put themselves at some political risk. But I'll tell you, they put the rest of us, a lot of people, at a big risk in terms of providing for our families. I can remember well people who had worked for years who were not only approaching our welfare system and food banks but facing challenges they never thought they'd expect. When I look at the numbers I see in terms of layoffs in the auto sector, they are the kinds of things we saw in the early 1980s.

The Chair: Mr Christopherson.

Mr Christopherson: Thank you, Wayne and Ross. I'm glad you took at least a moment to recognize the fact you don't get in here very often on those major pieces of legislation, like the Employment Standards Act, that are just steamrollered through the House with no opportunity. Whenever the government members say to people, "Gee, we're really glad to have you in here. We like to hear from people. It's really important," it's very selective. There are a lot of things they don't want to hear from anybody and they've made sure they haven't. So I'm glad you raised that.

Obviously, the focus for you today is tax cuts and urging the government not to go down that road. I think the signal this morning from the Premier indicates they're not prepared to back off the accelerator in terms of tax cuts, even though as experts have come in-you talk about how quickly things change. Even in the last couple of weeks, some of the economists coming forward have been dampening their enthusiasm for tax cuts. Even yesterday, a gentleman from Nesbitt Burns came in. I don't want to put words in his mouth, but he was cautioning that they ought not to do the tax cuts right away. He was still committed to them, but he was saying to back off a bit. In the morning we had looked at a presentation that Hugh Mackenzie made that pointed to the fact that there was only one scenario that kept us out of deficit, and that was to back off the tax cuts, and if we were lucky enough we'd have a soft landing; if those two things happen, then we'd stay out of deficit.

Every other scenario says we're going under and, based on what the Premier is saying today, clearly they're not going to take their foot off the accelerator. If we get a further downturn, worse than what's being projected, and they're being revised constantly, almost daily, we're going to see a real crunch. The people who came in here at the beginning of this process a couple of weeks ago, who thought they were debating where we ought to go with a $1-billion surplus as a starting point, are going to find that we're worse off than we were a number of years ago.

I want to ask you directly about the tax cuts and kitchen table economics, because that's where things really matter in this province. It's my sense that it has taken a long time, but a lot of people who voted for this government because they thought they were going to get big tax cuts, which you've pointed out the vast majority of the middle class don't get, have begun to recognize-even the skilled trades auto workers with all the overtime. That's who's pointed to as the people in the blue-collar world who still voted for the Tories, and they did get back in. My sense is that people are finally beginning to make the connection that all the other things they're worried about-when they're watching tuition fees go up, the hospital closures, the schools aren't sufficient, all those things happening-they're beginning to realize there's a link between those cuts in circumstances and the cost on their quality of life and the argument that tax cuts are the way to go for the future. What's your experience? What are you hearing across the province as you move around from community to community?

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Mr Samuelson: I think, Dave, you've characterized it very well. I was on a phone-in show in Thunder Bay and this woman called in. She said her son was in grade 5 and that he used to get help with his schooling because he was challenged. She said her son no longer gets the help. Then she said, and these are important words, "My son will suffer because of this every day for the rest of his life."

I think these kinds of impacts of tax cuts, whether it's writing an extra few hundred dollars on a cheque for tuition or knowing that your child is not going to get the help they need, or somebody you know doesn't have access to a hospital or a shelter, those kinds of issues, become real to people. It takes some time for these tax cuts to work through the system, and I don't think there's any doubt that people in Ontario are starting to see what it means. I'm very fearful of what will happen in the future.

Just before I leave, and I know you're about to cut me off, you all have name tags. I've included here a list of some of the circumstances around the people who died on the streets of this city and this province in the last year or so. I'd just like to leave it with you so that you have a sense of what it means. Maybe you can talk to whoever is wasting your money on these ads and try and do something to really help people so they don't die on the streets of our cities.

The Chair: With that, I have to bring it to an end. On behalf of the committee, thank you very much for your presentation this morning.

ONTARIO CATHOLIC SCHOOL TRUSTEES' ASSOCIATION

The Chair: Our next presentation is from the Ontario Catholic School Trustees' Association. I would ask the presenters to come forward and state their names for the record. On behalf of the committee, welcome.

Mrs Louise Ervin: Good morning. I'm Louise Ervin, president of the Ontario Catholic School Trustees' Association. With me are Patrick Slack, our executive director; Regis O'Connor, our past president; and Carol Devine, our director of political affairs and media relations. With us in the audience is John Stunt, who is our incoming executive director. He will take over that position on May 1.

The Ontario Catholic School Trustees' Association, known as OCSTA, represents all 29 English Catholic district school boards and five English Catholic school authorities in the province. The association appreciates the opportunity to speak to you on their behalf.

In the fall of 2000, OCSTA prepared a brief on education finance, which is attached to our document, and submitted it to the Minister of Education. The brief was entitled Education Funding-Refinements and Enhancements. Our presentation to the standing committee on finance and economic affairs is based in large part on the education finance brief. It reflects the experience of English-language Catholic school boards following two full years of implementation of the province's new education funding model.

OCSTA and its member boards share the government's goal of providing high-quality education for Ontario students. We recognize, as does the government, that education plays a central role in both the economic and social development of our province. It is the route to economic growth and prosperity in a society that is increasingly dependent on knowledge and its application. High-quality education will help to keep Ontario competitive in our global economy.

Education requires access to resources of many kinds and the funding to secure these resources. Ontario has been experiencing a robust period of economic growth in recent years. Ontario's students must benefit from this prosperity. Education must therefore have a high priority in government spending.

OCSTA has long maintained that to be accessible, the education funding system in Ontario must respond to four essential principles: equity among all Ontario school boards; flexibility and autonomy to address the goals of the system and to meet local needs; accountability to ensure efficient and effective use of educational resources for students; and adequacy of resources in the funding system.

Mr Regis O'Connor: Thank you, Madam President. Good morning, ladies and gentlemen.

Positive steps have been taken in meeting many of these standards. OCSTA acknowledges and appreciates the actions of the government in establishing a fair and equitable funding formula for Ontario's four publicly funded school systems. All school boards are, as of this year, theoretically on the same footing for the application of the funding parameters. The initial and prolonged delay in implementing equity in Toronto and Ottawa, and the impact of many years of inadequate funding levels for the province's assessment-poor boards, continue to create challenges.

OCSTA applauds the minister's response to several recommendations made previously regarding refinements to the funding formula. Catholic school boards agree that responsible and accountable spending of taxpayer dollars is essential, and they continue to seek cost-effective ways to provide programs, services and administration. The quality of students' educational experience, however, must not be sacrificed in the search for cost efficiencies. Adequacy of funding remains an issue. Allocations to school boards within several areas of the new funding formula must be increased in order to maintain the quality system of elementary and secondary education in Ontario.

School boards must receive adequate funding allocations that are responsive to a variety of inflationary pressures. These include the following and, gentlemen and ladies, there are only a few: increases in the price of natural gas we see in the range of 30%; similar anticipated increases in the cost of hydroelectricity; fuel escalation clauses in boards' transportation contracts in the range of 3%; a 5% increase in the cost of textbooks over the last year; maintenance costs for technology in schools and board offices up by more than 20%; increased Canada pension premiums at double-digit rates over the past two years; increases in various health and dental benefits from 15% to 50%; and the necessity of fair wage increases for all our employee groups.

Mrs Ervin: Another area where funding increases are needed is special education. In 1999-2000, 21 Catholic boards found it necessary to spend more than the funding formula allocated for special education programs and services. Despite some increases for 2000-01, school boards report that funding remains inadequate to meet students' needs. OCSTA supports the creation of the minister's intensive support amount working group. We have written to Minister Ecker, stating our general endorsement for the working group's recent recommendations. In particular, we agree with the critical need for stability in special education funding; a formal process for clarification and refinement of ISA criteria; the need for the early release of information to school boards about funding allocations for special education; provisions to recognize boards' increased costs for delivering special education on an ongoing basis; a reduction in the administrative burden facing school boards applying for ISA funds; the recommendation for assistance for boards without access to professional assessments required by the funding process.

OCSTA supports the need for an equitable, comprehensive ISA claim process and for accountability in spending. We are deeply concerned, however, with the possibility that, for some boards, future ISA allocations could fall below the level at which they are presently being funded. If this were to occur, positive adjustments to the special education allowance would be imperative. The ongoing level of special education funding must be adequate and sufficiently flexible to enable school boards to meet the needs of our students.

Students with special needs who enter or move between Ontario school boards, including new kindergarten students, place legitimate funding responsibilities on school boards. A year-long delay in a board's ability to qualify for ISA finding for high-needs students is critical for that board. Services must be provided for these students immediately, therefore funding for these services is necessary immediately. School boards must have access to an efficient in-year process to fund the programs and the administration of these programs for those students.

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Mr O'Connor: Allocations must also increase in the funding to support students who, because of a variety of socio-economic and cultural factors, require special assistance. Some of the most effective programs in this area address the educational needs of our young children. Research, including the Mustard-McCain report commissioned by the government in 1999, confirms the importance of early childhood education in determining a student's future success. Investment in early childhood education is a wise use of education dollars. Early childhood education is good for all children but particularly necessary for those already disadvantaged by their economic or social circumstances. Additional funds to strengthen this program are needed.

Therefore our association, OCSTA, strongly recommends that the education budgets for 2001-02 recognize and accommodate the inflationary and special-needs pressures on school boards.

Mrs Ervin: OCSTA appreciates the opportunity to present this brief to the standing committee on finance and economic affairs. We again wish to commend the government for its commitment to the implementation of a student-focused, equitable model of education funding. We believe that the success of a new model will depend heavily on how well the overall amount of funding for education in Ontario responds to cost increases and the changing needs of students, schools and school boards.

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

Mr Kwinter: Thank you very much for your presentation. I'm sure you heard that the elementary schoolteachers have settled their problems and they are now going back to a full workload, and in order to get that, they've agreed that there'll be a reduction in the number of teachers. They then went on to say that this reduction is OK because it's going to be done by retirements and attrition.

I was disturbed by a comment about that, saying it may require teachers who are in special teaching situations like music and art and guidance to move into the teaching role in order to accommodate these reductions.

In your brief to us you say, "The quality of students' educational experience, however, must not be sacrificed in the search for cost-efficiencies." To me, this announcement today goes directly to that issue, that economies are going to be literally imposed on schools, but the loser is going to be the quality of education. Do you have a comment on that?

Mrs Ervin: The situation you're bringing forward is specific to the Toronto public board, and I really feel I shouldn't be commenting on their collective agreement. To my knowledge, that has not happened anywhere in our system, but I'm not familiar with the intricacies or the decisions that have been made around each collective agreement.

The fact remains that the Catholic boards have been so far behind for so many years that we have not had the luxury of having all these extra staff in our systems. Our teachers have been teaching, and the positions that did not require certified teachers did not have certified teachers in those positions. So I don't think you would find that kind of situation in our boards.

Mr Kwinter: You've also stated in your brief that all the boards, the four systems, are pretty well on a parity level. Aren't you going to find that the pressures that apply to the other boards are going to impinge on your particular board, now that they're on an equal basis?

Mrs Ervin: Regis may want to speak to that.

Mr O'Connor: If I can use the analogy of a thermometer, the public boards are up here and the Catholic boards are down here, and we're trying to get to an equitable level. We're not there yet; we're still a long way from it. You used the example of music programs, and there are other programs in the school that are in the same dilemma.

Teachers have tried over the years, no matter what panel they belong to, to achieve the same level of salaries. In order to get to that same level, some boards have had to make drastic cuts. We won't call them frills, because they're not frills, but things like special education and all the consulting services that go with them have been cut dramatically. Carol and Pat may want to add to that, because I don't have figures to give you today, but there are figures that back that argument up.

Obviously the teacher in the classroom hasn't changed. The government has PTRs. The grade 4 classroom is a grade 4 classroom, with an average of 22 to one. But all the services behind that teacher, whether they be in the board office or in the consulting area, have been cut. The administration has been cut dramatically. I think that was the original intent when the government brought in this type of legislation, that we were going to cut the fat, if I can use that expression, out of it.

Mr Christopherson: Thank you for your presentation. One of the things I hope the government takes note of is that virtually across the board, whatever community we were in or whatever sector, we had representatives from all aspects. For instance, colleges and universities: in every community where the college made a presentation, they had representatives from the board of governors, the faculty, support staff, students were there; the same with the universities. In other words, their message was a common front, which can have a powerful impact because often those groups within systems have tensions that inevitably lead to a circumstance where it's difficult for them sometimes to reach a united front, and with different objectives and priorities.

One of the things we've been hearing from teachers right across the board is the lack of morale, that teachers are stressed, that teachers in record levels are off on long-term disability, that many are taking early retirement but are not retiring, just retiring out of the teaching profession and moving on elsewhere, to the point where anecdotally I hear of teachers who, when they're approached by nephews and nieces or their own children about whether they should go into the teaching profession as a career, are quietly advising them not to, that it's not the world it once was. They don't see any brighter light in the future so they're quietly saying to them, "I would suggest you look somewhere else. What I experienced is not what you would experience."

Is that your sense within your area of responsibility? Is this a problem that you recognize, this demoralization, the fact that teachers just feel like they've been kicked and kicked and put down and it's kicking the stuffing out of the stuff that makes good teachers do their thing?

Mrs Ervin: I can certainly start responding to that. The issue of teacher morale is very real in all our boards. Something needs to be done. The issue of teacher shortage is also very real. We are all looking down the road and seeing that in a few years, and even as close as this September, some of our boards will have a great deal of difficulty filling some teacher positions. Some boards have teams going across the country and are even communicating with countries overseas to try to get teachers, but we're all trying to rob each other. They are trying to do the same things. There is a critical teacher shortage in England and Australia and New Zealand and they are trying to get our teachers. Even in the States it's the same situation. So the two, I believe, are very real and probably connected in more ways than we think.

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Mr Christopherson: The similarity between teachers and nurses is striking in terms of the shortage, the demoralization, the fact that there is a whole lot of poaching going on, if you will. I know there are some provinces who are raising that alarm.

What should the government, which ultimately has the responsibility for dealing with these things, be doing? Or, by addressing all the things you're recommending, is that the kind of message teachers want to hear, that their profession and their efforts matter and that this government does care about children, particularly the early years, and they're prepared to put their money where their mouth is? Is that the message they need in order to turn this around, or is there something else?

Mr Patrick Slack: I could quickly offer an answer, and I'm not sure it's an answer; it's a suggestion that there are probably two or three things that really have to happen. One is that, when I grew up, I respected the teacher quite sincerely and so did my parents. I don't think that respect is at the same level that it was. I think that has to come from me and from you and from others too. The government and the entire population has to respect the profession that offers the basis of our economy, the basis of our society. It's so essential that we return to that important work the due respect it should have. It should come from within the profession itself too. No one is excused from that. I do think, though, on the morale issue, that would be part of it.

The other is to allow time for professional teachers to do the professional job. You can't just count minutes of teaching the way we've done it recently. It's not a clocked job. Some kids need special care on a certain day. They need some love. They've lost a friend or they've had a family fight or a family breakup and it just isn't on the book.

Mr Doug Galt (Northumberland): Thank you for your thoughtful presentation. I'm just wondering how you would respond when you're into negotiations and get information that isn't exactly correct. I'll reflect what we were given by OSSTF last week. We were told by them that average spending in Ontario was $4,992. They were comparing this with the Great Lakes states, saying we were $3,550 below their average. In fact, after our researchers to the clerks of the Legislature checked this out, dividing almost two million students by almost $15 billion being spent on education, the average being spent this year is $7,503. We really don't know from that research what they put into the average education in the States, whether they included some of the health costs that we have that come from the Ministry of Health, whether some of the security would have been in there, but it's very misleading information, at least in my opinion. If you were given that by OSSTF, how would you handle it?

Mr O'Connor: I'll try. We don't deal with OSSTF. We deal with the Ontario English Catholic Teachers' Association.

Mr Galt: Well, I'll say one of the unions that you deal with.

Mr O'Connor: Right. The way negotiations are set up now, it's an adversarial type of game, if you wish. Tina will remember a few years ago we had six boards in this area on strike, and we went through literally hell for about six weeks over this very thing.

If you want to compare us to the Americans-

Mr Galt: Not me.

Mr O'Connor: -or whoever, that's fine, because we don't belong in that country; we don't play their games. If we want to talk about extracurricular activities, a lot of American states pay their teachers for extracurricular activities. We've gotten away from that, or we haven't gotten to that point yet.

As far as average cost per student, there are differences. We could have brought numbers here for what Catholic boards spend on students and what public boards spend on students, but we weren't going to do that because it would lead to an economic argument that may be embarrassing for some people. But yes, there are differences.

Mrs Molinari: Thank you for your presentation. I appreciate your taking the time to be here. Certainly I know full well that Catholic boards have been doing a lot more with a lot less for many, many years and now it's time to come back and to get equity, but equity is still not there because in getting those who have been spending high to move down, it's being sensitive to their taking the time to come down.

I wanted to just make a couple of comments. The teacher shortage is worldwide. Irene Atkinson from the Toronto District School Board as much as said that and recognized that. That's not just here in Ontario or just in the Catholic boards.

With respect to teacher morale, we all need to take responsibility for teacher morale. I think some of the unions haven't done too great a job at keeping that morale in the schools.

Special education, as you talked about in your presentation, is certainly an issue that is near and dear to me. There's a lot of work being done with the minister at this point in time, working with various groups to improve the funding for special education. It's an ongoing process of finding better ways to better serve the students. I'm hopeful that in time that will continue to improve. I don't think we'll ever have that perfect model, because there's no student who fits right into a perfect peg, but I'm hopeful that in the future we'll be able to continue to improve on that.

One of the comments in your presentation that struck me is that special-needs students who enter and move between Ontario schools are having a difficult time having that funding follow. That's something I'm going to look into because my understanding was that with the new model the funding would actually follow the student and it was a more clear way of having that money follow the student. If that's not happening, then we need to look at why and what we can do to improve on that. Certainly the paperwork and the extra burden of the administrative work that teachers and others have to do to fulfil that requirement for that funding is something that's also being looked at, because we want the teachers to spend more time with the students and not so much on administrative work.

Thank you very much once again for your presentation. It's helpful that you've also included last year's report with your presentation. Although I don't think you had the opportunity to present to the committee last year, I know you did submit a written report, and it was certainly considered along with all of the others. So, thanks again for all the wonderful work you do and all the challenges that I know you face on a daily basis.

The Chair: On behalf of the committee, thank you for being here this morning.

ONTARIO RESTAURANT HOTEL AND MOTEL ASSOCIATION

The Chair: The next presentation is from the Ontario Restaurant Hotel and Motel Association. I would ask the presenters to come forward and state your name or names for the record. On behalf of the committee, welcome, and you have 30 minutes for your presentation this morning.

Mr Len Little: Good morning. My name is Len Little. I'm the chair of the Ontario Restaurant Hotel and Motel Association. My colleague is with me today, Terry Mundell, who's the president of the association.

I would like to take this opportunity to discuss with you the importance of the hospitality industry to the Ontario economy, some of the challenges we have been facing and perhaps to suggest some remedies to those challenges.

The Ontario Restaurant Hotel and Motel Association is a non-profit industry association that represents the foodservice and accommodation industries in Ontario. The association was formed by a merger of two 75-year-old associations: the Ontario Hotel and Motel Association and the Ontario Restaurant Association. Dedicated to the growth of a thriving and competitive hospitality industry, the ORHMA provides a series of value-added benefits for its members. These include several cost-saving initiatives, group purchasing programs and educational services. The ORHMA's government relations department represents the industry's interests to the government of Ontario and to city halls across the province.

Ontario's hospitality industry is one of the most dynamic and significant sectors of the provincial economy, generating $16.3 billion in annual sales or, put another way, 5% of the provincial GDP. With over 22,000 foodservice establishments and almost 3,000 accommodation properties across the province, the hospitality industry directly produces over 400,000 jobs, representing 6.1% of total employment and 17% of youth employment.

However, contrary to the popular belief that the hospitality industry is booming, average profit margins remain a razor thin 2% to 5%. While the provincial economy grew by 6.1% in 1999, the hospitality industry continues to face uneven employment growth. For example, during 2000, employment grew by 3.6% in the foodservice industry, but failed to grow in the accommodation sector. This pattern followed 1999's 2.2% rate of employment growth in the foodservice sector and an alarming 11.8% decline in the accommodation industry.

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These difficulties have been a result of rising input costs, declining tourism and continuing impediments to investment. For example, while overall prices grew by 2.9% in Ontario during 2000, energy prices grew a staggering 16%. Indeed, we have heard from some operators that energy bills have increased by over 120%. The industry needs immediate relief, especially in northern and rural Ontario, where many of these effects are more pronounced.

Even with these rising costs, foodservice establishments have been forced to cut meal prices by an average of 1% to remain competitive, while accommodation properties have faced a 2.6% decline in province-wide occupancy rates. The result has been a less competitive hospitality industry globally speaking, weakening investment and limited employment gains.

Our submission focuses on a number of proposed tax initiatives that the provincial government can implement to assist in restoring stability and growth in Ontario's hospitality industry.

While the ORHMA would certainly support and encourage the government to consider a reduction in the overall provincial sales tax, today we bring forward some alternate recommendations that will have a positive impact for both our industry and for job creation and growth in the province of Ontario.

The first initiative the association would like to recommend is that the province eliminate the capital tax. Ontario's capital tax is a profit-insensitive tax that directly acts as a barrier to investment. It is important to note that many comparable jurisdictions are not instituting capital taxes, and others, such as the province of Alberta, have recognized the harmful effect of these taxes and have decided to abolish them completely.

Hospitality businesses require a tremendous amount of initial capital investment in order to establish an operation. Since capital taxes are a barrier to investment, it hurts Ontario's potential to attract investment dollars in multinational operations since many other jurisdictions across North America have a clear competitive advantage over Ontario because they do not have a capital tax. This has been especially pronounced in Ontario's accommodation sector, which has suffered 6,416 job losses, or over three jobs a day, since 1996.

The capital tax has also discouraged many important investments in small business enterprises throughout the province. The government has indeed recognized the harmful effects of the capital tax on small business in its decision to raise the capital tax exemption threshold from $2 million to $4 million. However, this does not go far enough. Eliminating the capital tax will result in increased prosperity and job creation across the province, while also raising the profile of Ontario in the international community as a destination to invest and do business.

The next initiative we would like to propose is that the government eliminate the corporate minimum tax. The ORHMA heartily supported the government's decision in the 2000 budget to reduce the small business tax rate from 8% to 4% and the general corporate tax rate from 15.5% to 8%. However, in addressing corporate taxes, the government must consider the elimination of the corporate minimum tax.

Ontario is the only jurisdictions in Canada that has a corporate minimum tax. While there are some states in the United States with a similar tax, Ontario's corporate minimum tax acts as a direct disincentive to investment and is an irritant to businesses. Indeed, many companies which will not be required to pay the tax are still required to undertake the complex calculation that accompanies the corporate minimum tax. Furthermore, the corporate minimum tax currently raises little revenue for the government.

The hospitality industry struggles to attract investment dollars, and the corporate minimum tax sends a negative message to many domestic and international investors that are looking to invest in Ontario by placing an additional potential tax burden on business. Members of the ORHMA support the elimination of the corporate minimum tax and request that the government take action.

There are two initiatives relative to property tax reform that the ORHMA requests the government consider. The first initiative under property tax is the requirement of municipalities to reduce the overall commercial tax burden. Property tax levels in Ontario are currently, in our opinion, one of the largest impediments to new investment. In fact, hospitality operators have cited the incredible burden of property taxes as one of the primary reasons for closures. While it is recognized that the government has made efforts to modernize Ontario's antiquated property tax system, further reform is still required. We understand and commend the government for the difficult decisions it has made in dealing with property tax reform, but we believe some of the most difficult decisions still need to be made.

While caps and the accelerated reduction of the business education tax ratios for those municipalities over the provincial average have gone a long way in providing businesses with short-term stability, it is clear that long-term solutions are required.

Although property tax is a shared responsibility between the province and municipalities, it is becoming painfully clear that municipalities are just not up to the job. Election-sensitive municipal politicians are reluctant to shift any burden on to the residential tax base. In fact, to date only a handful of municipalities have taken steps to move their business tax ratios closer to the provincially set range of fairness.

As a result, we recommend that at the conclusion of 2001 if municipal governments have not taken considerable steps in moving their tax ratios toward the provincially set range of fairness, the provincial government immediately require municipalities to reduce commercial property tax ratios and further require all municipalities to be within the range of fairness in five years.

The next issue relative to property tax is the methodology used to assess accommodation properties. As already mentioned, members of the ORHMA are supportive of the government in their efforts to address the core deficiencies of Ontario's property tax system. Ontario's accommodation industry, however, warrants immediate attention and action to rectify the damage that is being caused due to an incorrect and punitive assessment method.

Currently, as you can see from the graph on page 9, Ontario accommodation properties pay the highest amount of property tax on a per-establishment basis compared to the rest of the country. Further, Ontario's accommodation properties pay almost 80% more in property taxes than the national average.

Currently, the Assessment Act clearly states that the value of a property for property tax purposes is to be based on the value of the land plus buildings. The assessment for accommodation properties does not meet this standard.

In discussing the business value included in a hotel, assessors recognize that business value does exist. However, they do not adequately deduct that business value.

Assessors in Ontario have concluded that deduction of a management fee removes the entire business component. This is a mistaken assumption and has resulted in the assessment process of hotels becoming a de facto income tax. The more income the hotel earns, the higher the value, the more property tax it pays.

Members of the ORHMA request that the government amend the current assessment methodology being applied to accommodation properties for the purposes of property tax and change the methodology to ensure that the business enterprise value is fully deducted.

The next issue I would like to discuss is increasing the PST basic exemption threshold from $4 to $6 on restaurant meals. During previous pre-budget discussions, there was consensus from all stakeholders that increasing the $4 PST threshold was a positive initiative for the province of Ontario to undertake, and yet the government has not moved on this issue. As such, we would like to take this opportunity to reiterate our position regarding this initiative.

Meals currently purchased from foodservice establishments under $4 are not subject to provincial sales tax. This PST threshold of $4 has not been increased since it was established in 1987 and has lost significant value in real terms due to inflation. As such, it now represents a barrier to growth in the foodservice industry.

This issue has widespread implications for our industry. Over the last decade, as food and operating costs have continued to rise, this threshold has remained fixed. As a result, there has been substantial erosion of margins, especially for mom-and-pop operations whose clientele are very sensitive to the threshold. It is not uncommon to see families purchasing meals separately to avoid the tax, and, further, small operators usually price their breakfast, dinner and children's specials below the $4 limit to meet their customers demands. Unfortunately, the impact is diminishing profit margins, which obviously have a detrimental impact on the viability of a restaurant and the operator's ability to reinvest and grow their business. This has consequences in terms of sustaining existing employment levels as well as creating new jobs.

The ORHMA strongly recommends that the 14-year-old $4 PST threshold be increased to $6, where it would be if it increased with inflation.

The employer health tax threshold is the next issue I would like to raise. Profit-insensitive taxes such as the employer health tax have a disproportionate impact on labour-intensive workplaces such as foodservice and accommodation establishments. The ORHMA supported this government's initiative of eliminating the EHT on the first $400,000 of payroll. The introduction of this initiative in the government's 1996 budget has assisted the foodservice industry in the creation of over 93,000 new jobs. We believe that now is an appropriate time for the government to move beyond the original exemption limit of the first $400,000 of payroll and raise the exemption limit to the first $600,000 of payroll. This tax relief measure will directly assist Ontario's many small businesses to create new jobs. In fact, in Ontario's hospitality industry, the vast majority of foodservice and accommodation operators are small businesses. These establishments, which traditionally have profit margins of 2% to 5%, would directly benefit from such a reform.

Increasing the EHT exemption threshold for businesses to the first $600,000 of payroll will make it consistent with the government's annual paperwork threshold for EHT and will help to keep Ontario competitive. Our closest neighbours to the west, Manitoba, have a higher EHT threshold exemption: the first $1 million of payroll.

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The final issue we wish to bring to your attention today is an issue we have discussed in pre-budget discussions before, and that is the gallonage fee. Jurisdictions outside Ontario are now leading the way in recognizing the importance of reducing gallonage fees. The province of Nova Scotia announced last year that their gallonage fee will be chopped in half, and the red tape reduction committee in New Brunswick recommended that their gallonage fee be eliminated.

One of the main constraints to the hospitality industry is the high level of taxation. More than any other tax, the gallonage fee currently applied on beer, spirits and wine bought by licensed establishments appears unjustified, as it supports taxation on top of taxation. Currently, licensees in Ontario pay two separate and distinct licensing fees. One licensing fee is a fixed annual licence fee, and the other is a variable volume or price-based fee-the gallonage fee-applied to licensee purchases of beer, wine and spirits. According to the Liquor Licence Act, applicants for a liquor licence are required to pay application fees of between $685 and $815, pay a fee of $240 upon the issuance of the liquor licence and pay a renewal fee of $300. In addition to these licensing fees, licensees are further required to pay an additional licensing fee known as the gallonage fee, which is (a) $2.64 per hectolitre of beer and (b) an amount equal to 12% of the purchase price of wine and spirits.

This results in two fees for every licensed establishment. After being charged these two fees, licensees are required to charge an additional tax-10% PST-on the sale of alcohol to their customers. It has long been the view of the ORHMA that the gallonage fee paid by licensees supports a situation whereby taxes are being charged on top of taxes and, hence, needs to be eliminated.

In conclusion, I would like to remind the government that the hospitality industry in Ontario is a dynamic and important part of the economy; however, it has not yet returned to operating at pre-recession levels. We believe these initiatives, if adopted, will assist the industry to grow and will help the government in its job-creation mandate. Further, while the government has taken some important steps to increase tourism, more must be done.

Thank you for your time today. We would be happy to answer any questions you have.

The Vice-Chair (Mr Doug Galt): Thank you very much for your presentation; it's much appreciated. You've got me doing some new thinking when you talk about liquor and gallonage; I never thought of it quite in that size before. We have about four minutes per caucus, starting with Mr Christopherson.

Mr Christopherson: Let me say I'm surprised at that, because most people who watch you drinking think in terms of gallonage. I am joking, of course, when I say that. I want to make sure that's on the record.

Thank you for your presentation. You will probably know there are a number of scenarios that suggest the changing economy under us is not going to be good for anyone. There's a train of thought that suggests that continuing with the tax cuts that are planned, or any others, is going to have a dampening effect on the government's ability to sustain expenditures. As we see from this morning, there are even going to have to be cutbacks to offset the lack of revenue.

What I want to pose to you is, how do you see this benefiting you, at least in the short to medium term, when the scenario goes like this? If they continue with the tax cuts, they don't have enough money coming in to maintain a balanced budget, and the only way you can do that if you're cutting your revenue at a time the economy is dampening is to cut spending. We see from the news clips today that's exactly the direction the government is going; they're going to be cutting.

If they start cutting, based on the presentations we've had over the last two weeks, what we're going to see is a huge impact on municipalities. They are already struggling. We know what's happening here in Toronto. I pointed out the 15% increase in water and sewer rates in my home town of Hamilton to deal with infrastructure problems because the fiscal pressure is so great on them, in large part because of the downloading, that they're having to increase costs, and property tax has been pointed to by virtually every business group as a key component. So you've got upward pressure on a key indicator that affects your industry and every other business, and this is going to be exacerbated by pushing for more tax cuts.

In addition, universities have come forward and said, "If we're going to continue the kind of value-added economy we've had in the past, we've got to make significant investment in universities." It's not just the universities saying it; it's the business side. The TD Bank was in here making that post-secondary education pitch. So on the university side there is the whole ability to keep the momentum going in terms of the economic drivers, and the same pressure on the college side. I don't need to tell you that a lot of the people who work in your management positions graduate from community colleges, so it's going to have an impact on you there. We had a roads presentation this morning. We know the road infrastructure, which obviously is key to the hospitality industry, is feeling incredible constraints.

All these things require an infusion of money, which is the opposite direction the government has to go in, because it looks like they're going to continue with their tax cuts. I'm not trying to play some little game and trap you into a box, as unfortunately I think the chair of AMO thought yesterday. I'm merely trying to pose to you a set of economic circumstances that say to me it's really not in your best short-, medium- or long-term interest, regardless of whether we agree philosophically about tax cuts, to be advocating tax cuts at this time. Your thoughts, please.

Mr Little: I'll speak a little bit, and then Terry maybe can add to it. First of all, I think tax cuts give people more disposable income and then they have more income to spend in our restaurants and hotels. The industry is already at a competitive disadvantage, particularly-and unrelated to the provincial government-with the GST issue and the fact it's being charged in restaurants and not being charged in a lot of the takeout and Loblaws type of situations. I think the tax cuts create more income for us. Do you want to add to it?

Mr Terry Mundell: Just to that point, you talked about infusion of money, Mr Christopherson, and we talked specifically about the capital tax. We, in our industry, are now competing with multinational jurisdictions in terms of getting capital dollars invested in Ontario to build new hotel accommodation stock and reinvest in the hotel accommodation stock we have. Presently, the capital tax is clearly a barrier to our investment opportunities. We're seeing those monies go to other jurisdictions in the United States when you're competing on an international basis.

Having said that, that doesn't allow us the opportunity to reinvest in our businesses, it doesn't allow us the opportunity to expand our businesses, it doesn't allow us the opportunity to generate revenues in the tourism and hospitality industry, which is so important to us. So that is a significant barrier for us in terms of infusion of capital.

The Vice-Chair: We move on to the government side. Mr Arnott.

Mr Ted Arnott (Waterloo-Wellington): Thank you very much for your presentation. You've done a very good job of representing the views of your members to this committee in previous years, and this year is obviously no exception in terms of the constructive suggestions you put forward for our consideration.

I want to go on the record as saying I support your suggestion that the employer health tax threshold should go from $400,000 of payroll to $600,000 of payroll. I think that would be a significant incentive for employers to hire. We have seen in the past that these profit-insensitive taxes-and you also talked about the capital tax-have been ones that have discouraged job creation. This is something we need to be looking toward in the year ahead. Thank you for making that recommendation.

I want to ask you about the property tax point you made. You suggested that very few municipalities are moving toward the range of fairness that the government has encouraged. It's been my understanding that they're required to move toward that range of fairness, and you've suggest that very few have done that. Could you elaborate to some degree on that? My understanding is that they are required to move toward it. Am I incorrect?

Mr Mundell: Essentially, municipalities are required not to move away from the bands of fairness but they're not required, in any way, shape or form, to move those taxation levels back toward the bands. They can't move away from them. So if they are doing any shifting, they have to shift toward the bands, but they're not required to actually get there in a specific period of time. So you could stay outside the bands of fairness from now until eternity.

We know the government has made significant efforts on the education levy side of the equation. That has helped and will continue to help. We continue to believe that municipal governments need some pressure applied to them so they do in fact and are required to move to those ranges of fairness in a reasonable time frame.

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Mr Arnott: Would it help if the government published a list of those that are doing well in that respect and those that perhaps need to work a little harder?

Mr Mundell: I don't particularly think a list or disclosure would force a municipal government to change its tax policy. The lists have been published before. As you're well aware, I was in municipal government for some time. We've seen the lists before. Quite frankly, they are decisions that are made by individual municipalities on their own property tax system. We don't believe that would force them to get there; it hasn't to date. We believe stronger measures are needed.

The Vice-Chair: Very quickly.

Mrs Molinari: I have just one question about elimination of the capital tax. We've been hearing that quite consistently in the presentations. Do you have any idea how much it would cost the provincial treasury?

Mr Mundell: Elimination of the capital tax, to the best of my knowledge, is about $1.5 billion for the provincial treasury. It is a significant amount of money. It's also my understanding that there is an input credit which the federal government would receive, about a $350,000 to $400,000 windfall, I think. But again, to the effect it has on our industry, without eliminating or putting forward a concrete plan to eliminate the capital tax, we are losing head offices. We're losing head offices to other competing jurisdictions, not only in Canada but in the United States. By losing those offices, we lose the spinoff. We lose the spinoff meals, we lose the spinoff business travel, we lose a lot of those benefits in Ontario. It affects our ability to generate revenue, which affects your ability to generate revenue.

Mrs Molinari: So is it safe to say that tax cuts create a better economy?

Mr Mundell: In our industry, tax cuts, clearly, and disposable income correlate to jobs and investment.

The Vice-Chair: I'm going to have to move on to the official opposition.

Mr Kwinter: I certainly support the employee health tax increase to $600,000. I think that makes sense.

I have a little concern about the competitive pressures on, certainly, the accommodation part of your industry. I understand when you talk about the spinoffs because of the investment of others, not the hospitality unit but other businesses. But from a hospitality point of view, it isn't like any other business. You can't say, "We're in a competitive situation and we can put this hotel in Sault Ste Marie at a much cheaper price than we can in Toronto, so that's where we're going to put it." The investment is made on the market, not necessarily on the cost, and if the market can sustain the cost, regardless of what it is.

This committee has been travelling. We've been staying at accommodations in one place where they charged us $70. The next place charged $130 and the next place charged $90, all for the same kind of accommodation-

Interjection.

Mr Kwinter: -well, not quite. Certainly I would say two of the accommodations were comparable, with quite a discrepancy in the price. What determines the price is the market and the competitive situation, not so much who is out there but where you can get the business you're going to get. People make that decision, and they base that on that decision.

I'm quite interested to hear you say the accommodation industry in tourism has dropped. It was my impression that tourism was increasing in Ontario. Is that not the case? I'd like to hear about that.

Mr Mundell: In fact, Ontario experienced about a 1% decline overall in international tourism during the first half of 2000; however, foreign visits increased by about 1.5% nationally. Having said that, we think the government has made some significant efforts to increase tourism in Ontario through the Ontario Tourism Marketing Partnership. We very much support that initiative. We tend to believe that significantly more needs to be done. The government needs to continue to invest in tourism; it's extremely important.

We look across Ontario, and you talk about market impacts and how decisions are made based on market impacts. In fact, that is correct and partially correct. Investments are made on return on investment and what the bottom line looks like for those properties in each individual marketplace. There are varying input costs across Ontario, for sure, but we continue to find significant barriers to accessing capital. The return on investment is not where it should be because of the high input costs of property tax and capital tax, two significant barriers to return on investment, two significant barriers to getting extra capital to reinvest in our business. That's anywhere from the some 1,100 properties that are under 30 rooms to the over 800 or 900 properties that are over 30 rooms. It's the same type of issue for them: it's the return on investment. It's going to the bank to access that capital to reinvest in your business.

Mr Kwinter: For example, there's a hotel built in Toronto, half a block from here, where they've invested millions and millions of dollars. I assume they have made the business case that they can get a return on that investment. You can't put that particular investment virtually anywhere else in Canada and get that kind of return. I understand for a small operator it's a very serious problem. Maybe there should be a sliding scale where, because of the infrastructure support and everything else that goes with it, there has to be some payback for the government that's providing that. For someone who has a small mom-and-pop operation, where that isn't the case and they're still subject to the same tax regime, maybe there should be some adjustment.

I have some difficulty in an industry that is so very site-specific as to whether they survive or not. If they're not in the right location, it doesn't quite matter what tax incentives, they're not going to make it. I don't know how you address that.

The Chair: On behalf of the committee, thank you very much for your presentation. Our time has run out. We appreciate the content and input.

ONTARIO PUBLIC SERVICE EMPLOYEES UNION

The Chair: Our next delegation is the Ontario Public Service Employees Union, if that delegation would like to come forward. Thank you very much for appearing before our committee.

Ms Leah Casselman: I wouldn't have missed the opportunity.

The Chair: We can give you a second to take your coat off.

Ms Casselman: Sure. I'll even roll up my sleeves.

The Chair: You have a half-hour for your presentation. Whatever is left over from your presentation will be split up evenly among the three parties to ask questions or make comments.

Please state your names to begin with for the record.

Ms Casselman: My name is Leah Casselman. I'm the president of the Ontario Public Service Employees Union. With me is Jordan Berger, the director of research for OPSEU. Thank you for the opportunity to address these hearings. It's nice to see all these folks are still around and still doing their jobs.

OPSEU represents 100,000 public sector workers in Ontario, including the vast majority of workers directly employed by the Ontario government.

Obviously the fiscal decisions of the provincial government have a direct effect on our members and on the services we provide to the public. As a result, we look with anticipation and some considerable concern to this upcoming budget. Given the slowdown that is already having an effect in Ontario, we urge the government to change their own approach to fiscal policy.

This year more than ever the government faces a fundamental choice: either to continue hollowing out public services through tax cuts or to take courageous action now to preserve public services.

The Premier's announcement yesterday that he intends to cut public spending even further does not bode well for the future. It could also undermine the province's economic prospects for years to come. As a general observation, when economic times are good, ruling parties point with great pride to their own policies as the cause of all prosperity. However, when the economy takes a turn for the worse, ruling parties throw up their hands and portray themselves as victims of global economic trends.

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For the last six years, the Harris government has peddled the line that provincial tax cuts create economic growth. While the tax cut pledge is central to the Common Sense Revolution, there is little evidence to suggest that it has attracted much public attention or support. Few Ontarians have noticed the tax cuts and fewer still see tax cuts as a higher priority than good jobs and good public services.

This is a mystery that requires some exploration. It is our opinion, and has been our opinion for some time, that the tax cut strategy is an ideological one, not a political one. The ruling Conservatives had the great fortune to be elected during a period of unprecedented economic growth driven by the US economy, a low dollar and low interest rates.

Six years ago, the Harris Conservatives realized that the public anger that sustained their agenda of public service cuts, scapegoating and tax giveaways would decline as the North American economy recovered from recession. The only way to counter public pressure for reinvestment in services was the tax cut agenda. Tax cuts would allow the Conservatives to maintain high deficits-the government has added about $80 billion to the provincial debt since 1995; not bad for a guy who wants to get his fiscal house in order-and then they plead poverty.

We must admit they have been quite successful in this approach, though. Only recently, with growing public concern with the state of the environment and our health care system, has the government been forced to promise reinvestment in public services.

This approach to public services-to slash them and deny the consequences until a crisis forces action-will not be sustainable in the near future, either socially or economically. While the social consequences of health care underfunding and environmental neglect are painfully clear, the economic consequences are largely ignored by this government.

Ironically, in the promotional material that Ontario uses to attract foreign investment to the province, the government actually recognizes and stresses the economic importance of well-funded public services. These documents state, for example, "US manufacturers pay, on average, more than $3,100 per employee"-I guess that would be US$3,100, so it's probably about C$5,000-"for the kind of health care coverage provided by Canada's publicly supported system."

Clearly, safe communities, clean water, an efficient, affordable health care system and good infrastructure are some of the factors that attract talent and capital from outside our borders. The quality of life we all enjoy is a major determinant of economic growth, and yet here at home this simple truth is always denied. Here in Ontario the government does not discuss the economic benefits of public services. Instead, citizens are encouraged to look entirely to the private sector for economic growth and to look critically at their public services, as if the two can be separated. Well, they can't.

The recent tragedy in Walkerton, Ontario, produced a huge amount of negative publicity for the government and, unfortunately, for our province. It is not only the citizens of Ontario who wonder if their tap water is safe; it surely must be a major concern as well for anyone considering a move to Ontario, be they investors, nurses, doctors or engineers.

Here are some recent developments that speak to the problems we face in maintaining our quality of life.

First, there is labour law reform. Despite the clear link between quality of life and economic success, the government has seen fit to further undermine the Employment Standards Act. How can we claim that Ontario is the best jurisdiction in North America in which to live, work, and raise a family when workers are forced to put in 60-hour weeks without overtime? We thank the government, and this will be the only time I'll do this-that got their heads up-for providing unorganized workers with such a powerful incentive to unionize, but we question whether the obsession with 19th-century labour standards will really help us build a 21st-century economy.

Last November, the Provincial Auditor issued a damning report which emphasized some of the consequences of Tory policies: staff cuts in the Ministry of the Environment led to a 34% reduction in environmental inspections; downloading and privatization have reduced governmental accountability as services have been moved beyond the scope of the Freedom of Information and Protection of Privacy Act; as a result of ill-considered downloading, the estimated cost involved in returning ambulance emergency response times to 1996 levels has grown to $100 million; Andersen Consulting, one of your favourite groups to send money to, continues to be paid three times the ministry rate for analysts and six times the rate for consulting-you folks have money to burn; the problem is, it's the public's money-the government's megajail strategy is being implemented without even a basic business plan.

On that last point, OPSEU has learned that there is no Canadian company that even qualifies to run the new 1,200-bed maximum security institution in Penetanguishene, the first private prison in Canada. What a claim to fame for you folks. Allowing profits to be shipped offshore to American and British prison conglomerates doesn't do much for Ontario's economy.

Of course, prisoners are not the only ones who suffer in the new tough-love Ontario. The employers represented by the Ontario Association of Children's Aid Societies have recently released a report on CAS workloads. This report supports our long-standing argument that services for the most vulnerable children in our province cannot be sustained without additional resources, and I don't mean just reannouncing money you've announced before. Our research shows that the current funding formula in this sector gives our members four to six hours of care per child. However, we know the bare minimum we need is nine to 11 hours per child.

And of course, despite unprecedented spending levels, the state of our health care system remains precarious. OPSEU, among others, has already pointed out to the government that their hospital cuts were premature and ill advised. The staffing shortages caused by these cuts will take years to overcome.

This Tuesday past, 20 of the 23 hospitals in the greater Toronto area were redirecting ambulances away from their doors. The state of Toronto's hospitals is only one indication of the problem facing our urban areas. While American states pour money into their cities, realizing that healthy cities are key to economic prosperity, this government is forcing Ontario cities to make major service cuts on the cusp of a severe economic downturn.

In the field of education, a public service that is critically important to the knowledge economy, the government continues to lag behind almost every other jurisdiction in North America.

The Ontario Alternative Budget Working Group points out that overall capital spending on basic infrastructure, such as roads, schools, colleges and clinics, has been cut in half. Our investment in our collective future has dropped from 1.2% of gross domestic product in 1995 to less than 0.5% in 2000.

The real tragedy of six years of Tory service cuts, privatization and underinvestment is that overall government spending has actually increased. It's amazing. I can guess where it's gone but it sure hasn't gone into services for people. Despite deep cuts to public sector employment, despite closed hospitals and children crowded into portables, overall spending has increased. It's quite incredible. What have we gained as a society from this redirected spending? We know the government spent $3 billion to $4 billion they didn't plan on their botched hospital restructuring. And we don't know what the final bill for Ontario Hydro's restructuring will be.

It's time that public funds were used to improve our real competitive advantage, our quality of life, not just to fix the problems this government has caused. We believe that quality-of-life issues will become more and more prominent in Ontario in the coming years. This is especially true as we move to a high-skill, high-wage economy.

These fabricated crises in public services affect the quality of life we enjoy in Ontario and, in turn, this undermines our economic future. It's time for real leadership. Past mistakes cannot be explained away with yet another round of tax cuts.

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Like the rest of the world, Ontario will be affected by the current downturn in the American economy. That much is certain. However, it is not at all certain that the current provincial government will take the necessary steps to protect public services from this downturn.

There's an old piece of advice that I must share with the government members of the committee: beware the man who marries his generation; he may become a widow in the next. I could explain that to you after, if you like.

In 1995, the Conservatives brilliantly captured the angry mood of the public. In 1999, the Conservatives were re-elected on the basis of the economic growth that they were fortunate enough to ride.

The coming years may well be quite different from the last six, and I urge the government to rethink its strategy accordingly. So far, Ontario has simply not been competitive in the vision department.

Thank you very much. I'll be pleased to answer any questions.

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

Mr Galt: Thank you very much for your presentation. As I read through it, I guess you're kind of undecided how you would vote in the next provincial election. Sorry.

Ms Casselman: I've never been undecided when I get to a ballot box.

Mr Galt: Just looking at it, it's obvious we haven't done anything right, from what I'm hearing from you.

We have invested tremendously in health care, for example. The year before we took office, health care spending was at $17.4 billion. The first year we were in, it was $17.6 billion, and now we're well over $22 billion. That was our commitment in 1999. We've increased in education. We have looked at trying to improve efficiencies of the government in many, many different areas. You may not necessarily agree with the direction we've taken. I detected that from your presentation. But when I first started here in 1995 I had no problem driving into Toronto. There was no such thing as gridlock. We now have net in Ontario 844,000 new jobs out there, goods being delivered to people who have those extra jobs-quite a change in Ontario. When I went to the shopping malls in my area, I could park pretty close to the stores. Now I have to park out on the far edge of those parking lots. You may reflect that that's all connected with the American good times.

But I sit back and look, why in BC did they come along in the early 1990s, and now, starting in the mid-1990s to late 1990s, they started to crash? You may say, "The Asian flu." No, that happened ahead of the Asian flu. Why did we sit where we were, losing some 20,000 net jobs up until 1995, and then all of a sudden in 1996 things started to go ahead?

The previous delegation that was here, representing the restaurant association, indicated the advantage for them to get on and get more customers coming in so as to have that extra disposable income. There are just so many things that have happened right in the last almost six years. Yes, I hear what you're saying, and yes, there have been some people laid off in the public service. But I believe in what our government has been doing. Ontario has gone ahead a long way during that period of time.

Ms Casselman: And your question was, what do I think of all that?

Mr Galt: I'm just making a statement.

Ms Casselman: In response to your statement, I have a question back. You commissioned the health care restructuring commission to look at health care in Ontario. One of the strident recommendations of the head of that commission was that you have to invest in community health care, you have to invest in home care. You've never done that. You have nurses who are paid much less than hospital nurses. First of all, you call nurses Hula Hoops and they leave the province. You've closed the facility that trains technicians who provide cancer treatment.

The former Minister of Health-which I never thought I'd call her-commissioned a study on how you properly fund home care. That study apparently calls for parity for those nurses in the home care system. I guess what you haven't grasped yet is that home care is provided under many roofs in this province. My understanding was that you wanted to close hospitals because you thought that you could get away with it with the private sector. But health care is provided under many roofs, and yet you haven't funded the rest of the system. So now you're having big problems because people are moving back into the hospitals because they can't get the services in the communities.

I drive into Toronto every day. What I'm more interested in are the potholes. You contracted out the services on the highways. But when you contracted out to those private companies, which were probably run by most of the friends of the Tory party, the contract you left with them is that they will fill potholes this big. But if the pothole is this big, then they get to charge you for everything-the drivers, the car, the equipment, the tar. So guess what? They don't fill the potholes when they're this big; they wait till they're this big. They charge Ontario citizens, through the government, an arm and a leg to get those things done.

So, yes, I do disagree with you. I completely disagree with you. I was talking to a young woman the other day. She said, "My husband and I don't have kids. We're sick and tired of paying taxes for education. What do you think of that?" I was actually in my dentist's chair at the time, so I took her hands out of my mouth and I said, "Well, I guess that depends on whether or not you want stupid people looking after you when you're old."

The Chair: With that, I'll move on to the opposition.

Mr Kwinter: Before I get into the substantive thing I want to talk to you about, I just want to make a couple of observations on your presentation. You say the tax-cut strategy is an ideological one and not a political one. That's the same thing. It is an ideological thing and not an economic thing. We've had many experts tell us, "Sure, tax cuts are great, but they really haven't had a great impact on what's happening in the economy. There are other, outside forces that have done that. We have been the beneficiary of what's happening in the United States." Just as a suggestion.

The other thing, of course, that really sticks out is when you say the government has added about $80 billion to the provincial debt since 1995. The total provincial debt right now is only $114 billion, and about $100 billion of that was already in place when the government came into office. So the increase has certainly not been $80 billion. I don't know where that number came from, but that number just doesn't make any sense. They say the total debt of the province of Ontario is about $114 billion, so we can't have an increase of $80 billion in five years when I know that when the NDP left, it was in the $100-billion range. I can't remember the exact numbers. I'm just pointing that out.

What I'd really like to talk about is the announcement that was made by the Premier yesterday that he is planning to cut some more public service jobs. I want to tie that in with the situation you've raised, and I think it's a very valid one. When Mike Harris was campaigning in 1994, he said in Windsor that he was going to cut out the casinos because "We don't have a revenue problem; we have an expenditure problem." We had someone appear before us the other day and say exactly the same thing, that we don't have a revenue problem; we have an expenditure problem. Yet this government has taken the expenditures of the province of Ontario to the highest levels ever. Just to sustain that is going to be very difficult if there is, and there undoubtedly is, going to be an economic downturn. The only question is, how much?

My question to you is, what do you see as the impact of the Premier's announcement yesterday that he's going to continue with his tax cuts, he is going to ask all ministers to take a look at their programs? There will be no expansion in programming, but he's also going to cut the public service employees. What do you see as the scenario spinning out from that?

Ms Casselman: I think his comment was more that he's going to cut the bureaucracy. I know these folks won't want to hear it over here, because they'll never aspire to it, but I think he could probably get rid of all the ministers and the deputy ministers, since all the decisions are made in the Premier's office anyway. That would save us a lot of money.

You could cut the Premier's 35-person squad of OPP officers that ferret him around the province. You could certainly, in a very serious vein, cut the consultants. Look at the millions of dollars they're pouring into Andersen. They're just making money hand over fist.

I think Baird was embarrassed to actually have to admit that the welfare rolls went up, even though they were berating and beating those people down all the time.

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They're not interested in having a public service that provides public service, as we know. The main question back to the Premier, since he has told the ministers that if they want to increase spending in their areas, is, what in the Ministry of the Environment are you going to cut to hire back the people you know you shouldn't have cut before because seven people are dead? That's the question he has to answer. When is he going to learn that as a government he has a responsibility to ensure that the people of the province should be able to rely on public services.

Quite frankly, having public services available in communities, particularly in northern Ontario, provides an economic base which will attract industry to that community, because by having government jobs in those communities you will have dentists relocate there, you will have doctors relocate there, you will have people recognizing that there is a base that they can build on, and then you will have industry arrive as well. He's not interested in ensuring that the economy outside of the private sector economy is something that he wants to invest in in Ontario. I think we're seeing now with the US economy and the Auto Pact-whoever thought the Auto Pact would disappear?-all those kinds of things. Our society and our communities are going to be based on whatever happens on Bay Street or Wall Street.

Mr Christopherson: Thank you, Leah and Jordan, for your presentation. I also want to thank you, as I did the OFL president, for raising the issue of the Employment Standards Act, the refusal of the government to increase the minimum wage, and they have now introduced a push to go to a 60-hour workweek. We had no public hearings on it, and I think it's interesting that the only folks who have raised this so far are people who quite frankly aren't impacted by it because their members really don't rely on the Employment Standards Act; they rely on their collective agreements. I think it says a lot about the labour movement that they're here fighting for those vulnerable workers, in many cases, in the absence of the government doing it. So thank you for at least raising that.

I also want to pick up on where the government seems to be heading. We know, based on scenarios given to us yesterday, that this push to continue with the tax cuts is clearly going to put the government in a deficit position, deeper probably than we're already being told. I suspect there are revisions happening daily in the ministry. His answer to that, rather than back off the tax cuts and attempt to keep revenue up to keep us in a balanced-budget position, is now going to be to cut spending yet again. He's quoted as saying in the paper this morning, "If there is any increase in spending or any new programs, we expect those to be offset with savings in other areas."

We've had groups for two weeks straight who have come in here and pointed out key areas of our society and our economy that need more money and that tax cuts are not the answer for their getting the funding. Environment is an obvious one, and you raised that in your presentation; elementary schools, the secondary schools, colleges and universities. I have Mohawk College and McMaster University in my riding in Hamilton. Emergency rooms are still overcrowded, and Hamilton is facing just as big a crisis as every other community. We had the strikes in CCAC and VON in Hamilton as a result of lack of funding, and this is on the community care side of things, an announcement that the city council has to look at a 15% increase in sewer and water rates on the property tax because of the fiscal pressures of downloading on them, and now the government says that for every dime of pressure-this is what I'm going to read into this-that they're going to have to spend, you have to offset it with a cut somewhere else if you're the minister.

Given all these pressures, what I'd like you to articulate for us is a sense of, for instance in Hamilton, what the average family can expect if we start to get into hundreds of millions or even billions of dollars of further cuts. What's that going to do to the quality of life of the constituents in my riding in Hamilton?

Ms Casselman: First of all, there will be constituents in your riding who will be unemployed, and then looking for the 60-hour-a-week jobs with probably close to if not less than the minimum wage. There certainly will be more people in jail, so there will be more pressures on the Hamilton-Wentworth Detention Centre, those kinds of things, more things happening there. You'll probably see more Plastimets, more environmental hazards. If they're going to try to cover up their problems with Walkerton, I guess air quality will be cut while they're looking after water, because they don't think they have to look after it all. There won't be those inspectors to ensure that those places aren't there waiting to explode.

They talk about investing in the province, and then you look at what they're doing to education. Their idea of investing in post-secondary education is to give them money to build things. But ordinary people can't afford to send their kids any more, and the $200 isn't even going to buy them books, quite frankly. It really does come down to what kind of system you want.

In Hamilton, the hospital restructuring, yes, they're going to create a big monolith there, but as we're seeing with other situations, if it gets too big you can't run it. I didn't realize the answer was so simple on cancer treatment, because they've been decrying the fact that they're having to send people to the States, and here all they had to do was hire the people who are trained technicians and give them overtime and they could run the equipment at night, just like the private company is, established by the board of directors from Cancer Care Ontario. All the government had to do, until you reopen the college to train technicians so that you have them available in different locations to offer cancer treatment, was say to those folks who were working the dayshift, "Do you want to work some overtime?" and we would have that continued in the public system. It wouldn't be a matter of, "You only make $25,000 or $30,000 a year, and you have cancer? Get out of the way. I've got my platinum card here. I'm going in at night, and I'm getting mine done. You wait the seven, eight months," or the 14 weeks or whatever the backlog is now. If you don't have the money, you don't get the service. That's where we're headed, and you'll see more and more of that in every community across the province.

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

This committee will recess until 2 o'clock this afternoon.

The committee recessed from 1256 to 1358.

ONTARIO CAMPAIGN 2000

The Chair: Good afternoon, everyone. We'll bring the committee back to order. Our first presentation this afternoon is from Campaign 2000. I would ask the presenters to come forward and state your names for the record. On behalf of the committee, welcome.

Mr Pedro Barata: My name is Pedro Barata. I'm with Campaign 2000. With me are Lynne Russell and Casey Ready. I too would like to thank you for the opportunity to address the committee today.

Campaign 2000 is a national coalition of over 90 organizations that work toward the implementation of the 1989 House of Commons resolution to eliminate child poverty in Canada. In Ontario we have close to 40 organizations that are diverse and represent professional groups, community organizations, individuals and interfaith groups. For our presentation today I will begin, then I will pass the microphone to the other people who are here with me, and I will conclude with some recommendations and, hopefully, we'll have a chance to exchange some questions and answers.

The next provincial budget will be another opportunity to make choices and set priorities for the future of Ontario. In last year's budget, the government allocated $2.5 billion in tax cuts, with $1 billion benefiting the highest-income 10% of Ontarians. This one-sided approach to tax reductions is unlikely to make much of a difference for low-income families and their children. In the face of an impending economic slowdown, we urge the Ontario government to commit to an investment strategy that will establish a comprehensive social infrastructure for children and families in this province.

Governments can play a vital role in preventing social exclusion by providing families with the security and stability they need. Much research, including the Early Years Study commissioned by the Ontario government, has shown that a healthy start in life has a long-term impact on the well-being of children and, really, society as a whole. We know that children who live in poverty encounter more hurdles to healthy development and are at elevated risks for a wide range of negative outcomes to their health and well-being. The ability of children to progress through each stage of development depends upon the range of resources that are provided by their families, their communities and society as a whole.

An environment that nurtures inclusiveness requires the supply of good jobs that adequately support families. Families and children also have a right to income security, early childhood development services and child care, affordable, secure housing and accessible post-secondary education.

This past November we released a report card on child poverty in Ontario that shows that despite this period of growing prosperity, child poverty remains at near-recession levels. We found that even while the economy was running on all cylinders, almost one in five children remains poor. We also found there was a whopping 90% increase in the number of poor children in this province since the beginning of the decade. To keep that in perspective, that compares with a mere 28% increase in the rest of the country. While the child poverty rate in Ontario has declined 1.8% since the present government has come to power, the reality is that this decline ranks a mere sixth out of the 10 provinces in Canada. I refer to page 3 in the brief that we submitted to you. The chart in the middle compares the different declines across the country. Ontario's growing wealth is not creating opportunities for everyone. Since 1996, Ontario and Newfoundland were the only two provinces where low-income families fell deeper below the poverty line and, on average right now, low-income families live $9,900 below the poverty line.

The point we really want to get across to this committee today is that we know government investments can make a difference for children and families. A recent UNICEF report ranked Canada 17th out of 23 OECD nations in terms of addressing child poverty. UNICEF concluded that the difference between how different countries perform in terms of addressing child poverty is related to how each sets priorities. Most of the nations that fare better than Canada mitigate the negative impacts of unemployment, low wages and lone parenthood through substantial investments in comprehensive family policies, which include things like income security, generous unemployment benefits, affordable housing, as well as a range of early childhood development services.

To illustrate this point, in Ontario the child poverty rate fell from 24% to 17.5% after transfers such as the child tax benefit, the GST credit and employment insurance. But spending on public services as a percentage of the GDP has dropped 2.6% since the Tory government has come to power.

Campaign 2000's report card shows that there is a crumbling infrastructure of supports for children and families. We found reductions in school programs such as ESL and special education. We found that child care and early childhood development services are not widely available, nor affordable, and that in fact less than 10% of children under 10 have any access to regulated care. We also found that benefits and supports for families on social assistance continue to decline, and now families are receiving benefits that are 40% to 45% below the poverty line. As you all know, affordable housing is in short supply, with virtually no new rental housing starts, and rising rents right across this province. Tuition fees for post-secondary education have jumped 140% in the last decade, where students are now graduating with average debts of $25,000.

Yet we seem to hear the same answers, whether we ask why Ontario has the highest monthly fees for child care or why affordable housing waiting lists keep growing. The answers are invariably, "Our economy is growing," "We're creating jobs," and "We're cutting taxes." With over 470,000 children living in poverty in this province, we should be a bit more ambitious than this. This next budget is an opportunity to take steps toward addressing the situation.

Low-paying jobs make it difficult for families to make ends meet. We found that the number of children in poor families with full-time, full-year employment is a growing proportion of the total number of poor children. In general, tax cuts make little difference for families that have low incomes to begin with, and they also erode our capacity to invest in the kinds of programs children need. I refer you to page 6 of our brief for a comparison of how the tax cuts in the budget last May affect different income groups.

We call on our government to develop a more comprehensive approach to addressing child poverty, one that ensures we give children the best possible experiences during their formative years so that they may continue to flourish throughout their lives. To achieve this, our government needs to look beyond general tax cuts and must refocus on a social infrastructure for children that is based on quality services, affordable housing, income security and well-paying, secure jobs for families.

I will now pass the microphone to Lynne Russell from the Halton Social Planning Council. After that, Casey Ready will address the committee, and in the end I will provide you with some recommendations from our group.

Ms Lynne Russell: I'd like to thank the committee for letting us speak this afternoon. As Pedro mentioned, I'm from the Social Planning Council in the region of Halton. The Halton Social Planning Council is a community partner of Campaign 2000 along with many other partner organizations that produce a local report card on child poverty.

Many of Halton's families and individuals are affluent. In fact, the average annual family income in Halton is almost $80,000. However, many Halton families have incomes well below this average. In fact nearly 60% have incomes below that level. Of these families, 13% have annual incomes below $29,000.

I'd like to highlight some of the information we have in our report card on Halton. In the report card we use Statistics Canada's low-income cut-off as the definition of the poverty line. Using those figures, in Halton over 7,500 children aged zero to 14 and over 4,500 youth aged 15 to 24 are poor. This translates to 11% of all children and youth or one in 10. Children are poor because their families are poor. In Halton, over 7,000 families are poor, which translates to 8% of all families or 21% of all single-parent families. In addition, over 8,500 unattached or single individuals in our region are poor, which is approximately 30% of all unattached individuals.

Why are families poor? Poverty is a human construct. The way economic resources are distributed is not a function of unchangeable economic laws but rather of political-that is, human-choices. Many are poor because they do not have access to appropriate education and training. Many are poor because the only jobs available to them are temporary, part-time, low-skilled and low-paying. Many are poor because they are unable to work and have a physical or mental disability. Many are poor because government income support programs are inadequate to cover the basic cost of living. Many are poor because they have fled from abusive relationships.

I'd just like to give some information-some of it province-wide and some from Halton-about factors contributing to poverty. The minimum wage has been frozen at $6.85 an hour since 1995. In Halton, the Ontario Works caseload has fluctuated, with a current monthly figure of approximately 1,400 individuals. Although social assistance and employment insurance figures have decreased in the last few years, the number of families living in poverty in Halton has increased 80% over the last 10 years. Another contributing factor is the 1995 cutbacks of 22% to social assistance cheques. In Halton each month in 1999, an average of 3,280 parents, children and single people used one of the 11 food banks in our region, which is an average of approximately 1,200 families a month.

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Housing: The average Halton rent for a three-bedroom apartment has increased from $740 a month in 1989 to over $1,000 in 1999, and vacancy rates are under 1%. The housing authority and rent supplement waiting lists in our region increased from approximately 800 households a month to over 1,100 last year. The waiting list for subsidized housing can be as long as five years, and no social housing has been built in our region since 1994.

Some of the changes to programs for families and children include an increased use of emergency shelters in our region. One family per day was turned away from Halton Women's Place in 1999, and the number of calls to the Halton Rape Crisis Centre increased from 50 in 1989 to over 2,700 in 1999, without a funding increase. The average waiting list for subsidized child care in Halton has fluctuated since 1989, but the average figure last year was approximately over 400 cases a month waiting for child care.

Pedro has already talked about some of the policies and programs that we need to address poverty. I would like to bring to your attention the need for a national children's agenda. The Halton Social Planning Council recommends a full national children's agenda that includes job creation as a cornerstone to reducing child poverty. When families are working, the cost of living is more affordable and there is less pressure on the social safety network.

We need income security programs that prevent families from falling below the poverty line, and programs such as the national child tax benefit and employment insurance should be expanded to benefit all families. We need to reinvest and develop further education and employment training programs that reflect current and future labour market trends. We need to increase funding to provide more affordable and emergency housing and support programs. We also see a need for a continuum of child and youth development services for families and children.

We ask you to join us in calling for the right recipe for the well-being of all Canada children.

I would like to pass it over to Casey now.

Ms Casey Ready: Thank you for the opportunity to speak today. My name is Casey Ready, and I'm the executive director of the Peterborough Social Planning Council. The council is a partner member of Campaign 2000.

The Peterborough Social Planning Council covers an area of approximately 122,000 people. There are 70,000 people in the city of Peterborough and approximately 52,000 in the county. For those of you who have had an opportunity to visit it, you will recognize it as a lovely community in the Kawartha area of the province. However, our community is facing the same types of challenges felt across the province, with growing poverty rates, growing depths of poverty and an increasing gap between the well off and the poor.

Poverty rates in the city of Peterborough have exceeded province-wide averages. Many of the factors contributing to the high poverty levels and an increasing depth of poverty in Peterborough are the same as those contributing to poverty across the province. They are: reductions in social assistance rates, a tightening in eligibility for social assistance, the lack of increase in the minimum wage and the clawback of the national child tax benefit supplement from families on social assistance.

One of the indicators of poverty has been the number of individuals and families that are homeless or housing insecure. Surprisingly, and sadly, homelessness is increasingly visible in Peterborough. A study completed last year by ONPHA, the Ontario Non-Profit Housing Association, found Peterborough city to have the highest rates of affordability issues of 21 communities across the province, including Toronto, Ottawa and Hamilton. We had 28% of tenants-roughly 3,000 tenants-paying over 50% of their gross income on rent, and 55% paying over 30% of their gross income on rent. Rents are somewhat lower in Peterborough than in the GTA, but the income difference is much greater. The incomes are lower. Tenants are squeezed between dwindling supplies of new rental housing, increasing rents and decreasing incomes.

In response to the growing alarm with the magnitude and urgency of local housing needs, the Social Planning Council, in partnership with a number of other organizations, conducted a study last year of 206 households, representing over 500 people, in relation to housing and security. I've brought copies for the committee. The report is titled A Crisis of Affordability: A Study of Homelessness and Housing Insecurity in Peterborough City and County.

I would like to share with you some of the findings that relate to a picture of the stresses that are facing families and individuals. These might be seen as stresses in a typical small town in Ontario.

First of all, we chose to do our research on a sample that represented low-income people so that we could better understand the situations of groups and subgroups who were at risk of homelessness. Today I will comment mainly on the families and children in that sample.

Two hundred and six households were interviewed, including 50 adults and 18 children who were homeless at the time of the interview. Of the people who were homeless when interviewed, one in four was employed and one in 10 of the people who were homeless was employed full-time. The households with children experienced a greater degree of housing instability, with higher rates of frequent moves, and were more likely to have been homeless in the past three years than households without children.

Lone-parent families also faced problems with the quality of their housing and greater barriers to finding and maintaining safe, secure and affordable housing. This was due in part to discriminatory treatment by landlords. Households with children were two times as likely to report discrimination as were households without children. Our study demonstrates that homelessness and housing insecurity is not just a big-city problem and that there is a link between housing insecurity and food insecurity.

Some quotes from people interviewed included:

"All our money goes on food and rent. Mom has," only "$40 of her cheque left to buy food."

"People have jobs but they don't," have enough to pay "for the cost of living."

"I find" in "Peterborough that the housing cost is quite high and utilities costs are out of control. Why is the rent so high here, when there is no work?"

"Minimum wage hardly reflects what we have to cope with these days."

Our organization works with an extremely broad range of local groups: government bodies, social services and health agencies, planning groups, grassroots organizations and individuals. We daily hear the impact of poverty on the lives of individuals, families and children. I want to share with you some of the stories I've heard recently.

One agency that works directly in housing support has found that there are as many people, both individuals and families, homeless in one month as there were five years ago in a year. This month there were five families with children who were literally homeless. Last Friday there were two mothers who arrived and had had no food for a full week for their children. One family had three children and the other family had two children. There are now 50 applications waiting for their emergency fund program. There's a major issue this year, in the winter, of the ability to pay for heat.

More local agencies are needing to offer food to their clients as they provide service. People, especially those coming with children, are hungry, and providing food makes them able to concentrate on the services provided. One agency that offers a collective kitchen has noted a major increase in both the numbers of people attending and that there's never any food left at the end of the programs.

Schools and teachers are increasingly finding the need to get food and warm clothing to children. We have 10 food banks in Peterborough. One in 10 in our area serves an average of 850 to 900 children per month, and that's 100 to 150 more than were served by the same group two years ago. That was an increase of 12% to 21%.

I've brought copies of the report. I hope you'll read them, especially noting pages 24 to 28, where the solutions that were recommended by the people who were interviewed are noted. It's not surprising that the two top solutions that were recommended had to do with the issues of supply of housing and adequacy of income, two areas where the provincial government has the opportunity to make a big impact.

Peterborough is also becoming known for its innovative responses to homelessness and housing insecurity. If there is time permitting later, I would like to share information with you on these innovative responses.

Pedro will be speaking now on a number of needed solutions, and I hope you will use the power that you have to implement these solutions.

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Mr Barata: Thank you, Casey. I think what my colleague's presentation shows is that we have a child poverty issue right across this province that's not by any means isolated in our major urban centres. We've developed a set of recommendations in consultation with our partners right across this province and I'd like to share those with you.

We urge that the Ontario government commit to work with the federal government to implement policies that promote a more inclusive society. Campaign 2000 calls on the provincial government to commit a sizable portion of its projected surpluses and existing resources toward making a real difference for families and children.

In order to fulfill its promises to children, the government needs to take immediate action by shifting its strategy away from a one-sided approach to tax cuts. Children and families require new investments in income security, early childhood development services and child care, housing, education and a strategy to increase the number of good jobs.

We are recommending that the Ontario government take immediate action on the recommendation of the Mustard and McCain Early Years Study to ensure a comprehensive range of early childhood development services is available for all children and their families in Ontario by 2004. A comprehensive system of early childhood development services must include quality licensed child care, pre- and postnatal care services and supports to communities and families. The Ontario government has a real window of opportunity here and it should at least match the $840 million that were just announced by the federal government toward early childhood development services. There's been virtually no announcement or consultation on this matter.

The Ontario government should also rectify the current lack of income security among families across the province. This includes ensuring that families on social assistance and the working poor receive benefits and supports that prevent them from falling into poverty. It also includes an end to the practice of deducting the amount families receive from the national child tax benefit from their social assistance cheques, the so-called clawback, which I'm sure you've heard about from other groups throughout your tenure on this committee.

The Ontario government should also work with federal government to set targets and provide funding and incentives to increase the amount of affordable rental housing and supportive housing. Specifically, the province should have an annual target for at least 16,000 new, affordable rental units and should allocate at least $265 million annually to share the cost of meeting this target.

The Ontario government should also increase the supply of good jobs with better wages and increased protection from job losses. The government should start by increasing the role of the public sector, providing meaningful training and increasing the minimum wage to reflect the actual costs of raising a family. The government should also ensure that the labour code protects parents from the possibility of being forced to work 60-hour weeks.

The Ontario government should also ensure that all children get the best possible education throughout their life cycle by providing adequate funding for the elementary and secondary school systems.

Finally, the Ontario government should work with the federal government to freeze and lower tuition fees by increasing investments to colleges and universities.

I believe we have about seven minutes left and I'd like to open that up for questions.

The Chair: According to my watch, we have about four minutes left. I'll allow one minute per caucus.

Mr Kwinter: Thank you very much for your presentation. Anyone who wants can answer this question, because I'm only going to have a chance to ask one question. We keep hearing that the people who are on social assistance or welfare are going off the rolls. The government makes a big thing of periodically announcing that the welfare rolls have dropped dramatically, and yet you and other groups that come to us tell us that the situation is getting much worse, there's greater child poverty, there's greater homelessness, there are greater problems. How do you account for that? Is it just that they've made the eligibility tighter, or is there a whole new subculture that's growing?

Mr Barata: I know that a recent report by the city of Toronto shows that although there were people cycling in and out of social assistance, there's a core group of lone-support parents who, because they lack support such as child care, are unable to essentially get out of social assistance. As cost-of-living increases have not been built into the amount that social assistance pays, obviously those families are under strain. What we do find is that although child poverty is not rising off the charts over the past five years, it has certainly been at consistently high levels throughout the past five years. At the same time, housing costs keep going up, the cost of living keeps going up and the minimum wage stays the same. So even those families that are working are still no better off.

What we find is that although people are coming off the welfare rolls, there's an inverse relationship where there are more and more working poor families. If you map this out on a chart, it's almost like a cross. You find there's a declining social assistance roll and that there are more and more working-poor families. I think the lack of supports and the fact that the minimum wage has been frozen since 1995 and housing costs have continued to go up accounts for why families are no better off, despite the supposed economic prosperity. I don't know if anybody has anything-

The Chair: Thank you. We'll go to Mr Christopherson.

Mr Christopherson: Thank you for your presentation. I'm from the neighbouring community in Hamilton and we always looked at Halton as being the rich folks, so if it's showing itself there, then I think it should be a wake-up call.

As we draw to a close of these hearings-after this afternoon, we're finished-there really are two Ontarios that have been coming in here. One is the Ontario that has benefited from the Harris cut-taxes, cut-spending, shrink-government agenda-and that's a very small elite-and then there's this huge whack of people who have seen their quality of life diminish, their children's education diminish, the health system that's available to them. They're beginning to catch on that there's a link between this agenda that says everybody is doing really well and the way they see their quality of life sliding. Then there are those who are already in poverty or have been pushed into poverty who, I suspect from the outset, clearly saw this when they got whacked with a 22% cut in their income. It still, to this day, six years later, boggles my mind that that happened in Ontario and that there wasn't rioting in the streets, that you could actually take the poorest of the poor and cut their income by 22%.

Some of these Tories wanted a 42% increase in their own wages. They've given their own staff 25% to 30%, and it may be justified in some cases; maybe it was warranted on an individual basis. If you suggested that the people that work for them take a 22% decrease, they'd go out of their minds, yet those who are in poverty are expected to accept that and everything else.

I don't know if there's any time left, but I just want to say to you that there are clearly two Ontarios: there are those who are winning big-time and then there's everybody else, and everybody else is sliding further and further behind.

The Chair: Go ahead for a quick response.

Mr Barata: Not only were social assistance rates cut; at this point there are actually programs for the working poor being funded strictly out of the incomes of families on social assistance. The federal government provides a national child tax benefit to families on social assistance, which is clawed back dollar for dollar from social assistance cheques and then is reinvested under a new provincial program for working-poor families. Certainly the stories go on and on. It's just another example of how there is a real lack of vision at times for programs for the least well-off.

Mrs Molinari: Thank you very much for your presentation. You have just talked about the national child tax benefit, and, in fact, we have reinvested that $100 million into the Ontario child care supplement for working families, as you've indicated. That brings the value up to $200 million. Also, Ontario's promise is to get organizations working together. There have been a number of initiatives that have been put forward: the early years challenge fund; the Ontario Breakfast for Learning program; Healthy Babies, Healthy Children; and Better Beginnings, Better Futures. There are a number of programs that have been introduced and initiated to provide for some of the concerns you've expressed here.

Certainly we believe that in order for a government to continue to provide for those in vulnerable situations, we need to have a strong economy and we need to have the funds to be able to do that. In order to do that, you need a strong economy. You need to have the tax base; you need people working in jobs to be able to contribute to that. As much as we have the same view on what we should be doing to assist those in vulnerable situations, we also have varying views on how to do that. As a government, we're looking at long-term benefits rather than short-term fixes. In order to have that long-term benefit, you need to, again, as I've stated, have the strong economy that continues so that there is money to be able to invest in all of the programs.

The Chair: I would ask you to wrap it up, please.

Mrs Molinari: Then I will just end by saying thank you for the work that you do and for the presentation that you've made here. It brings some of the issues to light. Certainly, we will consider it along with all the other presentations that come forth.

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

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REGISTERED NURSES ASSOCIATION OF ONTARIO

The Chair: Our next presentation is from the Registered Nurses Association of Ontario. I would ask the presenters to come forward and state their names for the record. On behalf of the committee, welcome. You have 30 minutes for your presentation this afternoon.

Mrs Doris Grinspun: Good afternoon. My name is Doris Grinspun. I am the executive director of the Registered Nurses Association of Ontario. I would like to also introduce my colleagues here: Kim Jarvi, who is the economic analyst of the Registered Nurses Association; and also my colleague Jacqueline Choiniere, who is the director of policy and research at the RNAO.

The RNAO is the professional organization for registered nurses who practise in all sectors across this province. RNAO's mandate is to advocate for healthy public policy and for the role of registered nurses. We welcome this opportunity to participate in the pre-budget consultation and to convey the views and recommendations of Ontario's registered nurses to the standing committee on finance and economic affairs.

Let me present to you some of the highlights from our written submission, which you have with you, I hope. We will first address health care issues in the broader sense, and then specific nursing issues.

Budgetary decisions impact the health of our population in a variety of direct and indirect ways. They set the fiscal and economic framework. The resulting policies have significant implications for a series of social and environmental factors that, in turn, have long been known to be critical to health status.

Health care is one determinant of health. Ontario residents, like all Canadians, are passionate about preserving equal access to necessary health care services-access that is based on need, rather than the ability to pay. Like most Canadians, registered nurses are passionate about these values. Public opinion remains loyal to this belief. Universal access to health care is not a new concept for registered nurses; it has long been a priority, both at the provincial and national levels.

There is another critical element in our support of a universal, accessible, publicly funded health care system, and that is, simply, that it works. Evidence continues to mount that public funding and not-for-profit delivery of health care are both more effective and efficient.

Access to appropriate health care is an important determinant of health, but it is not the only one. There is a tendency in our society to focus on curative health care as the most useful, critical tool for improving the health of the public. Yet research has well established a series of other important factors-factors that are often overlooked: absolute and relative poverty, which my previous colleagues spoke about; unemployment; stress; social support; social cohesion; and lifestyles. Public policy changes these policies for better or worse.

We cannot ignore the fact that a growing income disparity combined with the fraying of the social safety net greatly reduce the degree of cohesion in our society. We risk losing even more provincial cohesion if we continue to tolerate huge spreads of income and wealth and if we fail to reinvest in the social safety net. Those who have become increasingly marginalized have waited long enough.

Even the best health care system in the world, if it were combined with an inadequate social safety net, would still compromise the health of a significant portion of the population. In the long run, this would prove to be a very costly misallocation of resources. That's why we say, now is the time to invest for the future. In particular, it is the time to reinvest in those areas which have been hard hit by budget cutbacks and by private sector retrenchment-physical, human and social capital.

Over the past few years, provincial reinvestment in health care has served to slow the deterioration of the system. However, these reinvestments have failed to keep pace with population growth and inflation. In fact, spending in real terms fell by $115 per person between 1994 and 1995 and 1998 and 1999 once the figures were corrected for creative accounting. Real per capita spending on health care by the province fell every year in this period.

Nurses believe that financial reinvestment alone will not solve our health care system ailments. We must reinvest in programs that will lead to a solution of our problems instead of funding temporary solutions or quick fixes. For example, the repeated emergency room crises will be resolved only by reinvesting in programs such as primary health care, long-term care and home health care. The inability to discharge patients from hospital in a timely fashion will be resolved only by adequate levels of home care services. Appropriate bed utilization within our hospitals necessitates further development also of our long-term care facility sector. In our submission we have presented an analysis of current budgetary constraints.

In summary, we know that the immediate economic future, although uncertain, has something clear-uncertainty-and thus we need to prepare for it. Most people expect the economy to slow and tax revenues to decline in tandem. There is little room for government to cut expenditures, as they have already fallen in real per capita terns by 7.3% over six years. Indeed, there is considerable need for government to reinvest in neglected areas of physical, human and social capital.

This raises the issue of tax cuts. We know that the government has spoken of cutting taxes further than they have done so already. If fully implemented, however, it is our estimate that these costs could be as high as $9 billion for the treasury. Given the prospect of declining revenues and a need for more spending, the slim budgetary surplus could quickly turn into a large deficit. It is with this in mind that we recommend strongly against implementing further tax cuts at this time.

This is not to say, however, that we should not change the way we collect taxes. It is desirable that taxes be as efficient as possible and distort correct prices as little as possible. Taxes that correct for market imperfections will be desirable. For example, the market over-provides environmental destruction and harmful substances. Green taxes, for example, and tobacco taxes could both help to correct under-pricing of harmful activities. Federal taxes on short-term destabilizing financial flows are another example of this type of tax.

These corrective taxes would serve two functions. They would reduce the harmful activity and they would raise government revenues for programs that already deal with the consequences of the remaining activity, for example, treatment of lung cancer and heart disease.

There is also greater fairness in using these taxes, in that it is the sinner who pays for harmful activity. Whether these taxes are raised at the federal or provincial level, the provinces would seem to have some moral claim on a portion of them since they deliver the remediation services.

RNAO recommends that the government refrain from tax cuts until it designs other sustainable tax revenue measures to replace the revenue forgone. At this point in the business cycle, forgoing tax revenue is, in our view, inappropriate and fiscally irresponsible. On the same grounds, we urge the province not to push the federal government for large tax cuts at this time.

RNAO also recommends that the government move to increase taxes for those industries and products that are detrimental to health. We mention green taxes and increased tobacco and gasoline taxes as examples.

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We also want to leave you with a clear message about privatization. With respect to health care, the economics are very clear: public funding not only guarantees universal access and better quality, but it is also the cheapest way to fund health care. Research overwhelmingly shows that public funding and not-for-profit delivery of health care services is cheaper and of better quality than for-profit provision.

The major nursing organizations in this province have already publicly declared their concern about the increased privatization of health care in Ontario and Canada. Ontario is leading in that trend. This is a particular problem in the areas of home care and long-term care.

We also have growing concerns about privatization in the hospital sector. These concerns are about both cost and quality. Quality in health care has long been recognized as a problem in for-profit provision, because it is very difficult to monitor. For-profit providers have a perverse incentive to cut corners on those components of care that are difficult to monitor.

We are alarmed over the government's move to fund a for-profit agency to deliver radiation therapy in hospitals. We are concerned not only about the potential for greater costs, but also the risk of bleeding health care professionals from the public and not-for-profit sectors. We are also alarmed about recent statements by the Premier and our new minister that the government is encouraging greater privatization within the health care system. We believe if we continue this trend, it will cost both in money and in quality, and also in moral terms and social cohesion.

RNAO repeats the call made last year by the major nursing organizations across Ontario for a moratorium on privatization of health care services in this province. RNAO calls upon the government to recommit itself to the principles of the Canada Health Act, which are very clearly stated in the Blueprint and in the throne speech, and to publicly reject movement to an American-style privatized health care system. RNAO joins the Premier and the opposition parties in their request for a full audit of the decision by Cancer Care Ontario to pay a private company to run an after-hours radiation clinic at Sunnybrook hospital.

Having the right infrastructure is essential to economic sustainability and prosperity. The market tends to under-provide certain infrastructure-for example, transportation networks, schools, hospitals, water treatment facilities etc-because the market cannot generate appropriate incentives. Governments have traditionally had to step in to fill the gap.

Government cutbacks and private sector restraint have resulted in a decaying of this infrastructure, to the detriment of the productivity of our society. When governments correct for the under-provision of infrastructure, they are engaging in market-friendly activity. So long as it is done efficiently, most sectors in the economy welcome this activity. It is long overdue for provincial governments to start to address the erosion of infrastructure in a serious way.

Long-term-care commitments were made in the 1999 Ontario Progressive Conservative Blueprint to raise health care spending by 20% over five years. Furthermore, the government struck a task force to obtain recommendations on the major component of health care delivery: nurses. It accepted all of the task force's recommendations and established the implementation process which all nurses are monitoring currently closely. It has been gratifying to witness the evident desire of Ministry of Health officials to successfully implement these recommendations. I would like, on this note, to commend Minister Witmer for her personal commitment to the nursing profession within the nursing task force recommendations, and the Premier.

I would like to speak now specifically about our profession. The RNAO is gratified to know that in poll after poll the public is solidly supportive of a publicly funded, not-for-profit delivered health care system and that nurses are seen as the most trusted of all health care professions. This has been the case not just lately but for the last five years. These public opinion barometers have consistently identified nurses as having the greatest influence on the day-to-day quality of care. My colleague from OHA who I saw sitting here knows that's the case, and we should take that seriously because detriments to the nursing profession impact on how the public perceives health care.

However, many of these surveys have also identified growing public concern about health care issues along with a keen desire to maintain this most cherished of public services. Also evident in these surveys is the high degree of concern about nurses' work circumstances. Opinions include concern that nurses are overworked, along with support for enhanced and dedicated funding for the nursing profession. RNAO acknowledges the concern and support of the public on these issues and we suggest that their opinions lend great urgency to our message today.

We would like to acknowledge the actions taken thus far by government in addressing the concerns of nurses. The reinvestments that have been made constitute a positive step. Recent College of Nurses data-and this may be news for all of you-indicate that nursing employment increased by over 5,500 positions, both RNs and RPNs together, over 1999 figures. While this is good news, we remain far short of our target of 12,000 new positions by the end of 2000.

However, nurses continue to report workloads that are frequently unsafe and unbearable, frustration and a sense of powerlessness over the inability to enact best practices due to lack of time, and anger over working conditions and the prevalence of casual employment, which both causes insecurity and makes it harder to deliver continuous quality care to patients and clients. Having to deal with improper equipment and a decline in the availability of materials used to provide care is another concern that nurses continue to mention.

The competitive bidding home care sector process has also created frustration, fear, and insecurity of employment, and is making nurses leave the home health care sector in favour of the hospital sector.

We know these circumstances continue to drive many nurses out of the province, out of the country, or out of nursing altogether. Tomorrow morning we will be addressing that issue at our press conference, which has some good news.

We need the government to continue to support the nursing profession, and together we need to continue to serve the people of Ontario. In the next section, I will provide specific recommendations about critical investments.

First of all, the labour market: the government has taken steps in the right direction with its commitment to hire 12,000 more nurses in permanent employment status. There are other important steps that are necessary in order to recruit nurses to positions that will enable them to provide needed care to the residents of Ontario.

The government must continue to flow earmarked funds, with clear accountability mechanisms. Those mechanisms were not in place previously, and we urge you to put them in place until the RN-population ratio is comparable to the rest of Canada. As you know, we have the lowest nurse-per-population ratio in the country here in Ontario.

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We urge the government to flow funds to health care agencies in a manner that will facilitate long-term planning of health care delivery. This is true for the hospital sector, this is true for the long-term-care sector, and this is especially true in the home care sector.

We commend the government for sponsoring career days and job fairs. These have proven to be most successful in matching nurses with employers, and indeed we have matched thousands of them. We are heading on Monday to Texas to bring our Ontario nurses back home. We urge the government to continue to fund this and other important recruitment initiatives.

Let me talk for a bit about the work practice environment. Along with recruitment initiatives, we must focus on initiatives that will keep nurses in our province, those who are currently here, and not continue to bleed them to other countries. The work environment difficulties experienced by nurses in all sectors include: replacement by unregulated care providers; a move to part-time and casual employment; a move to temporary contract positions; poor staffing patterns in the context of increased patient acuity; and funding that does not keep pace with need.

In that sense, let me give you a touch of the latest research that is coming from the management literature in relationship to what is called contingent workers or contingency work, which was initiated in the US under the impression that it would cost less and provide as good quality care, and efficient care, because you didn't have the benefits etc. The latest in the research is that it is actually costing more and that people are losing their commitment, their contract with the organizations, their motivation, and therefore their productivity. So that's important to keep in mind.

Also, too many of our nursing professionals are curtailed in practising to their full scope of practice by outdated and inefficient regulations.

Wage disparities between the community and hospital sectors are a substantive barrier to ensuring efficient utilization of the home care and hospital care sectors. Basically, hospitals cannot discharge patients because they don't have sufficient nurses in the home care sector. Nurses are escaping that sector to go to the hospital sector because they are better paid, simply said. Nurses working in the community face wages that are 20% to 25% lower than their colleagues in the hospital sector. So the recipe is there for them to move from one sector to another, regardless that it may be better clinically for them to stay in the home care sector. This is causing severe recruitment and retention problems and poor continuity of care in the home care sector. In turn, it is affecting the ability of hospitals to discharge patients in a safe and timely manner, since community services are often not available, not just on weekends and holidays, as it used to be a year ago, but actually in the middle of the week now.

The situation of nurse practitioners requires particular attention. The government has taken the important step of recognizing their extended scope of practice and funding some positions. We urge the government to follow the commitment in the Blueprint to aggressively put more nurse practitioners across the continuum of care. We are asking for funding for 200 nurse practitioners who are currently either unemployed or underemployed and are at risk of losing their certification with the College of Nurses. We trained them-you paid for it-but we may lose them because the funding is not there.

I think I will stop. The recommendations are very clear. We are asking for mechanisms to fund the various health care sectors so that they can have more full-time nurses. We have recommended that 70% of the nursing workforce be on a full-time basis. Then you will decrease the need for so many more nurses and you will also increase their retention.

We are also asking for the 200 nurse practitioners who are unemployed or underemployed to be fully funded, rather than the 75 that the expert panel is recommending for the year, because you are going to lose the remaining 125. In fact, some of them are already moving to Saskatchewan and other places.

We are also asking for continuing funding for the best-practice guidelines. We commend the foresight of funding that initiative.

We are asking for one-time funding to develop, evaluate and test orientation prototypes in the hospital sector and in the home care sector.

We are asking for one-time funding of $1 million to develop a pilot test to evaluate teaching units, with clear criteria for RFP, which will provide a perfect venue across the province to create positive work environments and merge the best of senior nurses with the newly graduating baccalaureate nurses.

I will stop.

The Chair: With that, unfortunately, we have run out of time for questions. On behalf of the committee, I thank you very much for your presentation this afternoon.

ONTARIO LONG TERM CARE ASSOCIATION

The Chair: Our next presentation is from the Ontario Long Term Care Association. I would ask the presenters to come forward and state their names for the record. On behalf of the committee, welcome. You have 30 minutes for your presentation this afternoon. You may proceed whenever you're ready.

Ms Vida Vaitonis: Thank you for inviting us here today. My name is Vida Vaitonis. I am executive director of the Ontario Long Term Care Association. With me are David Cutler and Fraser Wilson, members of the board of the association.

We represent 330 of Ontario's long-term-care facilities, including private, not-for-profit, charitable and municipal organizations. The homes we represent provide care and accommodation for more than 32,000 people. An equal number of staff work in these facilities.

The entire long-term-care facility system in Ontario includes 498 homes that care for approximately 57,000 people. OLTCA members thus account for roughly 66% of Ontario's facilities and 56% of residents. Much of the system's remainder is made up of homes represented by the Ontario Association of Non-Profit Homes and Services for Seniors.

Founded in 1959, OLTCA was originally known as Associated Nursing Homes Inc of Ontario, and later as the Ontario Nursing Home Association. Nursing homes have a long and honourable record of partnership with the government of Ontario. For decades, our members have worked closely with the Ministry of Health and Long-Term Care, as it is now known, to ensure that Ontarians who need facility care can get it at a reasonable cost to themselves and to the system.

For the benefit of the new faces on the committee, let me explain just the basic facts about how our sector works.

While long-term-care facilities can be privately owned or operated by a municipality or a charity, all facilities operate under the same regulations within very tight governmental control. Government financing drives our capital budgets. If we want to expand or upgrade, we face a complicated ministry approval process. The government sets our operating revenues as well. The ministry grants our homes approximately $55 per resident per day for nursing and programs. Residents pay approximately an additional $43 for accommodation services, a rate set by the government. Preferred accommodation is offered to them for up to $18 per day, but the government sets the rate and the proportion of preferred accommodation that facilities can offer. The amount of physical space we offer residents, the level of care they receive, the number of food service workers, the content of meals: each and every one of these factors is closely controlled by government rules and funding mechanisms.

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Let me tell you why we're here today. We are here because people are expecting us to play an expanded role as lynchpin of the health system, and we have some challenges to meet if we're going to fulfill that role.

Let me explain. We all know that our society is aging. Elderly people and those with disabilities need care, and there are only three ways to deliver it to them: in their homes, in hospitals, or in long-term-care facilities. Hospitals cost too much to be delivering long-term care-sometimes up to $800 per day-and are really designed to deal with acute medical cases, not the type of care required by people who are simply aging or disabled and are unable to care for themselves. For this reason, hospitals are a very inefficient and inappropriate means of caring for our elderly, but often they have been the only recourse to which families can turn. As a result, we have the phenomenon that some refer to as "bed blocking," in which people who do not need acute care remain for extended and costly stays in hospitals while they wait for a long-term-care-facility bed. This creates a backlog at the hospital's front door-the emergency room.

By building a strong long-term-care sector, we can put an end to the so-called bed-blocking that exists today. A strong long-term-care system will also create places that will be filled as our population ages. We offer the means of both easing current system problems and meeting the brunt of future demand. This is what the government of Ontario recognized in April 1998, when it announced it would build 20,000 new beds over six years. As the Premier said at the time, "We are taking the necessary steps to build a health system that will meet the current and future needs of our growing and aging population, and ensure that Ontarians have access to the highest standard of long-term care.... This investment will strengthen community services for the elderly, improve the quality of life of people who live in nursing homes and homes for the aged, take pressure off hospitals and emergency rooms."

The Premier was right then and he's right now. A month ago, he affirmed that vision of a health system in transition in an interview with the Toronto Sun: "If you look in health care, the big challenges we faced were to keep pace, modernizing hospitals, long-term care. They were built on a 50-year model that every hospital had to do everything...." We want to play the role the Premier envisions for us. We are stepping up to the plate, bidding for the new beds, seeking financing from our bankers to carry our share of the costs and reconfiguring our business to fulfill this new mandate.

But building more beds isn't enough. We need the operating funding to make them better beds, to make them beds in which you would want your parent to live out his or her life, or one day to go into yourself, knowing you'll get the care you'll need. Right now, we all know that the level of care is not what we want it to be. It is below what I believe any of you would be comfortable with. And this problem is only going to get worse as our resident base ages and needs ever-increasing amounts of care: 10 years ago, our average resident was 76 years old; they are now 86. The resident of tomorrow needs more hands-on care and that means we need more hands on deck.

We have been working closely with the Ministry of Health and Long-Term Care to try to define the current situation and to determine how much more is needed to bring care to an appropriate level based on current and future needs. Our belief is that the government will need to increase operating funding by between $500 million and $600 million over three years. This is what we will need to provide Ontarians with an acceptable level of care.

We are under no illusions regarding the magnitude of this request. We are well aware of the fiscal pressures that the government faces at this point in the business cycle. Why, you might ask, can't this wait a little longer? Well, the new beds are coming on stream. Demand is being stimulated. The public is knocking at our door. We will build the new beds you have asked us to build. But if we build it, they won't necessarily come-not without the appropriate level of care. As long as people feel comfortable accommodating loved ones in expensive hospitals or at home with insufficient resources, they will choose to do so. Patients will remain in expensive hospital settings, ultimately creating backlogs at the hospital front door-the emergency room.

Now is the time to prevent this kind of situation from occurring. Now is the time to work together and build a long-term-care system that can ease so-called bed-blocking and meet the challenge of an aging population. Demographic and medical pressures are mounting. Demand is increasing. Inflation and other cost increases have taken their toll. You have asked us to play an expanded role. We are excited about playing that role, and excited about working with a new Minister of Health and Long-Term Care. We are excited about the kind of system we can build if we can get the operating funding we need.

The issue here is not beds; it's level of care. The issue here is not wages; it's the level of service. The issue is not the past; it's the future. The issue here is not whether, but when, and the answer is right now. We want desperately to fulfill the role Premier Harris has set out for us. We are working intensively with ministry officials to find a way to get these needed funds into our system. We are taking our message to MPPs, cabinet ministers and central agencies. We seek not to threaten or shame the government into action, but we must deal with this issue now.

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

Mr Christopherson: Certainly, no matter where on the continuum of health care, we see enormous pressures. We've heard from virtually all of them. You will know from the morning paper that the Premier was quoted yesterday as saying that they are planning to ratchet down spending rather than back off on the tax cuts in order to try to offset the downturn to maintain a balanced budget. There are so many pressures in the health care system, one has to wonder where there aren't pressures for increase.

But if you take the Premier at his word, then what he's saying is in the health ministry, like every other ministry, where you're responding to population pressures, cost pressures, aging population pressures, whatever those legitimate built-in pressures are that are forcing increases in the Ministry of Health, without expanding, just to meet the current demand, in order that everywhere that that's happening, if the minister chooses to go that way, there has to be a corresponding cut.

One would assume normally when you make that kind of statement that you're going to increase in a strategic area and then cut in an area, hopefully, that won't have any impact, either through re-engineering your services, new technology, something that would render it non-harmful to the public. I've got to tell you, when it comes to the key areas that are affecting us right now-whether it's environmental protection, social services, health care or education-I can't imagine where those offsetting positions are. Assuming that they go full ahead in this direction and attempt to meet needs in the health ministry, where, in your opinion, in the continuum of health care, can the ministry afford to cut in order to put in new?

Ms Vaitonis: Our position and our mandate is to identify the needs. Our issue and our mandate is not to find the dollars within the health system. We know that there are tremendous pressures on all fronts. Our job in coming here today is to identify the areas that we feel are most pressing in the long-term-care field, and we've tried to identify the amounts that are going to be needed over the years to come.

Mr Christopherson: I don't imagine anybody can answer that. I didn't expect you, really, to have an answer. I wanted to give you the chance, because if it's that obvious-often the Premier accuses the opposition of not seeing the obvious-maybe I'm missing the obvious. But I don't know where it is within the Ministry of Health budget, based on what we've heard for the last two weeks, that they can afford to cut if that's the price to pay to increase where we need it. Obviously, your needs are legitimate and so is every other point of contact along that continuum of care.

Whether we're talking the hospital sector-they were just in here this morning talking about the $400-million to $500-million pressure that's on them just to maintain-or through to the home care, where the wages are so out of whack that we can't attract nurses into that field and we can't keep them. I would argue a lot of that has to do with privatization and the managed competition which is forcing the price of nurses in that part of our continuum down. Nonetheless, at the end of the day, the only way the strike at the VON in Hamilton got resolved was that the ministry coughed up some more money so they could pay at least some of the wages that are due those nurses. Everywhere I look in the health care ministry, whether it's the emergency room and the ambulance end of it or providing the acute care on the ward, I don't know where they would possibly cut if they were to recognize, quite rightfully, that your area of the continuum of health care needs money and so does every other area.

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You've got to get your head around this: the world has changed from the day we said, "Come on in and see us," to the day you actually got here. When we started out the process we were up over 3% GDP expected, with a $1-billion surplus and a debate about where that's going to go, to now hanging on with our fingernails trying to figure out how this province is going to maintain the standard of living, as depressed as it is for some folks, at the same time the government is going to spend more money on more tax cuts and somehow magically that's going to solve all this.

I realize there's not really a question in there, but if you've got any thoughts-you're just showing up that whole vision that says to us we're in serious trouble. What we ought to be doing is backing away from the tax cuts and then making sure that whatever money is available is going into priorities like health care, because it's a good investment as well as being the right thing to do in our society.

Mr David Cutler: Mr Christopherson, all we can say is that we've identified this need. We don't know where the money is to come from, but it's our obligation to bring this to the attention of the government and we've done that.

Mr Christopherson: Absolutely. You've done an excellent job of that. Thank you.

Mrs Molinari: Thank you very much for your presentation. You've highlighted some of the concerns and issues around long-term care. Certainly as a government we've made some changes and initiatives to provide for some of the needs that are going to be emerging in the years to come, and one of them is of course the need for long-term care. The hospital restructuring committee in their review also made several recommendations, and as a government we have responded to a number of those. The creation of 20,000 new long-term-care beds is one area that we've responded to. Certainly there has been funding put in to also inspect some of the long-term-care beds throughout the province to ensure the quality, because you also indicated in your presentation that it's not only having the beds but being able to have quality service provided for those in that need.

In my riding the Reena Foundation has an elder home that's for the disabled elders and they provide an excellent service in long-term-care needs for their clients, certainly supported through various ministries provincially. They've also done a number of other initiatives that have given them accessibility to additional funds, either through fundraising or a number of other initiatives. It's an organization that I certainly talk about as often as I can and highlight the wonderful work they're doing in co-operation and in partnership with all of those that are responsible, because certainly we need to work together in any way we can to provide for those who need our help. Governments can't do it alone. It's not something that is the sole responsibility of the provincial government. Our view has always been that in order for a government to be able to assist those in need, we need to have a good economy, we need to have the funding in order to provide for that economy.

A number of presenters who have come forth in the last-I guess this is the eighth day, and there have been varying views on how to create that strong economy. One of our beliefs as a government is that tax cuts create the strong economy, create jobs, and the more jobs you have, the more people are paying taxes and the more money you have to invest in services like long-term care and a number of other social services.

Certainly some of your recommendations and some of your comments will be taken into consideration with all of the others that come forth, and I congratulate you on the work that you do with respect to this area. Thank you for taking the time to come and make the presentation here today. I know my colleague Doug Galt also has a question.

The Chair: Mr Galt, you have a minute and a half.

Mr Galt: Thank you for your presentation, bringing forward to us the amount to make this whole thing fly.

There's one player not at this table. You people are here, we're here as a province. The other player that is not here is the federal government. I'm wondering what your presentation would be like to them, because as it started out, the previous group wanted us to recommit to the Canada Health Act. I think the Ontario government is committed very much to the Canada Health Act, although it doesn't appear that the federal government is, because they've reduced from the 50% funding that was a commitment at the beginning of the act, when it was first proclaimed. At the end of the Conservative era it was down to 18%. I don't know when it slid before that, at what rate, but in 1993 it was at 18%, when Mulroney turned it over to Chrétien, and now it's gone to 7%. With great fanfare it came back up to 11%. What is your presentation like to the federal government when you go to their finance committee? What are you asking them to do?

Ms Vaitonis: In fact we don't normally go to the federal level since we are a provincial association. We haven't to date done so. Certainly funding from whatever source and whoever's responsibility it is needs to come forward and support the Canada Health Act altogether in all the care that's delivered throughout Canada. We're very much hoping that all the resources that are available, whether at the federal level or at the provincial level, will come forward to support the care that needs to be delivered.

Mrs McLeod: I won't waste the valuable time we have with you to debate over Mr Galt's statistics, but I do want to talk to you about the financial needs that you've set out for the long-term-care facilities in the province. I'm particularly sensitive to the plea that you're making, because we're in the midst of long-term-care forums across the province and we're hearing regularly from both family members of people in long-term-care facilities and from staff members about their concerns with quality of care. I have to tell you that every time somebody speaks to us they speak about the commitment that's been made by staff even though the staff are obviously working beyond their stress levels. It's staff who are saying that they are really concerned about the safety of their patients-not just quality of care but safety. That makes me very responsive to the plea that you've made here for more adequate funding for long-term care.

I wanted to ask you specifically, when you talk about $600 million, because you say over three years, is that an estimate for what you would need annually, so it's $200 million in each of three years, or is it $200 million accumulating as you add new beds to the system so that by the end of three years with new beds on stream the increased cost is $600 million?

Mr Fraser Wilson: Essentially what we've looked at is, we have costed out what we know, and what we know today is that 57,000 beds are in the system. What we have not done is anticipate the addition of the 20,000 new beds because we don't know exactly when they are going to come on stream and we want to look at it from that perspective. What we also know is that the day of large group activities is gone. With our residents, there is a far greater need for one-on-one programming because of behavioural challenges that come with cognitive impairment. As to how we stage the funds over a three-year period, we look forward to working with government to make that happen.

Mrs McLeod: So this is to improve quality of care for current residents without anticipating the new beds coming on stream.

Mr Wilson: That's correct.

Ms Vaitonis: The only caveat I would add to that is that it also allows us to step up to the new role that we need to undertake as the system unfolds and the reform takes place, where we take on more complex care.

Mrs McLeod: I was going to ask, is part of that new role and part of the need for increased funding for quality care because as chronic hospital beds are being shut down, with some reversals on that front, long-term-care facilities are being asked to undertake more complex care, such as psychogeriatrics and Alzheimer's patients, without having seen a corresponding increase in the level of support that you can provide?

Mr Wilson: That's correct. That takes us to a higher level of service to meet that complexity of care.

Mrs McLeod: Right. How many new beds have actually come on stream in the last three years since the 1998 announcement?

Ms Vaitonis: The first beds that were to have been built came out last fall.

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Mrs McLeod: As a successful bid but not actually up and running?

Ms Vaitonis: No, up and running actually, approximately 1,000 to date. We're predicting that this year a little more than 4,000 will come forward and the rest will very quickly flow after that.

Mrs McLeod: Have you had a corresponding per diem increase in your funding to accommodate all of those new individuals? Because we're now no longer talking about capital bids; we're talking about people in your institutions. Have you had a per diem increase or have you just had a constant change in the case mix index so that it shifts from facility to facility but the overall budget isn't actually increasing to take into account those 1,400 new beds?

Mr Cutler: We haven't as of yet had an increase. There's been no change in the per diem rate and there's no distinction between the old and the new facilities. The per diem funding based on your CMI is exactly the same.

Mrs McLeod: Has the total global funding for long-term care facilities increased by an amount commensurate with 1,400 new beds?

Mr Cutler: Yes, that has definitely increased.

Mrs McLeod: One of the concerns we hear, and you've touched on it, you've alluded to it in your brief, is that there are no longer minimum requirements in terms of minimum number of nursing hours and there's a real concern about having registered nurses on staff in adequate numbers. Is the funding you're proposing going to address that? Is that one of the issues that can be addressed?

Mr Cutler: Yes, that most definitely is one of the issues that will be addressed. We realize that we need to increase the mix of professional staffing to non-professional staffing so that they can take on the increased complexity and acuity of care level that's expected of us.

Mrs McLeod: My other question would be, how far beyond the minimums can you go? We were hearing concerns that minimum staffing is not in place because it's no longer in the act and it's no longer funded. But it seems to me we have to go far beyond that, if we're talking about a quality of care, to include things like non-nursing professionals, occupational therapists, physiotherapists, which are almost a dying breed in long-term-care facilities these days.

Ms Vaitonis: We believe that our projections in our document here address that need.

Mrs McLeod: Is it outlined anywhere, all the components of your request for the $600 million over three years?

Ms Vaitonis: We've worked within our association with the ministry on a variety of studies. There isn't one comprehensive overall study that we're able to share with you at this time, but we would be working toward something like that.

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

CANADIAN FEDERATION OF STUDENTS

The Chair: The next presentation is from the Canadian Federation of Students. I would ask the presenters to come forward and state your names for the record. On behalf of the committee, welcome. You have 30 minutes for your presentation this afternoon.

Ms Erin George: Thank you very much. My name is Erin George. I'm the Ontario chairperson for the Canadian Federation of Students. We represent 185,000 undergraduate, graduate and college students in Ontario and 400,000 across the country. With me today is our government relations and campaigns coordinator, Pam Frache.

We have a submission and what I would like to do is read parts of the submission and our recommendations, and then hopefully there will be time for questions at the end.

While there is a general acknowledgement of the growing importance of colleges and universities, this government's response has been to slash funding for higher education in an unprecedented way. For the 1996-97 school year alone, Ontario's colleges and universities lost $400 million in funding, a loss that translates in constant dollar terms to approximately a 17% cut. Since then, public funding for post-secondary education has been marginal. As it stands, this government's funding policy will ensure that Ontario's colleges and universities remain the worst-funded higher education facilities in the country today.

The impact of this financial situation for the quality of post-secondary education is all too evident. Most colleges and universities are now operating with diminished faculty and support staff complements. Hiring freezes and layoffs constitute the norm across the province. Class sizes have grown significantly, resulting in less interaction between students and their instructors, while educational choices have been sharply curtailed by a host of course and program cancellations. Libraries do not have the funds to maintain book holdings at needed levels. Building repairs cannot be made or are delayed, posing health and safety threats. Equipment is out of date.

Underfunding has also impeded co-operation among institutions and created an unhealthy turf environment in which institutions point fingers at one another in their efforts to minimize the impact of funding cuts on their particular institutions.

Cuts to public funding of post-secondary education have also resulted in institutions depending more and more on alternative sources of revenue. Institutions have sought, and the government has approved, massive tuition fee increases. In addition, Ontario's colleges and universities must now rely heavily on corporate generosity in order to remain viable. However, such reliance comes at a price. In return for funding, corporations are demanding a greater say in the day-to-day business of our colleges and universities and dictating policy decisions regarding curriculum. With alarming frequency, we are seeing pockets of our public institutions being privatized and funds going toward financing what amount to job training programs for the private sector.

Relying on private sector funding to fill the core funding gap left by government cuts sets a dangerous precedent. Private sector funding is neither stable nor comprehensive, since it is often of a short-term nature and geared to specific programs or projects. At best, it brings temporary relief to a problem of underfunding that desperately requires a long-term solution. More frequently, it compromises the quality of the educational experience by replacing broad and diverse program offerings with short-term corporate interests.

In this regard, we would bring attention of the standing committee on finance and economic affairs to a study done by Robert C. Allen, a University of British Columbia economist, entitled Educational and Technological Revolutions: The Role of the Social Sciences and the Humanities. In the study, released by the Social Sciences and Humanities Research Council, Allen describes humanities graduates as having rates of employment and earnings on par with, or higher than, most business graduates and those graduating in high-technology fields. In fact, he argues that the so-called technological revolution is increasing labour market demand for university graduates in the social sciences and humanities.

These findings are in direct contradiction to the policy, tacitly endorsed by the Ontario government, of providing more funding and extra spaces for high-technology programs at colleges and universities while devaluing and eroding program funding in the arts and humanities. In light of this report, we would caution the provincial government that a continued overemphasis on high-technology, private sector job training to the detriment of other programs is a shortsighted strategy when considering the real economic needs of the province.

The government's recent decision to allow private universities to grant degrees will undermine the quality and accessibility of public universities. While the government claims that private universities will provide "niche" services for a "niche" market, the federation maintains that private universities will essentially put post-secondary education on the market. Because private universities will, by definition, be mostly dependent on user fees for their funding, the result can only be higher tuition fees charged to students, combined with deteriorating quality, since this is the scenario most likely to generate the profit necessary to keep private companies in business.

The impact of trade liberalization agreements on the operation of private universities has been articulated by the federation elsewhere. We reiterate our concern that by opening up public services to the international marketplace, we are jeopardizing the long-term funding prospects of our public institutions.

The Canadian Federation of Students recommends that the government of Ontario should provide adequate funding for post-secondary education in Ontario. As a minimum requirement, funding for Ontario's colleges and universities should be no less than the national average.

The government of Ontario should improve funding for research without reliance on the private sector.

The government of Ontario should cease measuring the quality of post-secondary education based on perceived private sector demand. As such, it should ensure that curriculum is neither determined by the private sector nor focused solely on high-technology fields and must cease using short-term private sector employment priorities as a way of penalizing programs offered at public post-secondary institutions.

Finally, the government of Ontario should abandon its commitment to allowing private universities to grant degrees in this province.

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Ontario has consistently lacked a coherent tuition fee policy. Instead, tuition fee levels have largely depended on the provincial government's willingness or unwillingness to fund post-secondary education. It is therefore not surprising that students have borne the brunt of the recent cutbacks by way of massive tuition fee increases. Tuition fees have increased by over 150% for university students and over 140% for college students in the last decade. The largest increases have occurred most recently. By the end of this government's first mandate, it was responsible for a 53% college tuition fee increase and a 60% university fee increase.

The increases in tuition, combined with declines in earnings and savings, mean that many avenues traditionally open to students for financing their education are now closed. Many families or individuals can no longer fund post-secondary education through their savings, while a bleak employment market makes the prospect of saving enough to go to school a near impossibility. Many people are now looking at the cost of a degree or diploma and deciding that it is no longer an option for them. Many others, already part way through their program of study, are realizing that they can no longer afford to continue. In either case, the accessibility of Ontario's post-secondary education system is progressively deteriorating.

To make matters worse, the Ontario government, in its 1997 economic and fiscal statement, announced the complete deregulation of tuition fees for graduate and professional programs at universities, for post-diploma programs at colleges, and for other high-demand college programs. The deregulation of entire programs of study within publicly funded institutions has meant massive tuition fee increases. Already, students entering deregulated programs are seeing increases of 20% to 400% in one year. Consequently, we are well on the way to creating a two-tiered system, where the only criterion for enrolment in certain programs hinges on a student's ability to pay. Studies are already showing that students from lower socio-economic backgrounds are being disappeared from programs where tuition fees have been deregulated. Furthermore, Statistics Canada's Education Quarterly Review shows the following:

"One of the most significant findings of the current trend analysis is that there has been a widening gap in university participation by family socio-economic status (SES) as revealed in the 1986 and 1994 General Social Surveys.... By 1994, a wide gap had occurred between [low and middle SES]....

"Our findings suggest that university participation rates have not increased as fast for young people from low family SES background. This factor combined with the increase in tuition fees has created a widening gap between them and young people from more affluent family backgrounds. This finding may have important policy implications surrounding issues such as accessibility and the equality of opportunity."

There is no doubt that these and other findings have motivated the governments of British Columbia, Manitoba, Saskatchewan, Quebec, Prince Edward Island and Newfoundland to freeze or reduce tuition fees in their provinces.

The Canadian Federation of Students recommends the government of Ontario should take the lead of the majority of provincial governments and implement an immediate tuition fee freeze.

The government of Ontario should also re-regulate tuition fees for all programs at public post-secondary institutions and set fees for those programs at levels comparable to that which existed prior to deregulation.

While the most recent statistics show that the overall proportion of university graduates indebted to student loan programs has decreased slightly, we would argue these changes are more likely the result of changes to eligibility criteria for student financial assistance, and the fact that certain students who would have accessed student aid have abandoned pursuit of post-secondary education. Nevertheless, the total debt load of students continues to grow. In fact, studies show that two years after graduation the amount owed to student loan programs has increased by 69% for university students and 89% for college students when compared between 1990 and 1995.

There are reasons for the escalating levels of student debt. Skyrocketing tuition fees have certainly had an impact, as have bleak year-round employment prospects. In addition, the Ontario government cut virtually all forms of grants in 1993-94, thereby forcing most students to rely solely on repayable student loans. Canada is one of only two Organisation for Economic Co-operation and Development countries without a national system of student grants. The combination of these factors on student debt in Ontario should not be underestimated. As it stands, Ontario's post-secondary students are graduating with some of the highest debt loads in North America.

Students wishing to pursue a post-secondary degree or diploma have been required to amass greater and greater debt loads in the form of repayable loans. For many current and prospective students, the prospect of incurring what could amount to lifelong debt is inconceivable. They are simply left with the option of dropping out of post-secondary education or never applying in the first place. From a larger economic perspective, we would also question the logic of saddling students with immense debt loads at such an early stage in their lives. A generation of massively indebted graduates does not make for a bright economic forecast.

Unfortunately, this government's response to the growing need for adequate student assistance, including viable debt reduction strategies, has been the introduction of measures that actually increase student indebtedness and make it more difficult for needy students to access the financial aid they require. Some of the changes have included disqualifying part-time students from OSAP eligibility; forcing students with parental responsibilities on to OSAP by terminating their social assistance eligibility; virtually dismantling child care bursaries; initiating processing fees; requiring credit checks; and now threatening fines of up to $10,000.

In addition, the government's plan to allow private companies to sell degrees in Ontario will not alleviate the student debt crisis, as the higher tuition fees will undoubtedly force students to borrow more and leave them with higher levels of accumulated debt.

The Canadian Federation of Students recommends that the government of Ontario should provide sufficient funding for student assistance to meet the needs of Ontario's students. Such funding should be separate and distinct from operating grants. The government of Ontario should also offer an enriched Ontario student assistance program designed to alleviate the debt burden currently facing Ontario's students. Such a system should include upfront grants to help reduce the debt loads carried by students; targeted assistance for students with dependants and/or special needs; expanded work-study opportunities for students to earn while they study; expanded interest relief strategies and debt reduction measures to aid students who experience difficulties during repayment and as a way to reduce defaults.

As part of such an undertaking, the government of Ontario must reverse the erosion of the current OSAP system by providing adequate funding for student assistance to meet the needs of students; restoring OSAP funding for part-time students; restoring child care bursaries for students with dependants; restoring access to social assistance to students with dependants; revamping parental contributions and dependency requirements to reflect current student realities; ending the practice of charging user fees for such things as OSAP information and applications; and ending credit checks on OSAP applicants.

The government of Ontario should also publicly and aggressively call upon the federal government to implement a national system of needs-based grants as an effective tool in the reduction of student debt.

With regard to the millennium scholarships, the federation continues to be concerned about the fact that federal dollars intended to reduce student debt continue to be used by this government to pay for existing programs. While a small concession was made last year allowing students to realize $500 net debt relief, we believe this is not enough. The Canadian Federation of Students recommends that the government of Ontario must move immediately to ensure that all funds allocated for the millennium scholarship go directly toward reducing student debt in Ontario. No portion of the millennium scholarship should be used to replace funding for already planned or existing programs. The government of Ontario must account for its use of millennium scholarship dollars through reporting mechanisms that are transparent and publicly accessible.

In conclusion, the Canadian Federation of Students has attempted to outline in this brief the negative impact that funding cuts have had on the quality and accessibility of Ontario's colleges and universities. The main issues facing students today are a direct result of the erosion of government funding to post-secondary education, and this must be our primary concern. We believe that the provincial government must play a more effective role in ensuring that students across Ontario have access to a publicly funded, publicly administered post-secondary system. It must also ensure that such a system offers a comprehensive range of programs and services and that ability to pay is not a prerequisite for access.

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It has been estimated that an additional 90,000 students will be entering the post-secondary system over the next several years. It has also been estimated that 15,000 new faculty will be required to meet the instructional demand created by the elimination of grade 13 in Ontario. Thousands of additional support staff will also be required to maintain the facilities required to house the incoming students.

To accommodate these challenges, the Ontario government must make a commitment to properly fund post-secondary education. This requires the immediate restoration of the $400 million cut in 1996-97, supplemented with additional funds for increasing the numbers of faculty and support staff and for building maintenance. Such a commitment allows Ontario's colleges and universities to meet the growing demands placed upon them and would stop the trend of increasing tuition fees in order to make up for government funding cuts.

In addition, the provincial government must reinforce its commitment to an equitable student aid system, one that does not burden students with debt loads that could take a lifetime to repay.

Thank you, and I look forward to your questions.

The Vice-Chair: Thank you very much, on behalf of the committee, for your presentation. We have about two and a half minutes for a response by each caucus.

Mrs Molinari: Thank you for your presentation. Two and a half minutes is not a lot of time to address some of the issues you have raised here today, so I'll focus on just a couple.

One issue has to do with your comments on tuition fees. Tuition fees have been brought back to one third. It's a shared responsibility between the three different parties, so the student is responsible for one third of the tuition. I'd like to hear your feedback on what you think that should be, if you think the government should be totally responsible for that. The tuition fees have also been capped at 2% for the next five years. You've commented on the rising and escalating of tuition fees. Those that have been deregulated are in programs where the earning potential for the student, once that student graduates, is certainly much more. The universities have requested that this happen so that they can provide the programs and not be constrained to set fees. That was in response to some of the universities' requests.

Also in your presentation, I noted you said, "The Ontario government cut virtually all forms of grants in 1993-94, thereby forcing most students to rely solely on repayable student loans." I find this interesting because this is prior to our government coming into office. We often hear opposition talk about what this government is doing with respect to post-secondary education and education, so this was an interesting piece of news in your presentation.

You also commented on "threatening fines of up to $10,000 for students found guilty of abusing OSAP." This in fact is for those who-

The Vice-Chair: There's only 30 seconds left.

Mrs Molinari: My question would be your comments on those who abuse the system. Should nothing be done with students and people who are deliberately abusing the system and taking taxpayers' dollars, taking it away from those who are legitimately entitled to it because of those who are abusing the system?

Ms George: With respect to tuition fees as a percentage of the operating budgets of universities and colleges, according to the Council of Ontario Universities and the ministry itself, tuition fees now account for 37.2% of the operating budgets of our universities. A decade ago that level was 19.5%, while, conversely, government grants have gone from 75.1% to 52.3%. We think that division of contribution to our universities and colleges is unacceptable. It's actually more than double the percentage of tuition fees in relation to operating grants in the United States, for example, and 37.2% is even more than the Ontario government campaigned on in its Blueprint document in the recent provincial election. That level was 35%. So the government has now exceeded even its own commitment during the provincial election.

The Vice-Chair: I'm going to have to move on to the official opposition.

Mrs McLeod: It was interesting when Ms Molinari spoke about the government's rationale in allowing deregulation in the areas where presumably people can repay their loans after graduation. I think what your brief was speaking to in terms of the impact of higher tuition fees is the way in which it acts as a disincentive for people ever getting into the programs.

I wonder whether or not you're starting to see some studies, whether there's some tracking about-you've noted a general study about the effect of tuition fee increases on socio-economic levels of people entering university and college. Are you starting to see that becoming even more pronounced? For example, getting into medicine-I understand there's a study at Western where the medical school first-year fees are up to, I think, $14,000 this year-are you starting to see that the level of family income of entrants is getting higher and higher? I wonder if you could comment on that.

Ms George: Absolutely. The Western study is a key example of how deregulation and the resulting massive tuition fee increases are shutting students from low-income and even middle-income families out of the system. We would argue that if earning potential is a factor, that can be addressed through a progressive taxation system once a student has been able to access post-secondary education and complete their degree. We've also seen studies coming out of the universities of Guelph and Waterloo, in addition to Statistics Canada and the University of Western Ontario study.

What concerns us is that deregulation of tuition fees has been slowly progressing. We started first with international students; then deregulated tuition fees were introduced for dentistry students. Now it's professional and high-demand programs. We've already seen that some university administrators, to deal with funding cutbacks by the provincial government, are now advocating for undergraduate tuition fee deregulation. I'm specifically referring to Queen's University as an example. We're quite concerned that deregulation, when it's been implemented, has not stopped simply in those programs, and that it will continue to be implemented across the system. We need to stop deregulation and actually roll back those tuition fees.

Mrs McLeod: You raise the millennium scholarship issue in your brief. Do you have any idea how many millions of dollars the Ontario government has saved by simply taking the federal dollars and using them to offset their loan forgiveness costs?

Ms George: It's hundreds of thousands of dollars currently. But of course because the process hasn't been transparent and an audit has not been done, despite our encouragement to both the province and the millennium scholarship foundation to do an audit, those numbers aren't concrete or available yet.

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

Mr Christopherson: Thank you, Erin, for your presentation. I think I owe you an apology. During the debate on Bill 147, I was reading public comments that you made into the record in favour of opposition-"in favour of opposition"; there's a roundabout way-but supporting the opposition we were putting forward on that bill. I kept referring to you as "he," so I apologize. I'm pretty sure I did that.

I want to turn to what you've said on page 3, and I want to quote from it. "In addition, Ontario's colleges and universities must now rely heavily on corporate largesse in order to remain viable. However, such reliance comes at a price. In return for funding, corporations are demanding a greater say in the day-to-day business of our colleges and universities and dictating policy decisions regarding curriculum. With alarming frequency, we are seeing pockets of our public institutions being privatized and funds going toward financing what amount to job training programs for the private sector." Very powerful statements.

I'll tell you why I'm posing this. There are a lot of people who don't see a problem with the idea that universities and colleges would find alternate sources of income. If that happens to be big business, fine. Any money they can get out of them they'll figure is to the public good, seeing it as some sort of positive contribution to society. However, you're raising an alarm bell, saying, "Hey, folks, what's really going on here is that they're getting to dictate what kinds of courses are being taught, thereby providing private customized training-best in the world-and the public is paying the hook and they're getting it for just a minor amount." Can you give us one or two concrete examples of where that's happening? I think that would sort of shake people if they knew that.

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Ms George: Sure. One example is at the University of Toronto. Nancy Olivieri was doing research on a drug for a pharmaceutical company. I believe it was Apotex. She found in the course of her research that the drug was actually detrimental to the health of her patients and came out publicly against the contract-

Mr Christopherson: Yes, I recall.

Ms George: -against the terms of the research she was conducting, to bring the public's attention to this dangerous drug. At the same time, the University of Toronto was soliciting a large financial donation from that pharmaceutical company to the university for endowments etc. That is still underway. The university administration and the pharmaceutical company engaged in quite a horrific smear campaign of that researcher. It's a clear case of how when private sector involvement in post-secondary education, and particularly research, is happening, it's being done in the name of profit and not in the name of the public good.

I'll give you another example from my own experience as a student at Ryerson Polytechnic University. I'm a journalism student there and my journalism studies have been done in the Rogers Communications Centre. My lab is the Sun Media newsroom. If I want to compete for scholarships, I have to fill criteria set out by CFRB Radio. My internships are all at corporate newspapers or magazines. I think that's a key example of how it's a training ground not for critical journalists, but actually a training ground for a corporate journalist to go into mainstream media. That's been my own educational experience.

The Vice-Chair: Thank you very much. On behalf of the committee, thank you for your presentation. We appreciated your coming forward.

CAMPAIGN AGAINST CHILD POVERTY

The Vice-Chair: Our next delegation is Campaign Against Child Poverty, if that delegation would come forward at this time. On behalf of the committee, welcome to the standing committee on finance and economic affairs. We look forward to your presentation. For the sake of the record, if you'd state your names at the beginning. You have a half-hour to be used partly for presentation, and what's left over will be divided evenly among the three caucuses.

Mr Gerald Vandezande: My name is Gerald Vandezande. I'm the volunteer spokesperson for the Campaign Against Child Poverty. With me is Mr John Buckingham, who is connected with the St Felix Centre, a long-time street ministry in Toronto.

For your information, as the cover sheet on the presentation shows, the Campaign Against Child Poverty is a coalition of faith communities, public interest and child advocacy groups, family service organizations and others who are concerned about the increasing numbers of poor and inadequately cared for children in Canada. For the record, I'd like to mention some of the member organizations, which include the Anglican Diocese of Toronto, B'nai Brith Canada, Canadian Association of Food Banks, Catholic Children's Aid Society of Toronto, Citizens for Public Justice, Family Service Association of Toronto, Jewish Family and Child Service, MAZON Canada, Campaign 2000, from whom you heard earlier today, United Church of Canada, United Way of Greater Toronto, and many more organizations that have increasingly become aware of the urgent need to do something substantial about the worsening child and family poverty in this province.

I will not burden you with reciting more statistics. I follow the hearings a bit, also here this afternoon, and I'm sure you've heard enough statistics by now that clearly spell out the crisis situation that is developing in our province, and it's a crisis that is developing throughout Canada. I want to speak to that major concern that confronts us in the hope that the government, in its next budget and in the policies it will be developing, will take the bold, courageous steps needed now in order to end child poverty this year.

In recent speeches and interviews with the media, Premier Harris has repeatedly said that Ontario has a booming economy, and in connection with child poverty has made the very valid point that everything must be done, unitedly, in order to make sure child poverty is eliminated. I will not now read into the record all his comments, but we take the Premier at his word that the Premier and his cabinet colleagues, as well as the caucus, want to demonstrate in the next budget that they're very serious about the threat of child and family poverty in this province and that they will do whatever they can.

I want to make a couple of comments in the context of the values, the vision, out of which the Campaign Against Child Poverty, on a non-partisan basis, is dealing with these questions.

We began a few years ago pooling all the resources and information we could lay our hands on in order to put together a comprehensive position as to what could be done in this province and throughout Canada, and in that context began with running two full pages in the Globe and Mail, a major statement addressed to our governments that they do their utmost to ensure that immediate action be taken to eliminate child and family poverty.

We followed that up recently with an open letter to the Prime Minister of January 19 in which we spelled out the five conditions we think the government must come to grips with. We're pleased that in the throne speech on January 30, the federal government made some very clear commitments that something must be done quickly with respect to the worsening crisis threatening children. In his reply to the throne speech, the Prime Minister made further commitments. I state those to you because for us in the Campaign Against Child Poverty it has constantly been a question of conscience. As people, as a province, as a government, as a Premier, as faith communities, as community organizations, what does our conscience dictate we do at this crucial moment in Canadian history, and what will the Premier, the cabinet, the caucus, do now that they have the power to do something drastic?

I'm sure all of you are aware of the budget surplus the government ran of billions of dollars, some of which were spent on tax cuts that mostly went to the wealthier people in our province and none of which went to restoring the welfare payments which were arbitrarily cut by the government when it got into power after the first election. We deeply deplore and severely regret that arbitrary decision to cut the income of the most vulnerable people in our society, and we make an appeal to you again today on behalf of all the faith communities, community organizations and others who, with us, want to do whatever can be done to make sure no one in this province lives below the poverty line and that particularly the plight of vulnerable children, who are voiceless citizens, be taken into much more active consideration when the next budget is prepared.

In that connection, I want to refer for a moment to the major agreement that was signed by all the provincial Premiers and territorial leaders on September 11 in connection with the early childhood development initiative. That was signed by all the provinces, including Ontario. The question I want to leave with this committee, and I'll come back to it again at the end if all goes well, is that no one knows how Ontario plans to spend the estimated $114 million it will receive from the federal government under the early childhood development initiative. Some believe the funds may be added to particular initiatives the government is thinking about, but nothing has been made public. We are here today to plead with this committee to ask the Minister of Finance and the Minister of Community and Social Services, as well as the Premier and the other members of the cabinet, that they make it very clear how they will spend the $114 million that has been allocated to the province of Ontario to deal with the threatening crisis of child poverty. I've raised that question because we're also asking the federal government to do much more than it has done in the past and we're asking the other provincial and territorial governments to do what their conscience should require them to do.

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In that connection, I want to draw to your attention again, as I said at the beginning, that for us this issue is a non-partisan issue. Poverty is not an issue that is really "owned" by political parties for their political partisan purposes but it is a human issue. It involves human rights, civil liberties, fundamental needs of children and their desperate families. We make an appeal to you to register that message very clearly and very pointedly with the Premier, with the cabinet and with the government, and when you write your report for the Legislature and make it public, that that central question as to which conscience, which values, which vision and which morality shapes your approach to child and family poverty be clearly outlined, as well as the question I asked a moment ago: how will the government spend the $114 million it is getting from the federal government, which helps to stimulate and increase its revenue in order to deal with the tragedy of child poverty?

I've raised that question in the context of a statement I want to read to you. "I agree with Premier Mike Harris that, `The crisis that took place in Walkerton was the one that was most tragic and impacted, certainly, not just the government but ... the whole province in a very shocking way.'

"Another crisis that is `shocking' and `tragic' is the government's hard-hearted refusal to restore social assistance for families to house and feed their children."

I read those couple of paragraphs, which I took from the Toronto Star where I published them as part of an appeal to the Premier, to you and to your colleagues to examine what our collective conscience dictates us to do at this historic juncture in Canadian history. We plead that you do whatever you possibly can by way of compassionate policies and by way of generous allocation of funds so that people who are in desperate situations have a real future ahead of them.

The government has been in a surplus position in terms of its expenditures. We plead with you to put a moratorium on tax cuts, to increase the social assistance payments, to substantially increase the support that children and vulnerable families need in order to live with dignity, and that their well-being and their future becomes the bottom line in terms of the values that you seek not only to use in speeches and in reports but also to practise in your budget allocations.

I will leave it at this for now. I'm speaking on behalf of all the faith communities in Ontario. The ad that you may have seen on January 19 included virtually every faith community in this province, every community organization in this province, every organization concerned with the plight of children, organizations that put their own resources, their own money at risk because they believe it is their conscientious duty to do whatever they can. But we plead with the government to do its share.

I'll close with one quote from the Premier, if I can find it quickly. He said, I think it was on October 5, "This cause of child and family poverty is so large and so important that it demands a united approach and a maximum effort from all of us." That's the Premier speaking. We totally agree and we say, government, do your share, do your duty. Exercise your governmental responsibility to see to it that justice is done and that no children fall between the cracks, that no families are being discriminated against, that we end the politics of discrimination and the economics of exclusion and practise the values of human dignity and well-being that have been at the heart of our province and of our nation which we love so much.

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

Mrs McLeod: I'll begin and then turn it over to my colleague.

Mr Vandezande: Would you speak up slightly. I'm a bit deaf.

Mrs McLeod: I certainly will. I'm aware, at least I believe that it's the case, that over the last couple of years as we've enjoyed an economic boom, to quote the Premier again, as we look across the country it's only in Ontario and I believe Newfoundland where the numbers of families living in poverty have increased, as opposed to showing some at least marginal decrease. Is that true? Is that the right information?

Mr Vandezande: The record that you got and the materials you got from the Campaign Against Child Poverty, which is a member of our coalition which appeared here earlier, clearly indicate that trend. You are correct-and I'm a cost accountant by background-that given the way the economy has grown, given the amount of revenue the government has collected, given the cuts that have been made in welfare payments and in community support programs, vulnerable children and families are at their worst in this province.

Mrs McLeod: It's interesting that cost accountancy is your background, because although child poverty should not be a partisan political issue, sometimes the responses to it are ideological. It was said earlier around the table that one of the reasons for tax cuts is that there will be an improvement eventually of government's ability to meet the needs of people for social programs. I guess my question to you is, do you see any way in which the tax cuts we've already had in Ontario, not to mention the tax cuts that are to come, have actually served to benefit children who are in poverty, working families or others who are living in poverty?

Mr Vandezande: The tax cuts and their impact on vulnerable families and poor children-the document filed by Campaign 2000 clearly shows-I think it's on page 6-that the tax savings have gone, by and large, to people in the high-income brackets. The government has not gone out of its way to make sure that any surplus money it has received be designated to help eliminate poverty in this province. In fact, if you take inflation into account, then the poverty rates have worsened since this government got into power.

Our appeal is that indeed it ought not to be a partisan issue and that the government ask itself, particularly the Premier, what in the light of our conscience, of our values that we cherish as a province ought we to be doing in the next budget to make sure that we correct the serious mistakes that have been made and make sure that all people are treated equitably? That may mean, probably must mean, that no more tax cuts go to people who are well off, who are rich, who get much, much more than anybody on modest incomes, and that the big tax cuts that abnormally go to the wealthy be redirected and go in support of increasing the social assistance programs, to community services and the social assistance payments to people who desperately need it who now live on the streets or increasingly stay over night in shelters.

I don't know how the Premier, how the cabinet, how you as people deal with it in your conscience. But our conscience dictates to us that we make this pitch to you, this appeal, that we end the situation once and for all and that there be an all-party effort in the Legislature to make sure that the budget is not a partisan issue but is a confirmation that this province is determined to treat all of its citizens, especially the children, fairly and equitably.

The Chair: You still have a minute.

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Mr Kwinter: I just wanted to address the question as to what this province is going to do with the money it gets from the federal government. All you have to do is take a look at the national child benefit supplement, where the provinces have been urging the federal government to participate in alleviating this problem. The federal government comes up with a program, sends it to the province and, instead of doing what it's supposed to do, and that is to supplement the income of these people who require the child benefit, they've deducted it from what they get. As a result, if anything, it's alleviated their responsibility and has taken money directly from these people that was intended by the federal government.

Mr Vandezande: I understand what you're saying. I think that position is unacceptable. It's immoral, and I don't use that term-you may not steal from the poor in order to enhance the powerful position of the rich and the wealthy. I think this government owes it to its own conscience and to the future of this province that the $114 million be used for those for whom it was designated.

The Premier was on the China mission with the Prime Minister and they seemed to be getting along. My hope is that the provincial Premiers and the territorial leaders, united, say, "We're going to spend the money the feds are making available for the purposes for which it was intended, and we're no longer going to discriminate against the most poverty-stricken people in our society." I hope that in the next budget, with a new finance minister and, hopefully, a Premier with a renewed conscientious dedication to the elimination of poverty, we'll certainly make sure that the money is reserved for that for which it was intended: to eliminate poverty and to make sure that there is no homelessness in this province any longer.

The Chair: With that, I have to go to Mr Christopherson.

Mr Christopherson: On your last point, hope springs eternal, but don't hold your breath. There aren't any real-

Mr Vandezande: Just on that, hope is a conviction that we all share, I hope, that needy people should not be ignored, should not be excluded from meaningful participation in society. Hope is that you have the confidence that justice can be done, will be done, ought to be done and that government ought to give that kind of leadership. I think to the degree that the opposition parties, including your own, make this an issue in the House-and maybe we ought to have a repeat of what my member of the Legislature, Alvin Curling, did. That was a sit-in.

Mr Christopherson: They changed the rules. We can't do that any more. They changed the rules.

Mr Vandezande: Well, you do it anyway. What we need is a public demonstration that our elected representatives share the solidarity that they often express in a visible way with the people who are now homeless, who are poverty-stricken, and find an effective way of demonstrating that. If that means a public protest of some kind in the Legislature or in front of the Legislature, together with all who share the values that the Premier himself has spoken about-either he says what he believes and does what he believes and shows it in his budget or he withdraws and apologizes that he has been misleading the province.

I would like to believe that the Premier will do the right thing. It just passed through my mind that when he was installed or ordained, or whatever you want to call it, as the Premier of this province, his Anglican rector-and I don't have the prayer with me-recited a beautiful prayer that the Premier and the government do justice, act wisely and come out in favour of the needy. I think that needs to be translated into action that demonstrates that the Premier believed what he said, that he will do what he promised and that he will instruct the finance minister to spend $114 million, and the money in excess of $1 billion that is available, if they really want to change the face of poverty in this province.

Mr Christopherson: I would go further than that. If they really cared, they would have at the very least recognized that it's totally unconscionable to take away 22% of the income of the poorest of the poor and do something about it. They haven't done that. There's affordable housing-they haven't done that. In terms of us protesting, we did that and there were a number of times since then when we wanted to do the same thing, but they've changed the rules of the House.

Let me get in my question and then I'll give you carte blanche to go. I do want to emphasize, though, that Tony Martin, our MPP for Sault Ste Marie, made a very strong statement in that regard as he set aside the robes of being a Deputy Speaker of the House-

Mr Vandezande: Personally, I thought that was a tremendous act of conscience. Maybe all the members of the Legislature may have to stand up and say, "Our conscience dictates that we stand here and, united, make it clear that we no longer accept the intolerance that is being demonstrated vis-à-vis the most vulnerable."

I think members within the Conservative caucus-and I've talked to them-begin to feel that way. They know they're not engaged in a Common Sense Revolution that touches the lives of ordinary people in a wholesome way. A number of them are ready to quit and resign, and they wait for the government to do something in the next budget. I hope they follow the dictates of their conscience and challenge the Premier, the new finance minister and everybody else within the party to deliver what they've been saying for so long but have not done.

Mr Christopherson: I won't name names, but I could name some of the members of the Tory backbenchers in particular who feel that way and struggle. Unfortunately, there is a majority who somehow manage to get past it and find other ways of it not bothering them. I lived through it, I was here, I refer to it in speeches, I talk about it now, and I have to tell you, sir, as I mentioned to Lyn, I find it surreal that here in Ontario one of the first things a new government did was take away 22% of the income of the poorest of the poor, something they wouldn't dare do anywhere else. What is also a sad commentary is that we, the people of Ontario, let it happen with barely a peep.

Mr Vandezande: One can argue about that-and you and I can have coffee-whether it was barely a peep. My concern is that today we resolve to make a new start. This is the end of your committee hearings. You have to write a report. You have to present that to the Legislature. You have to think through what we, deep down in our hearts, want to say our conscience dictates with respect to the homeless people in the streets of Toronto and other cities, with respect to poverty-stricken families. What are we going to tell our respective constituents, our faith communities, our community organizations that are desperately trying to come to grips with all the crises they daily confront? Are we going to make it absolutely clear that we're going to make a new start in life?

There is hope for this government, as there is hope for Ontario, to the degree that we're prepared to adopt the values of justice and charity and love and concern and solidarity and equity in our fiscal policies so that it becomes evident that this government has a right to govern. But if you abandon the very values this province has historically stood for, if you ignore the people who are suffering deeply daily, then you lose your mandate to govern. You may have it yet for a little while, and my hope is that you will use the balance of your mandate in such a way that the people of this province will say, "We respect the government for having the guts to change its mind, to have a change of heart and to follow the dictates of the conscience that is being informed by a faith commitment, by a value commitment, by a vision that speaks of an Ontario in which we work together for the common good based on public justice for all." If we don't, we're in deep trouble.

The Chair: With that, I'll go to the government side.

Mrs Molinari: Thank you very much for your very passionate presentation. It's evident that your work within the organization comes from the heart and it's something you feel very strongly about.

You ended your initial presentation, before the questions began, with a quote from the Premier. Certainly, the Premier and this government are committed to-in fact, we've introduced a number of new initiatives that support low-income families and children.

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Ontario's Promise challenges all of the organizations and everyone to come together to support those who are in need. I don't know if you're familiar with some of the initiatives: the early years challenge fund; the Ontario Breakfast for Learning program; Healthy Babies, Healthy Children; Better Beginnings, Better Futures; and there are a number of others.

I want to comment on some of the-

Mr Vandezande: Just on those two programs that you've mentioned, they are important initiatives and they make a valuable contribution, but to a large degree they will be dependent for their success on the amount of money that non-government groupings in our society make available.

The question I asked at the beginning is, what will the government do with the $114 million it will receive from the federal government that is designated by an intergovernmental agreement to help children and families caught in desperate situations? That's the question we're asking; that's the question we would like to have an answer to. With all the praise I want to give to whatever good initiatives the government has taken, it must address and tell the people of Ontario what it will do with this government transfer from Ottawa. Will it be used for those whom it was meant to help?

Mrs Molinari: The budget will indicate specifically what that will be used for.

Mr Vandezande: But why wait until May? Why not say tomorrow, "We're going to make a public pledge that the $114 million pledged by Ottawa that we agreed to in the interim agreement in September 2000 will be set aside, without reservation, for the very purpose it was intended"? That would give people a clear idea that this government wants to be very conscientious about the deals it signed in Ottawa, with Ottawa and the other provincial governments, and say, "We are indeed determined to do what we promised."

Mrs Molinari: I thank you for your recommendations, and obviously that's a recommendation you've made here that will be passed on.

Mr Vandezande: It was a recommendation that was signed by the Premier. He accepted it. He signed the deal on September 11. It happened to be my dad's birthday; that's why I remember it well. The agreement, what Ontario committed itself to, is very clear. It can't dodge its responsibilities by not telling the people where the money is going to be spent. Don't wait until the budget. Everyone knows. Everyone is waiting for a clear answer.

Mrs Molinari: If that's the commitment the Premier made, then I'm sure it will be a commitment that will-

Mr Vandezande: I think this committee should remind the Premier that he ought to-

Mrs Molinari: And that's what this committee is for.

Before I lose all of my time, I just want to make sure I get in some of the other points I want to make, especially the points you've raised around social assistance and that area. We have a conscience and we believe that the best way to help people is to provide them with a climate where they would be able to help themselves and to give them the renewed hope to be able to do that.

I'm also a very religious person and I spend time reading the Bible. There is a quote that says, "You give them fish and they will eat for a day; you teach them how to fish and they will eat for many days." That is something I think is important to keep in mind, that you don't do things on a short-term basis but you allow people to regain hope in order for them to continue and to be able to have the self-assurance and self-discipline and their own esteem to go on further.

Social assistance is a program that is there for people who are in need. It's certainly not-

Mr Vandezande: But we now have people who don't have fish, who don't have bread, who don't have a home, who don't have what they need in order to live. The statistics are there. Indeed, that Bible passage is very relevant. Teach them how to fish, but teaching them how to fish includes giving them the kind of adequate income, the kind of child care, the kind of jobs, the kind of opportunities that will enable them to take care of their families. If you don't give them the kind of bread, the kind of food, the kind of home, the kind of support, the kind of health care, the kind of community care they need, then we are violating the very passage you quote and we're not following what Jesus said, "Do justice, show mercy, practise faithfulness, demonstrate love, show your solidarity."

Our appeal, as faith communities-on a non-partisan basis-is, go out of your way to demonstrate your conscience and translate it into a commitment that helps take people off the street and makes sure that children are adequately fed, that families are not left out in the cold-we need more and more out-of-the-cold programs-so they can experience the warmth of a justice-loving government and Legislature that are determined to see to it that all people can live freely with respect and with dignity and experience the well-being they're entitled to as Canadian citizens.

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

Mr Vandezande: Thank you. I'll be glad to engage in further discussion. This is serious and you laugh about it.

Mr Galt: No, I'm not laughing. It's just your enthusiasm. I wasn't being nasty.

The Chair: I'm sorry. I must go on to the next presenter, because we do have a schedule that we have to meet.

ONTARIO HORSE RACING INDUSTRY ASSOCIATION

The Chair: Our next presentation is from the Ontario Horse Racing Industry Association. I would ask the presenter to come forward and state your name for the record. On behalf of the committee, welcome. You have 30 minutes for your presentation this afternoon.

Ms Jane Holmes: Thank you, Mr Chair and committee members. My name is Jane Holmes and I'm the executive director of the Ontario Horse Racing Industry Association. I see a number of faces that are very familiar around the table. I want to thank you on behalf of my industry for allowing me to make this presentation today.

OHRIA is an umbrella organization that represents all major segments of the horse racing industry: the 18 licensed racetracks across the province, the owners and trainers, the horsemen, who are the grooms, the jockeys. I think it's kind of fitting that I'm following the last presenter, in that many of the people employed in our industry are considered marginally employable. Without work in the horse racing industry, they too could be living on the social assistance program of the government. We represent all the breeds in the industry: the thoroughbreds, the standardbreds and the quarter horse industry.

OHRIA's mandate is to seek to further promote the horse racing industry as a vital part of Ontario's lifestyle, heritage and agricultural economy. You may be aware that the horse racing industry employs over 45,000 people, and that's equivalent to 27,000 full-time jobs. However, many of the jobs in our industry are part-time. The industry spends-and this is just the horsemen alone-over $1 billion a year, and that makes it the third-largest agricultural sector in the province. We are also a very important part of the gaming sector and we compete with government-operated lotteries and casinos and government-sanctioned casinos and charitable gaming.

Horse racing is a vital component of Ontario's economy, particularly in the rural area. The industry, through OHRIA, has been advocating a comprehensive provincial gaming strategy since 1995. This gaming strategy is still not in place. It must identify the net economic impact of introducing new gaming products and identify the interrelationships between all the various forms of gaming in the province. This would include a thorough consideration and quantitative estimation of potential cannibalization, substitution effects and the complementarities among the various components of gaming. I can say this because as the new forms of gaming were introduced into the province, the horse racing industry felt the impact. As such, the governments of the day have introduced various programs to try to assist the horse racing industry.

We have learned that the Ontario Lottery and Gaming Corp conducted a market assessment of a limited subset of the gaming industry. We believe it's necessary to look at the gaming industry as a whole, because a partial analysis results in a truncated view of the overall industry. In the aforementioned study, the only considerations were commercial casinos, charity casinos and the slots at racetracks. Parimutuel wagering and other forms of charitable gaming, such as bingos, were not considered in this study. Yet both our industry and the charitable gaming industry are highly regulated by the government in their gaming expansion by either the Ontario Racing Commission or the Alcohol and Gaming Control Commission. This creates an unlevel playing field between private investors versus government-operated gaming when it comes to expansion.

Again, if there is a provincial gaming strategy, it's important to address not just the direct gaming dollars that go to the government, because that presents an extremely limited view of the impact of any particular gaming activity. In our view, a provincial gaming strategy should be based on a full economic impact assessment which includes direct and indirect employment income and all forms of government revenues, not just direct gaming revenues. In our industry, the impact consideration we are advocating should reflect the impact of our industry on rural communities and the agricultural sector. Only considering the dollars returned to the government in terms of direct gaming revenues is an unbalanced perspective.

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Therefore, we are here to request that until a comprehensive provincial gaming strategy is completed, there be no further expansion of government-operated gaming venues and new gaming activities in the province. We are particularly concerned about another charity casino in downtown Toronto because of the negative impacts that commercial and charity casinos have had on our sport. This is why we applaud the current moratorium on gaming, which will last until 2002, and we wish that would continue further into the future until there is a comprehensive gaming strategy in place.

Now for the good news. Our industry is being rejuvenated by the government's initiative to reduce parimutuel taxes and the launch of slot operations at racetracks. However, any expansion of other gaming activities in our market area would be inconsistent with these initiatives and work to undermine the positive impacts that have been felt.

Between 1992 and 1998, our industry suffered extensively from a decline in wagering and attendance. In no small way was this exacerbated by the rise of commercial casinos and lotteries. Wagering remained almost unchanged in nominal terms between 1992 and 1998. In real terms, if we adjusted for inflation, standardbred wagering dropped by 14.8% over the same period. While thoroughbred wagering didn't drop the same amount, it did decline by 2.6%.

Several other key variables in our core business which contracted over the same period include the number of participants in the industry. The field size, of course, diminished, the number of standardbred races were reduced, and the number of thoroughbred races stagnated.

But our industry is being rejuvenated and we are a very good-news story. There's incredible optimism in the industry right now that has never existed before. Fresh money from slots and the tax breaks have moved racetracks from a negative cash flow to a small positive cash flow. We expect that the positive impacts of the tax reduction will be further improved by the end of the industry's five-year breeding lifecycle. What I mean by that is that within this industry, if someone is going to make an investment in a brood mare, for example, it will take three years before they will realize their return on that investment, by the time they are able to sell the horse, because it's a year of gestation, a year before it can be sold as a yearling, and then hopefully in the second year the horse will be able to race at the track.

Parimutuel wagering increased by 5% in 1999 over 1998 and by a further 4.34% in 2000 over 1999. Those are not adjusted for inflation. We have become the envy of every other horse racing jurisdiction worldwide, particularly in other provinces, which are often calling OHRIA asking for help to find out how we developed the partnership with the government so that they could get advice on revitalizing their sagging horse racing industry.

The Ontario government responded to the industry's request to give us the tools and resources to reinvest not only in our industry but also in the province. Since OHRIA took over the administration of the horse improvement program from the Ontario Racing Commission, we have been able to double the program's base funding. This revenue is being reinvested into the horse race and breed programs, such as the famous Ontario Sire Stakes, which is now identified as the top stakes program in all of North America. This has laid the groundwork for many domestic and foreign investors to develop new businesses in rural Ontario. In fact, an interesting note is that there was an Australian breeding operation looking to set up its base of operation for North America, and they have selected Ontario and will be operational this year. I think that's a big win for Ontario, that we're able to draw international investment into the province for this.

The new revenues have induced the racetracks to embark on major investment programs, sometimes in excess of the new revenues that are being received, to expand and upgrade the facilities and services at our tracks. It is our hope that this investment program will be sustained and will result in a larger revenue base for both the racing industry and the government.

It is our considered opinion that the revenue growth potential for all partners is not being optimized and could be better realized with improved marketing of racetracks as gaming entertainment destination centres. There are positive opportunities to showcase the venues as tourist destinations or growth poles. This will also result in expanding the economic impact of the government's initiatives into the rural areas.

Now we come to the good news. Since we got the parimutuel tax break and the slots, the tracks in Ontario have an average employment of 4,856 people. Collectively, the tracks have spent $56.2 million on track improvements and upgrades during the past five years and over $205 million on developing the infrastructure for housing the slots. That's all private investments from people involved in the industry. These capital expenditures have generated substantial temporary employment, incomes and tax revenues at the tracks and in the economy at large. The capital expenditures on upgrading and rehabilitating the tracks have contributed $67.1 million in income, a total of 939 person-years of employment, and $24.8 million in taxes. In addition, we have the capital expenditures on the tracks for creating the facilities to house the slot machines, and that's contributed $247.7 million in income, a total of 3,466 person-years of employment, and $91.6 million in taxes. The combined total of this is over $315 million in income, almost 4,500 person-years in employment, and a total tax revenue of $116.4 million to all three levels of government.

We had advised the government that if we were given the tools, we would reinvest in Ontario and our core business. I believe the figures I've just identified have demonstrated that the horse racing industry has lived up to its commitment.

It also gives me great pleasure to report that the horse racing industry has taken a very proactive approach in promoting responsible gaming. We have partnered with the Canadian Foundation on Compulsive Gambling in outreach and public awareness programs. We have also recognized our leadership role in rural Ontario. We recently made a major donation to the Ontario 4-H Foundation to help the leadership of young people in rural Ontario.

I want to thank the committee for their time. I urge the government to move forward on a comprehensive provincial gaming strategy so that the jobs that have been created by the private sector are maintained and not put in jeopardy by expanding the government-operated market without first understanding the implications of doing so.

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

Mr Christopherson: I thank you for your positive report today, as a member from a city that now instantly has a racetrack. I'm from Hamilton. Flamborough is now a part of Hamilton and we now have a racetrack, us Hamiltonians.

Ms Holmes: You do, the fabulous Flamboro Downs.

Mr Christopherson: Absolutely, an important part of our community.

You mentioned on page 2, and I'm quoting directly from your report, "Ontario has become the envy of other horse racing jurisdictions worldwide, but particularly in other provinces who have called upon us to provide advice on revitalizing their sagging horse racing industry."

Can you just expand on that a little bit and give me a better sense of what's going on in other provinces?

Ms Holmes: Absolutely. One of the things you're probably all aware of is that this industry is historically known for being fractious and having infighting take place. Under the umbrella of OHRIA we have brought all the parties of the industry together to speak as one voice. We resolve the issues internally and we're able to identify and plan for our future so that we were able to bring forward to the government the types of tools we needed to reinvest in and rejuvenate the industry.

I personally have gone out to the Maritimes to help them in setting up an OHRIA. In fact, I just came back from Alberta this past weekend, talking to them about how the industry needs to develop a plan for their future.

Mr Christopherson: Are they structured similarly in the other provinces? I don't know a lot about the racetrack business.

Ms Holmes: They are structured somewhat similarly. I think the difference is that in Ontario we see the government as our partners. You are our competitors, but you're also our partners. Unfortunately, that hasn't always been the case in some of the other jurisdictions. The perception that they're a dying industry has been taken internally, instead of saying, "We can get out of this circle."

Horse racing is regulated federally by the Canadian Parimutuel Agency, and then all the provinces have a provincial regulator as well.

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Mr Arnott: Thank you very much. I appreciate the information you've provided to us. It's interesting to see how your industry has turned round since we came into office and certain changes were made to assist you.

But like you, I'm concerned about gambling addiction. I know you made reference to it toward the end of your brief. I was wondering if you could give us a little more information about the kinds of programs that you are supporting to assist what you'd call promoting responsible gaming, saying that there are public awareness programs and outreach programs. Could you tell us a little bit more about what those entail?

Ms Holmes: Sure. One of the things we did is that we copied the casinos in having a self-exclusion program, so if people have identified themselves as having a problem, they could request to be banned from not only our racetracks but our teletheatres. We have a bit more difficult situation in enforcing it because we don't have security cameras around all of our facilities to the same degree that they do at the casinos or the slot operations. But we've developed a poster campaign called Know When to Take the Reins. For information on responsible gambling, they phone the Canadian foundation.

We were also the first gaming industry in the province to actively promote the provincial problem gambling helpline. In fact, I guess a bit to our detriment, it looked like a lot of the people who were phoning had problems with parimutuel as the vast majority. But it was just the success of our promotion of the line that resulted in those types of numbers, because in other statistical studies, it's shown that in terms of gambling, parimutuel is statistically insignificant.

We have pamphlets that are made available. We're currently putting together a video for training all the staff. The problem we have is that we're so dispersed throughout the province, particularly with the teletheatres, it was difficult to bring people into one location to be able to train them. So we're looking at videos. We're also talking to the foundation about putting together a video that would be shown on the TV screens that would be directed directly at the customers, so if they do have a problem, they would be able to get the information there and know how to deal with it.

I personally represent the industry on the Ontario partners for responsible gambling, which is the Ministry of Health and all the various gaming venues.

Mr Arnott: The government is setting aside a certain percentage of the revenues from gaming. Is it 2% of the slot revenues?

Ms Holmes: Two per cent of the slot revenues go toward problem gambling education and treatment programs.

Mr Arnott: Research as well?

Ms Holmes: Yes, that's correct.

Mr Arnott: Again, thank you very much for your presentation.

Mr Kwinter: Hi, Jane. I'm just delighted to have you here and to have your presentation. Members may not know, but I was the minister responsible for implementing the racetrack assistance program in 1985. That was at a time when the horse racing industry was in real trouble. The reason they were in real trouble, of course, is because at one time they were the only game in town. If you wanted to gamble, you could only do it at a parimutuel racetrack. Then with the advent of bingos and lotteries and casinos, it really had an impact on the racing industry.

First of all, the biggest problem is that there were no young people coming to the tracks. It was all people who had been used to horse racing, and they were the ones who were there. The racing industry was in deep trouble. They were having, as Jane has already pointed out, trouble attracting purses, trouble attracting horses.

This industry has far-reaching benefits to Ontario, without the gambling. I'm talking about, and it's already been alluded to, the fact that many of the people who work in the backstretch are virtually unemployable other than in this industry. There's a huge spinoff for the agricultural sector in the growing of hay, in the raising of horses. If you fly over Ontario in a small plane, you see all these tracks. It's too bad our colleague Mr O'Toole isn't here, because on our trip he was telling me that he had no idea of the extent of tracks and horse-breeding in his particular riding until someone took him on a tour. So it's a very important industry. In the agricultural sector it's number three. It's very important. I don't have to tell Dr Galt, who's a veterinarian. He would certainly know about that as well.

The point that I'm trying to make-and I'm not asking a question because I agree with everything that you've said-is that what is critical, and the reason the government made the decision to put the slots into the racetracks, is that it solves lots of problems for them. Number one, in any community, particularly in Toronto, there is a large number of people who are opposed to casinos. By putting it out at the track, which already has a gambling component, it takes it away from, say, putting it in downtown Toronto, where people may object, and it gives it to an industry that's used to dealing with gambling. It has the culture, the infrastructure to deal with that. So that is really important.

I have seen, and I encourage any of you to go out there to see it, the dramatic difference in what has happened as a result of the racing industry being allowed to bring in slot machines. Not only does it provide a gambling venue for people, but it has immeasurably helped the industry. Suddenly the purses are bigger, the number of races is greater. It's a win-win for everybody.

The problem, and this is a point that I'm sure Jane has been trying to make about everything else, is that now that we're on a roll, you can't kill the goose that lays the golden egg by providing competition literally from the same people who regulate it. The government would be the competitor if they put in these casinos, and until there's a real impact study as to what the result is going to be, I think it's absolutely critical that that be brought to the attention of people.

We see it in Windsor right now. With the advent of the casinos in Detroit, the Windsor casino is still doing well, but it's not doing as well as it used to. That may even get worse as more and more operators come into that area.

I just wanted to say that I'm totally supportive of your position and I wish you well.

Ms Holmes: Thank you very much. I'd also like to note for everyone here that the investment that the industry has put in to developing the infrastructure for the slot operations at the racetracks is equivalent to what the lottery corporation has been putting in as well, so that we truly have been equal partners in this one. That's why, as partners, we don't see that we should have the opportunities and the market diminished by the government putting in competition down the road, which has happened in the Chair's backyard with the Point Edward casino for Hiawatha racetrack. We've seen the numbers drop there since the table games have gone in at Point Edward.

The Chair: With that, on behalf of the committee, thank you very much. It's always nice to see somebody from the constituency.

We're running about five minutes ahead of schedule, so we'll recess for about five minutes until the next presenters show up.

The committee recessed from 1648 to 1656.

CANADIAN UNION OF PUBLIC EMPLOYEES-ONTARIO DIVISION

The Chair: If I can get your attention, we'll bring the committee back to order. Our next presentation is from the Canadian Union of Public Employees, Ontario. I would ask the presenters to come forward and state your names for the record. On behalf of the committee, welcome, and you have half an hour for the presentation.

Mr Sid Ryan: My name is Sid Ryan, the president of CUPE Ontario. On my left is Judy Wilkings. Judy is the legislative liaison for CUPE Ontario. On my right is Shannon McManus, who's a researcher with CUPE.

I'd like to thank you for the opportunity to present the views of CUPE Ontario with respect to what the Ontario government should do in its upcoming provincial budget. The provincial budget has a significant impact on CUPE members, both directly as workers in the broader public sector and as residents of the province. We are deeply concerned about the provincial government's economic policies, particularly around privatization, deregulation, the elimination of public services, tax cuts, downloading and funding cuts.

We believe the economic outlook is bleak. A recession appears to be on the horizon. Stock markets around the world went into a tailspin earlier this week. Nortel's slide shook up the markets. Daimler Chrysler and Nortel are laying off thousands of workers in Ontario. We've seen, for the first time in quite a while, Ontario's welfare rolls are rising again-4,500 people last month alone.

Hello, John. How are you doing?

Mr O'Toole: Hello. How are you?

Mr Ryan: Pretty good.

The Ontario tax cuts, we believe, have not created this so-called economic growth. Economic growth, as we've been saying all along, has been due to exports and the booming economy down in the United States. Now that they've gone into a tailspin, guess what's happening? Ontario is following suit. The government must be prepared for an economic downturn. Cutting taxes is not the answer. Tax revenues should be invested in public services, including a strong social safety net, to prepare for tougher times.

We believe a strong public sector contributes to a strong economy. The government's tax cuts have had an impact on the quality of public services. Ontario's cities are in financial difficulties because of downloading, amalgamation and cutbacks. Schools and students are damaged by a rigid and inadequate funding formula. Social service agencies cannot provide the quality of service they have in the past. Child care centres are closing. The quality of emergency hospital services has fallen.

More tax cuts, we believe, are extremely foolhardy. Personal and corporate tax reductions have already cost our province $35 billion since the Tories got elected. The majority of these benefits have gone to the wealthiest people in Ontario. User fees and delisting of services mean that poor and low-income citizens cannot afford to pay.

At the same time, the government continues its attack on the poor, in particular, people on social assistance. During the most productive period of time in our history with respect to growth in the economy and wealth-in the last five, six, seven years-we have not seen a single penny go into welfare payments. As a matter of fact, we think it's quite disgraceful that you didn't even reach the cost-of-living increases for people on assistance at a time when corporations and businesses were making profits in this booming economy in the last number of years. As I say, it's due to what happened in the United States and has nothing to do with what the Tories did in this province. Not one single penny was put into the minimum wage; people were earning $6.85 an hour. In the United States, during the same period of time, the minimum wage was increased on at least two occasions.

We believe the budget reflects the priorities and values of the government, and it is possible to make other decisions. We urge this government to reinvest in public services, like health, education, municipal and social programs.

We see a tremendous push to privatization in all of our sectors. We believe this government is the most interventionist in the history of this province. Its policies continue to have a dramatic and negative impact on every part of the public sector. The government has centralized control and interjected itself into the broader public sector. It is pressuring every sector to hand over services to private, for-profit operators. Amalgamation, downloading and funding cuts are designed to force cash-starved cities, hospitals, schools and universities to contract out and privatize services.

The government continues to be committed to the privatization of public services, despite public opposition. For example, we all know that both in Ontario and across Canada, Canadians and Ontarians will not accept a two-tier health care system, yet we've got Tony Clement, under the darkness of night, flying across to the UK to take a look at their disastrous health care system. I know about it first-hand. I've lived there and have seen it. Believe me, it's a shambles and it's nothing that this country wants to emulate, yet Tony flies across and he figures he can come back with some of the policies that destroyed the health care system in the UK. Just today and yesterday, your Premier was out front saying that he too would like to see an increase in the amount of privatization taking place in the health care system.

We believe privatization will inevitably cost taxpayers a great deal more as profits go into the pockets of individual shareholders. Privatization also leads to job loss and lower salaries and benefits. This province cannot afford to have more good jobs replaced by so-called McJobs. This province cannot afford to lose service quality because directors are paying attention to the bottom line. Privatization is bad for the average taxpayer, bad for workers and bad for Ontario's economy. Privatization is far more dangerous now because of globalization and trade agreements where it increases the danger of a foreign takeover of Canadian assets and services and increases the likelihood that large private monopolies will gain control, private monopolies that can hold the public to ransom. Instead of privatizing, we encourage the government to rebuild the public services that serve as the foundation of this province's prosperity.

Amalgamations, downloading and reduced-funding legislation, such as Bill 140, have created a crisis in Ontario's municipal sector. Right now, municipalities are relying on money from the OMERS pension plan. The 7% they've received in windfalls from the OMERS pension plan will soon disappear once the surplus is eaten up. That's going to place municipalities in a crisis when they try to find that additional 7% to pay pension plan contributions, which they have a break on right now.

Bill 140 prohibits municipalities, for example, from raising property taxes on the business community. This is grossly unfair to homeowners, who are now asked to share the complete responsibility for all the downloading: GO Transit, social housing, transportation and welfare are being picked up by homeowners. We cannot see the logic, for example, in having a taxpayer or a homeowner in the city of Toronto subsidize a commuter who gets on the GO Transit system in, say, Pickering and takes the GO Transit system out to Oshawa and somehow that's subsidized by the homeowners in the city of Toronto. That makes no sense whatsoever. It makes no sense that General Motors can lay off some of its workers in Oshawa, who eventually find their way on to the welfare rolls, and if you happen to live in the GTA or in the Toronto area, homeowners in that area pick up the costs for private sector corporations laying off their workers. That makes no sense. There have to be alternative revenue streams that are available to provincial governments, and we lend our voice to a lot of those people who are calling for a portion of the gas and the transportation taxes to be transferred into municipalities so that they can deal with the downloading created by this government.

Just recently, we had a report card on children released-in fact it was earlier this week-and it found that the infant mortality rate for the city of Toronto is 30% higher than in the rest of Ontario. The number of children on waiting lists for subsidized child care has grown to 1,400. The report found that poor children's health is declining because of a lack of affordable housing. Six thousand children are homeless. Despite all this, the municipality is considering eliminating a prenatal care plan that feeds hundreds of pregnant women, breakfast clubs that feed 4,500 children and a dental care system that serves 32,000 low-income children and seniors. This disaster can be directly traced to the lack of provincial funding.

We call upon the government to stop pressuring Ontario's municipalities to adopt contracting out, competitive bidding, public-private-sector partnerships and other forms of privatization.

In post-secondary education, Ontario has led the way among provinces in cutting funds to universities. Since 1990, funding cuts have led to a loss of 1,000 full-time faculty and 1,100 full-time non-academic staff. At the same time as staff has been cut, student enrolment has increased by a third. We now have larger class sizes, higher workloads for faculty and staff and reduced services for students. University libraries now buy 25% fewer books than in the 1970s, while journal acquisitions have been cut even more dramatically. In Ontario, tuition fees have more than doubled over the decade from an average of about $1,700 in the early 1990s to almost $4,000 in the year 1999-2000. The average student debt load for a four-year undergraduate program has tripled from $8,000 up to $25,000, and it continues to grow.

We would urge that the government restore public funding for the post-secondary education system so that students do not face crippling debt loads upon graduation. We'd like to see them freeze student fees and lower tuition. We'd like to see the government establish a fully funded student grant system and eventually move toward the elimination of user fees altogether, similar to what they've done in 14 OECD countries. Certainly in the place where I was born, which John is very familiar with, they've got free university education, which has contributed to the economic boom in the Republic of Ireland. That's a system we should be moving toward, not tuition increases which are depriving a lot of low-income families and families of modest income of the ability to send their children to a post-secondary institution. We should not be allowing the corporate sector, for instance, to take over our university assets through our SuperBuild fund where many dollars are being filtered into private sector-public sector partnerships, which again are driving up the costs of university tuition in this province.

In the health care area, we want to take a look at a couple of the problems. CUPE recently surveyed the front-line staff in chronic care and former chronic care facilities. Over half reported performing unpaid work and 79% reported the workload was hurting their health. Many staff reported patients who could not get out of bed or their wheelchairs due to a lack of resources. Not surprisingly, where the government had cut the funding, front-line staff reported even more problems with unpaid work, workload and patient care.

At the beginning of February 2001, the government was forced to recognize that its chronic care policy was not working. The government announced that four facilities in Toronto and Hamilton that it had planned to convert to long-term-care facilities would now remain open as chronic care facilities. While we appreciate the government has partially recognized its error, it continues to ignore similar problems elsewhere.

Take, for example, St Vincent de Paul Hospital in Bob Runciman's riding in Brockville. It is suffering from severe underfunding. Thirty chronic care beds in St Joseph's in Guelph are becoming long-term-care beds. In Ottawa and Windsor, whole facilities, like the Perley and Rideau Veterans' Health Centre and Malden Park, are being converted to long-term care with funding chopped in half. The patients are not changing; they just get less care.

The government must stop the conversion to long-term care, stop the cuts in chronic care beds and stop funding chronic care beds at an inadequate level. Clearly, what this means is, chronic care hospitals are funded at approximately $200 per day per individual in those chronic care hospitals. Moving into a long-term-care facility means those same patients will now receive approximately $100 per day toward patient care. Clearly it is not enough.

One I'm very familiar with is the community care access centres. We released a report in CUPE. If there's anything that particularly underscores the bankruptcy of the government's policy with respect to privatization, this has got to be it. Privatization of CCACs has taken $247 million out of the industry. It's a $1-billion industry right now. What we've discovered through our in-house survey of front-line workers, supervisors and patients who receive the care is that, for example, in most of the communities you've got 16 agencies now delivering home care. These agencies, each and every one of them, has a CEO-you've got senior managers, you've got a financial department, you've got a human resources department, you've got front-line supervisors, for all 16 of these agencies. Replicate that now across 44 CCACs across Ontario and you've got a disaster on your hands.

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This is the government that says it came to fix government, that says it came to eliminate red tape. You've just put a mountain of red tape into the home care sector of this province. You've completely privatized it. You've taken out of existence organizations like the VON, which have been delivering home care, say, in the city of Windsor for 75 years-one organization, one agency with one set of CEOs, one set of front-line managers, one set of senior managers and one set of financial officers. That's all it took to run the system. You've now given them 16 sets of all of those. You've duplicated it. You're taking money out of the system. Money that should be going into front-line care, into home care in all of our communities is now going off in duplication and in profits for each of these agencies that you've put into a competitive bidding model.

Plus, now you've got to have a monitor in place to make sure there is no fraud in the system, because the tendency is to start billing people in their homes inappropriately. There is one company that you gave the service to in Windsor, Olsten, which was sued by the American government for defrauding the American health care system of US$60 million. These are the folks who are now operating the home care system in Ontario. And there are no savings to be had. A quarter of a billion dollars is coming out of the system in waste, which should be redirected to the front-line system.

We would urge a complete overhaul of the competitive bidding model. We'd take a look at this duplication that you've built into the system; jobs for the Tory boys, the backroom boys. We say, get them out of the system. There is no place for the private sector in the delivery of home care in Ontario. If we take them out, we will save ourselves a quarter of a billion dollars a year. Let's put that where it should be put, into the front-line services.

In the area of pay equity, employers are expected to cover pay equity adjustments without additional funding from the government. Here again we're finding that female workers in child care centres, nursing homes and social service agencies are being denied legislated pay equity instalments because this government has refused to continue the funding of these monies. Several agencies may close because they cannot meet their pay equity obligations. We're finding this at the bargaining table time and time again, where women in particular are being forced to make a decision between maintaining their job or going after the pay equity increase which they're entitled to under legislation. This government is refusing to fund its pay equity obligations, and it's time in this budget that you recognize that these agencies are in desperate straits trying to meet their pay equity obligations, keep their doors open at the same time and deliver crucial services, such as the services for people with developmental handicaps.

The government should increase the funding for the front-line services for people with developmental handicaps. A typical wage in this area is less than $15 an hour. Workers in this sector have been undervalued and under-compensated for their work. Last year KPMG-no socialist organization, I can assure you-released a study that showed that workers in this sector earn 20% to 25% less than their counterparts in other sectors.

Burnout is increasing because staff are working at more than one job to make ends meet. Community agencies are having trouble recruiting and retaining workers. Agencies have been forced to close programs because they cannot find trained, qualified staff, because they won't work for less than $15 an hour. These are all post-secondary-educated individuals who won't work for that kind of salary. The study found that facilities are finding it increasingly difficult to maintain stable care because of the rapid turnover of staff.

This sector provides support for some of the most vulnerable members of our society and their families. We urge the government to provide agencies with enough funding to stop this crisis.

Finally, I just want to talk briefly about the environment. The government's Red Tape Commission's Web site features a cartoon illustrating what the government considers to be red tape: permits, audits, guidelines, certificates, rules, forms, investigations and approvals. We urge the government to put more money into "red tape" that can protect our environment: the water we drink, the air we breathe. Inspections, investigations and approvals are not red tape; they are necessary.

Municipalities should receive more money for water and sewage infrastructure. Polluters should be held accountable for the damage they do to the environment, and for the sake of our health and our children's health, we need to have proper protections put in place. You may call it red tape; we call it protection for the quality and the standards of drinking water in Ontario.

With that, I've finished my presentation and I'll be more than happy to take questions.

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

Mr Galt: Thank you for your presentation. It's obvious from your comments, I don't think we've been doing anything right in the last six years, but we keep trying.

I notice you didn't mention, and I think it's important to recognize, that this last year public service unions increased by an average of 2.5%, up from 1.9% the year before. That's the first time in a long time that the public service unions pulled ahead of the private sector unions. Last year it was 2.3% for the private sector and the year before it was 2.6%.

But in spite of the fact that you're telling us we haven't done anything right, we have developed a reputation of doing what we said we were going to do in the Common Sense Revolution and again in the Blueprint. We have been carrying those out and the public has had the opportunity to see what we were going to do. They really didn't quite believe that when we came out with the platform in 1994, a full year ahead of the election. They elected us and were quite surprised at the fact that we did do essentially what's in that platform. Again, we're heading pretty well through the Blueprint that we came out with in 1999.

If we were to follow the recommendations you have here, it would be basically the experiment that the Ontario government went through from 1985 to 1995, when the debt increased three times. As a matter of fact, in the early 1990s, that five-year term, the debt more than doubled and that was more debt than had occurred in the province of Ontario since the beginning of time.

In spite of all that, I have to congratulate you on putting your name on a ballot and coming out. You are very persuasive and enthusiastic in your position. You did put your name on a ballot and an awful lot of people are very reluctant to do that, so I congratulate you for coming forward in the 1999 election.

Mr Ryan: You talked about doing what you promised to do. I don't recall anywhere in the Blueprint or the Common Sense Revolution where you said you would ask the most vulnerable workers in Ontario to work a 60-hour workweek, for example. I don't recall anywhere where you consulted with people and said, "Your overtime will be averaged over a three-week period, where we'll take away overtime from people earning minimum wage and average it over a three-week period."

I don't recall your coming in and saying you would introduce privatization into the health care system, as you have done in the home care sector, for example. I don't recall your telling people that you'd cut the Ministry of the Environment staff by at least 50%, resulting in the crisis in Walkerton, the likes of which this county has never seen. I don't recall any of those promises whatsoever, Doug. You can spin it as you like about "We did what we said we would do."

You said you would get red tape, for example, out of some of the systems. As I've indicated to you, you've introduced a mountain of it into home care facilities, resulting in a quarter of a billion dollars a year being siphoned off to your friends in the private sector. I don't recall your saying that to anybody at all in the system.

In terms of wage increases that you say we may have received in the last year, I will remind you that in the public sector we have taken wage decreases for the last 10 years. When you factor in inflation, over the last 10 years there have been no wage increases whatsoever; when you factor in inflation, instead we've taken a decrease.

So now we're seeing an increase for the first time in 10 years, averaging about 2%. This was about the time when the Tories tried to introduce a piece of legislation giving themselves a 42% wage increase for that same period of time.

Mr Galt: There's been no increase.

Mr Ryan: You may not have supported it, but you did do it. You tried to get away with it until the public outcry forced you away from doing it.

I do appreciate your comments about putting my name on the ballot. I got my butt kicked, but hey, it was a lot of fun.

Mr Kwinter: I'm tempted to refute some of the things Dr Galt said about them carrying out their plans, because there's a whole range of things that were never mentioned in the Common Sense Revolution that you immediately implemented and now you're backtracking on, things like, "We will not provide amalgamations unless people want them." That had no impact at all on what happened in Toronto. You said, "This is it; too bad." Even though over 75% of the people in a referendum said they didn't want it, you still went ahead with it.

Having said that, earlier in these hearings we talked about the community care access centres. I mentioned a situation in my riding where the operators decided to terminate a contract they had and the sole criterion was the bottom line. I mentioned to the committee that I'm caught in the middle. I have been getting calls from the providers, who have been told that the contract is terminated and they're out of a job, and I'm getting calls from the patients, who say, "I had this wonderful relationship with my health care provider and now they tell me that they're no longer going to be servicing my needs because someone else got the contract." That was last week.

1720

I thought this was something that would sort of pass over. If anything, it's gotten worse. Because I have been in on these hearings-and, as you can see, most of the time I'm here by myself-I go back to my office and the pile of pink telephone call slips keeps getting bigger and bigger. Every time I go through them, 80% of them have to do with this one issue. If this is an indication of what is happening and what is going to happen with the privatization of some of these services, where patient outcomes are of no concern-it's really, "How can we make the most money?"-then we have a problem. I know you probably agree with me, but do you have any comments on that?

Mr Ryan: I'll get you a copy of the report we released, because it's chockablock full of stories similar to what you were just talking about.

I'll give you an example. What happened essentially is that under the NDP government you had the MSAs, the multi-service agencies, which was essentially one-stop shopping where you had one agency, for all intents and purposes, delivering all of the services, and they could coordinate the visits.

Today what they do is they take the service-it very well may be drawing of blood-and they will hive that off to one of the private sector companies. Somebody else will have the contract for providing home care services. Somebody else will have the contract for therapies, whether it be massage therapy or whatever. Before, it was all done in-house by one group of folks. Now you'll have two or three people making home visits to one individual.

One of the stories we found out last week was the drawing of blood. One has a contract to draw it intravenously; they put a tube in the arm and it can be drawn out on a regular basis. Other folks have a contract for drawing blood directly, right from the arm itself. We had a supervisor sitting in a home who said he was not qualified to draw blood from the arm but he could draw blood from the intravenous feed in the arm. So the supervisor made a 40-kilometre trip to the home. One of the employees made a 40-kilometre trip to the home. Neither one of them had the contract to transport the blood from the person in the home back to the CCAC to send it off to the facility to have it tested. When you add up the time lost, the duplication, you can see where we come up with this whole $247 million.

There are numerous stories of front-line workers like that. Ordering of supplies, for example: now they cannot talk to the supplier. In the past, the front-line worker, the RN or the RPN, was able to call directly to the suppliers to get precisely the materials they needed. Now you have to call the agency that you work for. The agency has a requisitions department. They call the CCAC. The CCAC checks back with the employee to make sure that this particular material is needed. They call the supplier. The supplier invariably sends out the wrong material. It travels all the way out 40, 50 kilometres to the home care worker. They get it; they see it's the wrong material, not what was requested. So the cycle starts all over again. That's duplicated, they say, on a regular basis throughout the system. So the system is a shambles. It has to be completely reformed.

The Chair: I have to go to Mr Christopherson.

Mr Christopherson: Thank you, Sid, for your presentation. I'm sure you've read the paper this morning, where the Premier said that any ministers who have spending pressures that they want to bring to cabinet had better have offsetting cuts within their own ministries.

Leah Casselman was in earlier on behalf of OPSEU, and I asked her the implications for communities like mine in Hamilton and others. I know you travel just as extensively across this province as any member of the Legislature, arguably more often, because your job is to be out there and you don't have to be here.

I'd like to get your sense of what it means for, in particular, municipal services. One of the reporters asked me that: "What's the impact on local services?" My sense of it-I mentioned and I went on at great length about health care, but education is the same way. They're all under tremendous pressure just to meet existing circumstances, never mind start moving into the investment end of things of where we ought to be. They need new money just to hold their own, which is, as I say, already somewhat back from where we should be.

What could anybody who is watching or who reads the Hansard expect, in your opinion, if the government on the ground, in our communities-it's what I call kitchen table economics. What can they expect in their communities if indeed these ministers start to put forward new expenditures just because they absolutely have to, but are making corresponding cuts? What are the implications for the average person, their family, their neighbourhood, their community?

Mr Ryan: We're actually beginning to look at this problem. We're taking surveys of all the sectors where cuts have been implemented. We've done school boards, children's aid societies, associations for community living, and people who deliver the workfare program, welfare workers. We've measured the impact of the cuts on those individuals with respect to their health personally with massive increases in stress, which is not compensated because the Tories removed chronic stress from workers' compensation, from being compensable-people going out sick, headaches.

Recently we had one of our social service workers in court being charged with failure to conduct her job in an appropriate manner. She managed to get cleared of the allegations, but the workload resulting from changes the government has made-some of it good, by the way, Doug. There were some changes around children's aid and reporting of children at risk of abuse, and that was positive. But it increased the workload tremendously because there are a lot more calls coming in now where doctors and teachers and nurses and public health officers have a greater responsibility to report.

Workload is really, really a problem. For example, in the education system in the early 1990s, for children with special needs, we had one on one. We had educational assistants whose job was to deal with those children with special needs one on one. Now it's one on four. So it's four children with special needs to one educational assistant. Clearly, they cannot deliver the same quality of service as they were in the past. This is the implication and the fallout of funding cuts.

Now we're beginning to measure the fallout on the individual person delivering the public service, and it has taken its toll on health. We had a special conference just last weekend in CUPE, a workload conference. We brought in international speakers to examine this phenomenon, which began about five or six years ago but is now manifesting itself in illnesses and sicknesses and people not reporting for work. So it's a huge problem that we're experiencing and I think we're going to see more of it if there are more cuts in the future.

Mr Christopherson: I just want to say and get it on the record that every labour leader or economist that spoke for their unions, every one of them, has raised the issue of the minimum wage. I just want the record to reflect that there's no political benefit to any of these labour leaders, because none of the people who are affected by minimum wage can vote for them. The only people who are coming in here and speaking about minimum wage needing to be increased are the elected officials and staff of unions, and that's to your credit, all of you.

The Chair: With that, I have to bring it to an end. Thanks very much on behalf of the committee this afternoon.

Mr Ryan: Thanks a lot.

The Chair: We've been informed by the Ontario Forest Industries Association that they will not be making their presentation this afternoon. They have cancelled. I guess that brings our hearings to an end. However, there are a few items of business.

First of all, I would like to thank the staff and the committee members for their co-operation during the past eight days. I think for all the members and the staff it's been quite demanding, but I certainly appreciate all your co-operation.

Mr Christopherson: On a point of order, Mr Chair: I don't do this lightly because you and I have crossed swords before, but I just want to put on the record that you've done an outstanding job of chairing. You've found one of the best touches I've seen between being able to keep us on track and yet still finding that 30 seconds to let people wrap up or make a comment.

It's a roundabout shot at you, Doug, but I would have done this anyway, because I think you could have done that. That's not why I'm doing it. It's to compliment Marcel. Really, you kept us on time and you didn't really have to elbow anybody in the face to do it, and that's a real trick. I just wanted to compliment you on that. I agree with you that the staff has done a tremendous job.

I also, while I have the floor, want to reflect in the Hansard that OSSTF has responded to the response of research, and I would expect this will be a kind of ongoing thing. But I do want the record to reflect the fact that they've noted what they consider to be-how best to phrase it? Let's just say they approach the calculation differently and I think are still arguing that their stats hold, notwithstanding certain members' attempts to portray it otherwise.

The Chair: Thank you very much. I guess the next step is that by March 19 the research officer will deliver a draft copy to all the committee members. I have no say over this, but it looks like March 22 will probably be the day that we'll have an opportunity to discuss the draft report that will be circulated on the 19th.

Any further comments? If not, thank you very much and we're now adjourned.

The committee adjourned at 1730.

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