Committee Documents: Standing Committee on Public Accounts - 2013-Apr-10 - Committee business

Committee business
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Wednesday 10 April 2013 Mercredi 10 avril 2013




The committee met at 0830 in room 151.


The Chair (Mr. Norm Miller): I’d like to call this meeting to order, and begin by welcoming Deputy Auditor General Gary Peall, who’s sitting in with the meeting today, and also Lorraine Luski, who’s filling in for Ray McLellan, who apparently is under the weather today. Welcome, Lorraine.

There is a pile of documents before you, and that is: There’s a response from Carole McKeogh to the inquiry from Mr. Klees; that’s one of them. There are two legislative research documents; there are three responses from the Ministry of Finance; and then the rather large bundle, of which there’s one per caucus, is the latest Ornge bank statements for your information.

We’re going to begin this morning with a motion which Mr. Klees will move. Mr. Klees?

Mr. Frank Klees: Thank you, Chair.

I move that the Auditor General of Ontario commence an immediate review of the Ontario Lottery and Gaming Corporation (herein referred to as the “corporation”) into the following:

1. Whether the corporation has employed or is employing a clear, consistent and transparent process for tendering, contracting and planning for any and all new or proposed casinos, gaming facilities, bingo halls, online gaming and lotteries throughout Ontario;

2. Whether the host-city-payment formulas for casinos or other gaming facilities are clear, consistent and transparent across the province and whether any special, secret or one-off deals are being negotiated between different municipalities for different reasons;

3. Whether provincial or local revenue projections and local economic impact assessments for new casinos and other gaming facilities have been undertaken and are clear, fair and transparent;

4. Whether the province and/or the corporation has adequately taken into consideration community impacts on mental health and/or addiction matters related to the implementation of the new “modernization plan”;

5. Whether the impact of cancelling the Slots at Racetracks Program on Ontario’s horse racing industry was measured and whether certain communities have been impacted disproportionately as compared to other communities and if the Liberal government’s decision to end the program will be offset by the changes in the new modernization plan;

6. Whether the province or the corporation properly consulted or consulted various industries, businesses and municipalities impacted by the cancellation of the Slots at Racetracks Program, and did the province or the corporation assess the economic impact on said industries, businesses and municipalities and factor that into their decision(s); and,

7. The province or the corporation has conducted a broad enough consultation process to ascertain whether or not new casinos are welcome in various communities throughout Ontario.

The Chair (Mr. Norm Miller): Thank you, and I believe the Auditor General would like to make a comment before we start that discussion.

Mr. Jim McCarter: Yes, just a couple of comments for the committee to take into context in their discussion of this: a couple revolve around the wording. One of the things we noticed: I know initially when we were discussing this—I’m aware of the private member’s motion in the House. The focus is on the proposed casinos, the gaming facilities and the racetrack issue. This motion would take us, really, into everything that lottery does: the bingo halls, which is really part of alcohol and gaming; it would take us into the online gaming and all the lotteries throughout Ontario. That would expand the scope of the work fairly significantly. I just want the committee to be aware that if the bingo halls, the online gaming and the lotteries were in there, it would take us longer to do the work. But I would leave that to the committee’s decision.

The only other thing I would mention in the wording of the motion is, for us to go into all the municipalities and try to ferret out any special, secret or one-off deals, that would also be—how could I put this?—challenging to do and would be time-consuming. Again, whatever the committee directs us to do, we will do. I just put that on the floor, that those two items would impact how much time it would take us to do the work.

I notice in the wording of the motion, it does talk about commencing an “immediate” review. As the committee knows, we’re currently undertaking two specials right now. We’re doing the Oakville power plant and we’re also doing the work at ONTC, the divestiture at ONTC. Our plate is fairly full right now. If the committee wanted us to start this immediately—I guess the best way to put it is, the way things are now, given the summer workload that we have, wrapping up all of our value-for-money audits and the two specials that we have, unless the committee wanted those deferred, which I doubt, we’d probably start this up in the early fall as opposed to immediately.

If the committee’s strong preference was that we do start this up immediately, just to advise the committee, what we would do is we would actually cancel one of our ongoing value-for-money—well, “cancel” is maybe the wrong word. What we’d have to do is postpone one of the value-for-money audits that we’ve got going right now that we would be reporting in December 2013. I think what we would do is we would basically stop that audit, and to start this up immediately, we would have to defer reporting that audit until 2014—if the committee wanted us to start that immediately.

The Chair (Mr. Norm Miller): Thank you.

Frank, did you have some initial comments?

Mr. Frank Klees: Yes. Auditor, thank you for that. You know, there’s a reason that we’ve included both the online as well as the lotteries. I understand the additional work that would be involved here, but I think this is incredibly important. It goes to, really, the core of what is happening, from our perspective, behind the scenes. There’s such a lack of transparency to what is going on here, and the seeds of doubt have been planted. I think it’s our responsibility as a committee to ensure that we get to the bottom of what really is there. If our concerns are unfounded, then that really is what we would expect you to confirm for us.

In terms of the urgency, for the reasons that I have just indicated, we certainly believe that this is something, Auditor, that should be taken on immediately. As much as we don’t like to interfere with the momentum of your work, we do think that because of the timeliness of this issue, it’s something that should be clarified.

That would be our position, Chair, and I look forward to comments from other people.

Mr. Jim McCarter: Maybe I could just advise the members too that under section 17 of the Audit Act, while we shall perform special assignments, such special assignments shall not take precedence over our regular duties. So to be honest, we could say we’re not going to start it up until the early fall anyway under section 17, but I think if the committee wants us to start this up immediately, I just want to advise the committee of what we’d do. We would start it up immediately and we would just postpone—we would pull out one of our current value-for-money audits. We would do it, but we would report it a year later.

Mr. Frank Klees: We appreciate that, and that’s why I leaked to the press that you’re deferring your retirement as well.

Mr. Jim McCarter: Hopefully there’s no press in the room today, as I look around.

Mr. Frank Klees: Thank you.

The Chair (Mr. Norm Miller): Thank you. I do have a list of people who want to speak, starting off with Mr. Barrett.

Mr. Toby Barrett: Thank you, Chair. Just further to this, my perspective as an elected representative—and that goes for those of us on both sides of this table—just specifically with section 5 of this motion, the impact on certain communities. I represent a rural area, and what’s reflected in my rural community—for example, there’s something like 960,000 horses across Canada, well over 200,000 in Ontario. Some 45,000 horses are active in the horse racing sector alone, 58% in the province of Ontario. Over the last 14 years, Ontario’s horse industry has grown to be a world-class industry. There’s 60,000 people employed—or at last count; there’s dramatically fewer now, I’m afraid, in some parts of the industry.


We’re world class. Last year, my son and I spent some time in Kentucky; we attended opening day at Keeneland. That’s coming up in another week or two, I think. Down there, they know about the Ontario horse racing industry. Just further up the road—I think it’s Interstate 75—there’s the Kentucky Horse Park. For years, they’ve had a bronze statue of Northern Dancer. These are thoroughbred horses, not standard bred. Last year the Kentucky Derby was won by a Canadian horse called I’ll Have Another. At the recent London Olympics, my riding of Haldimand–Norfolk had a representative. It was a horse called Exponential that did very well in the Olympics.

I’m just putting this out as an elected representative. We know how busy this committee is. I know we deal with numbers. But as an elected representative, the horse alone and the industry it supports are very significant, but there’s also what I see as an elected guy: the emotional part of that.

I recently saw the film War Horse. When I talk to people about that film—that was derived from the play War Horse. It’s something that is very important to a large number of people in Ontario, emotionally, economically and socially.

The Chair (Mr. Norm Miller): Ms. MacLeod.

Ms. Lisa MacLeod: I want to welcome the auditor for coming. I know I’ve been a bit of a burr in his saddle for the last several months. I deployed my own war horses Bob Runciman and Norm Sterling on him on a couple of occasions after the House supported my motion to have the auditor review not only the Slots at Racetracks Program but also OLG’s expansive gaming.

For a number of reasons, I have some very serious concerns about the OLG. Many people know I’ve spent a lot of time talking about fiscal conservatism and accountability. I get worried when I see that OLG lost $45 million at three of its casinos in 2010—in their annual report—at Windsor and Niagara. I think that the taxpayers of this province deserve to know how that money is being spent.

I’ve made no bones about the fact that I support the people of my community of Nepean–Carleton, particularly those at Rideau Carleton Raceway. I know my colleagues the two members from the city of Ottawa have people who are interested in preserving the Rideau Carleton Raceway. That’s 1,000 local jobs in our community, but it’s also the horseman in Navan who is feeding hay in to the farmers, or it’s the big animal veterinarian in Russell who may not live in my riding but requires that the racetrack is there. I’m really concerned about the job losses that OLG is going to bring upon my community and others if there are no deals, and the uncertainty that that has brought.

I’ve made no secret of the fact of my great disdain for the OLG’s expansion plans because of its impact on mental health and addictions. I had the experience growing up in Nova Scotia to see that expansion occur in that province, to see what toll it takes on families and communities. I don’t want that to happen in the great Ontario.

Of course, I would have to be putting lots of cotton batting in my ears to ignore the concerns raised by not only the horse racing community but others with respect to the bingo halls and the expansion by a certain group in the province on the bingo halls. Those folks, of course—and I know others may want to expound on that. My colleagues from Lambton–Kent–Middlesex and Essex may also want to bring up the fact that we’re very concerned that there might be something that this province may not exactly appreciate there. Again, I think it’s really important that we continue with this motion in its entirety for those reasons.

Just one other thing I’d like to say with respect to the speculation in the bingo halls: Right now, a lot of those are done for charitable purposes. I really don’t know if the province of Ontario wants to allow charities to be overtaken by a private company when those charities are helping us do work that needs to be done in our local communities, and at the same time help millionaires make a little bit more money.

And just one final point on horse racing—and I just want to acknowledge my friend Paula Peroni from Sudbury, who is here. She’s been a real champion of her racetrack in Sudbury. And, of course, Brian Tropea, who is here on behalf of OHHA.

Horse racing in this province does more than just run horses around a track. It is Wyatt McWilliams of Navan, who keeps his farm because he provides the hay and that helps him pay the bills.

It is my friend Garry McDonald, who came from Newfoundland to set up his life in Ontario and started a business, as he continued to train and race, and who could lose his home.

It is the Ontario equestrian association, which is able to have some of the best equestrian competitors in the world go to the Olympics because our horse racing industry helps subsidize that industry, whether that’s from the volume of our horses in the horse racing industry, on feed, on big animal veterinarians, on horseshoes.

There is a widespread impact on OLG’s decision that was put forward by the Liberal government, a government that didn’t explore the problems and the challenges that our communities were going to face; other industries, how they’re going to face it; how municipalities are going to deal with a major employer leaving their community.

You cannot put in front of this House in an omnibus budget, in a budget that dealt with several other issues, the destruction of an entire industry in one rural community after another across this province.

There’s a great economic impact. I would say it’s probably a multi-billion-dollar problem that we have in this province. It will impact tens of thousands of people. It will slaughter 13,000 horses. It will bring casinos into downtown communities across this province where people do not want them, where health experts tell us there will be challenges.

I will make no apologies for opposing OLG’s expansion plans, and I remain as committed to having the auditor review them as I did last August—when this House backed my call for that.

I want to, first of all, thank my colleagues in the Ontario PC caucus, and I’d like to thank the members of the NDP caucus who have supported us, and I would like to thank the members of the Liberal caucus who stood up with us because they knew that this was wrong.

Auditor, I think it is important that this is done. This radical shift in gaming has not only financial impacts but it has health and addictions impacts as well. That needs to be reviewed, otherwise this assembly would not be doing its job.

Thank you very much.

The Chair (Mr. Norm Miller): Mr. McNaughton?

Mr. Monte McNaughton: Great; thank you very much. I welcome the auditor to this committee as well.

I would like to speak in support of this motion that my colleague Mr. Klees has brought forward. I was asked 13 months ago to take on the issue of horse racing on behalf of our caucus. I proudly visited many communities across this province and almost every racetrack in this province within those 13 months.

After listening to people across the province, we know—it’s been very well publicized—that 60,000 people work in Ontario’s horse racing industry. Near the riding and in the riding I represent, Lambton–Kent–Middlesex, there are 13,000 people who work in the horse racing industry, in southwestern Ontario—a very important part of the economy of rural Ontario and the economy of Ontario in general.

In April, I introduced a referendum bill that was passed in the House, first reading and second reading, supported by the PCs and the NDP as well, including six Liberals who supported my bill. The reason why I introduced my bill is because I was seeing how the OLG was unveiling their modernization plans. Everything is being done under a veil of secrecy in this province. They’ve pitted community against community. They’ve divided municipal councils across this province.


We’ve seen recently two problems with the government’s approach and the OLG’s approach to this modernization: first, a couple of weeks ago, when the government was caught with the OLG making secret deals to the city of Toronto. In fact, one figure that was used was that Toronto was going to get $50 million in hosting fees. Under that formula back then, in order for the city of Toronto to get $50 million, that one casino would have to have more people gaming there and more sales and more slot revenue than the entire Las Vegas strip. So it was just impossible. They’re throwing out figures and, again, doing everything under a veil of secrecy.

Secondly, as some newspapers were reporting a few weeks ago, the OLG is now paying international companies to bid on their lottery business. This is a part of the OLG’s business that makes billions of dollars. In the free market, you don’t pay companies to bid on businesses. So those are two examples of the problems that are happening with this modernization.

I think, more than anything, that the devastating impact on Ontario’s horse racing industry has to be just the most important focus of this review. It has just been devastating for these families and for the businesses involved. I’ve heard so many stories of the personal tragedies of people just not knowing what they’re going to do in the future. The race calendar isn’t even set yet for 2013, so I think that’s devastating.

I’ll leave it at that and just thank you for being here today and for reviewing this.

The Chair (Mr. Norm Miller): Ms. Jaczek?

Ms. Helena Jaczek: Thank you. Being relatively new to public accounts, I just wanted to ask the Auditor General a little bit more about the scope of this. In your introductory remarks, you had alluded to the fact that this obviously goes beyond the OLG. In terms of your mandate, is conducting an audit such as Mr. Klees is proposing with this motion something that is within your mandate, or is it unusual? Have you often done things like this?

Mr. Jim McCarter: I think I would say that it’s probably within my mandate. The other thing I would say, too, is that when the public accounts committee expressly directs me to look into something, I would probably take the view that it would have to be clearly, clearly black and white outside my mandate for me not to do it. So my sense is that when I get a direction from the Standing Committee on Public Accounts, quite frankly, I would probably move heaven and earth to try to comply with that specific direction.

The only reason I mention these other items is that I just wanted the committee to be aware that some of these things would extend the scope of our work and it would take us extra time. As you can see, this is quite a comprehensive motion, and it would take us a fair bit of time to do. But having said that, as I indicated, we will do our utmost, even if it means deferring one of our ongoing audits, to start this up immediately, given that the motion says “immediate.”

My intention was just to make sure that the committee was fully informed of the impact that it would have on our office. But having said that, should the motion pass, we will do the work, to the best of our ability, as set out in the motion.

Ms. Helena Jaczek: Right. Looking particularly at the motion—and I’m looking at section 4, which is certainly something that is of great interest to me in terms of the impact on mental health. In my previous life as a public health physician, this is something that certainly concerned me. I’m wondering: Could you give us an idea of how you would explore that particular provision?

Mr. Jim McCarter: There’s certainly some judgment involved because of the words “has adequately.” I suspect, to some extent, it would be a little bit in the eye of the beholder, as is much of the work that we do, as far as: Did they adequately take into consideration? We would look to see, basically: Had they done any research? Had they looked into any best practices? Had they looked into what other jurisdictions had found? Had they done some homework to see whether there was any impact?

I think the OLG probably does recognize that there is a downside to casinos and gaming. They do have programs in place. I’m certainly familiar with the casino; they have some programs in place. So I think essentially what we would do is look at that and say, “Did you do your homework in that area, and was that taken into consideration?”

Ultimately, the board of directors approves things. It’s also very important to me, in looking at this: Were these various factors communicated to the board of directors, so when they made the decision, they were making a fully informed decision? Those would be some of the things that I would be looking at.

Having said that, it’s a little bit in the eye of the beholder, what is “adequately.” But those would be some of the things that we would expect to see when we went into the OLG and looked at that particular area.

Ms. Helena Jaczek: So I suppose for number 7, there would be a similar difficulty, perhaps, a judgment call on what is “broad enough.”

Mr. Jim McCarter: In a number of these things clearly there would be some judgment involved. Again, it would be up to us. Sometimes, doing a lot of our audits now, we do engage some outside expertise in a particular area, and this could be something on which we might engage some outside expertise. Generally, we try to engage that expertise outside the province, very often in the United States, so we make sure it’s independent. Sometimes we bring that sort of expertise to bear, too, where you’re getting into issues of a “broad enough” consultation: Was it adequate?

I also notice the words “consulted” or “properly consulted.” Again, when you’re getting into some of those things, there is some judgment that is going to have to be applied when we’re assessing that.

Again, we do try to be reasonable. What’s reasonable in the circumstance? I mean, you can consult forever, but then things would take forever to get done.

We would be trying to bring a balanced perspective when we’re looking at that. In the report, I think we would lay out, “Here’s what our conclusion was; here’s what they did,” and sort of, “Here’s our rationale” on why we feel either it was enough, was reasonable, or, quite frankly, we felt it was inadequate.

Ms. Helena Jaczek: Certainly from our perspective, from the government side, we are just as interested in a number of these questions as the two opposition parties are. But we would like to actually add a couple of provisions as well, so whenever you feel it appropriate, we could suggest some additions to the motion.


The Chair (Mr. Norm Miller): We’ll debate the main motion and then, if you want to make an amendment to it—

Ms. Helena Jaczek: I know the Clerk knows how these things are done. If that’s the correct way, thank you, Chair.

The Chair (Mr. Norm Miller): Okay. Mr. Natyshak?

Mr. Taras Natyshak: Thank you very much, Chair, and thank you, Mr. McCarter, for your counsel on explaining what the scope of this motion would mean to your office.

But I would echo the sentiments by Mr. Klees in terms of the sensitive nature of what this motion would deliver in terms of information, as well as the need for immediacy, to get on to it right away. One of the reasons is that some of the answers that we anticipate out of this motion have never been given. The rationale for dismantling the Slots at Racetracks Program has never been provided to the Legislature. We’ve never had an economic impact study. We really don’t have any answers.

The current modernization plan is being done under cloak of secrecy, and deliberations are happening in private. Not to add to your workload, but I will be proposing two amendments to the motion that I believe actually should be quite easy for you to obtain or ascertain, given the amount of data that I think you’ll compile while looking into the other sections of the motion.

Chair, with your indulgence, I’ll move my amendments to the motion right now.

The Chair (Mr. Norm Miller): We have one more person who wants to speak to the main motion; then we’ll deal with the amendments.

Mr. Taras Natyshak: Okay, very good. Thank you very much.

The Chair (Mr. Norm Miller): I’ll come back to you for the amendments.

Mr. Taras Natyshak: Sounds good.

The Chair (Mr. Norm Miller): Very well. Mr. Clark?

Mr. Steve Clark: Thanks very much, Chair. Thank you for giving me an opportunity. I appreciate the fact that there will be a number of amendments put forward.

I just want to say I appreciate the comments from Mr. McCarter. I think we made, as a Legislature, even in a minority situation, a very clear mandate, both with the support from Mr. Natyshak’s motion and the support for Ms. MacLeod’s motion, that information, as is in this motion by Mr. Klees, is so important for the committee to discuss.

I’m very concerned about the OLG modernization, not just because of my close proximity to Ms. MacLeod’s riding and the Rideau Carleton Raceway and the impact on the horse racing industry within Leeds and Grenville, but also this ridiculous pitting of community against community that I’m facing in my riding, in our existing casino, Thousand Islands. To me, it’s mind-boggling that a government would extract a casino from one community with a clear 10-year record and move it into another community that 10 years ago had no interest in gaming whatsoever.


I just don’t understand how we got to this point. I think we had a clear indication from all parties with Ms. MacLeod’s motion that we wanted the Auditor General to look at this. I think it was very clear last week with Mr. Natyshak’s motion, and I do believe that all three parties should put their cards on the table—no pun intended—and let’s move on. Thank you.

The Chair (Mr. Norm Miller): Thank you. Mr. McNeely?

Mr. Phil McNeely: Thank you, Chair. One of the concerns I had with the presentation that was made by the member from the riding that has the Rideau Carleton in it—that’s certainly somewhere over the last 50 years where I’ve left a little bit of cash, and I’ve enjoyed that in our community; it used to be in my riding.

When you come in with that information—there has been a lot that happened since that started. There was a three-person committee; Wilkinson was one of them, but there were two others on it. We’ve had some agreements made with certain racetracks. I think bringing this in at this time is—we need more background to see if this takes over what the Auditor General is doing when we have so many important things to do. We’re right in the middle of several projects that he has undertaken. I’d like to see the background, because the information I heard is not where we are today. We should be looking at that three-member committee. We should be looking at what has happened since then. We should be discussing what’s going to happen. I think this is the wrong time to bring this motion in. You take the major issue off the newspapers and you have a new job for the Auditor General. I don’t think that’s the proper way to go, and I would certainly think it’s premature to make any decisions on this today.

As my cohort here said, we would be making amendments to it if that’s the direction where it goes, but let’s have more time to see where we are today. It seems to be around racetracks, a very important industry in this province, one that I’ve certainly supported on many evenings. But let’s get up to date on where we’re at. Let’s not have these figures coming out—the mental health thing will be coming out. Let’s look at it carefully and give the members of this committee time to see if this is a priority. Is it a priority for the province right now? My comments are that it’s premature. We have to look at it, and we’ll want time to look at amendments to this if it does proceed. I think that to take it to that stage this morning is not the proper way to go. It’s a complex problem, and we’ve got a mishmash here. It’s got enough work for you that you may have to come back from retirement for two or three years to get through all the elements of this. My comments are that I don’t think we should be making a rash decision to change your workload at this stage. Let’s have some time to look at this.

The Chair (Mr. Norm Miller): Ms. Gélinas.

Mme France Gélinas: I will agree that time is of the essence, but I press the auditor to move on this as quickly as he can. He has put forward scenarios where he would be able to do this work, and maybe that would mean that one of your scheduled audits would be postponed until next year.

I can tell you that I have a racetrack in Nickel Belt. I see the for-sale signs going up on so many of the farms in Nickel Belt. Part of the riding where the racetrack is has a flourishing agricultural industry because of the horses. It is hard to grow anything but hay in Nickel Belt because of where we are geographically. If there are no horses, who will eat the hay? It makes it really, really difficult to sustain agriculture once the racetrack is gone. When I hear Mr. McNeely talk about their having deals—there is no agreement for northern Ontario. There will be no more horse racing in northern Ontario.

Time is of the essence. I have at least 200 families that have come to me. Those families have little kids; they have mortgages; they have car payments; and they don’t have jobs anymore. To me, this is of essence. As my colleague said, we do not have answers as to why. What is the monetary impact of this decision? And you are an independent third party that people trust. If you come back to us and show us that this is a good financial deal, nobody will argue with your findings, because we trust your office.

Right now, what we have, I agree, is a mishmash of information. Some of it is factual; some of it we can’t find where it comes from. But in reality, you have real people with real jobs, with real families, with real payments to face who suddenly don’t have a job because there won’t be racing in northern Ontario anymore because we haven’t got one of those agreements. But we are living the consequences of it. So when the motion says, have some “communities been impacted disproportionately as compared to” others by those decisions, please do come to Nickel Belt and see the impact that this is having on the economic viability of Nickel Belt. We trust that you’re able to do this.

I was listening very intently when you talked about how we’re putting more and more on your plate. I’m cognizant of this, but I’m also cognizant—I’ve been on public accounts long enough to know the quality of the information you gave back to us. All this put together, if it is the wish of the committee that this motion move forward, and it certainly is my wish, I hope that you will do it as fast as possible. We need those answers if it is to help us turn the page or help this province go in a completely different direction, if need be. I trust that you’re able to give us those factual answers.

The Chair (Mr. Norm Miller): Just to bring to the committee’s attention that at 9:15 we do have a witness scheduled from the Ministry of Health and Long-Term Care and the Ministry of Finance to deal with the confidential documents and discuss that, so the committee has a choice. Remember that this afternoon we are going to be making a site visit to Ornge, so we won’t be able to continue the discussion and various amendments on this motion this afternoon. The option would be that we keep talking and perhaps have a vote before 10:25 or we defer this discussion and continue it next Wednesday.

Mr. Frank Klees: Chair, I would suggest that we continue this discussion. I believe there are some amendments that we should be considering and we should get on with that. We apologize to the representative from the ministry, but I think that we can always ask him to come back.

The Chair (Mr. Norm Miller): Okay. Seeing as we will continue the debate then, Ms. Damerla.

Ms. Dipika Damerla: Actually, I was rather hoping that we could discuss this later and listen to the witness, who has obviously scheduled his or her time to come here, but that’s up to the majority of the committee. We can always continue with this discussion later. I don’t see the point of making somebody who’s here go back and make them come back. That’s my view.

On the other issue, I did want to add to what Mr. McNeely was saying, which was that a lot of these changes have been just given to us this morning and we’d like some more time to deliberate and add our own changes. I’m not entirely sure what the rush is that this needs to be finished this morning and we need to reschedule the witnesses, why this cannot be taken up at the next time we said. I’m just wondering why this has to be taken into consideration this minute, why we can’t deliberate on this more, why we can’t stick to the schedule and listen to the witnesses who are going to come forward, and do a more thorough, I guess, examination of exactly what you want and the changes we’d like so that we can all talk about this and then figure out a way forward.

The Chair (Mr. Norm Miller): Ms. Jaczek?

Ms. Helena Jaczek: Yes. I would say I find it easier to concentrate on one thing at a time and we’re talking about this motion, so I’m happy to continue to do that.


Just in terms of my own riding, Oak Ridges–Markham, we have a thriving horse industry and, just like many members of this committee, I’ve heard loud and clear about what the changes potentially can mean. As Mr. McNeely has said, of course, we’ve taken a number of mitigation measures.

What we would like to add—and I guess, again, it’s a little bit within the scope, but as the Auditor General has clearly said, if it’s the desire of the committee, he would be prepared to address the issue. We all know that we’re in a deficit situation, that we have a fiscal imperative to, obviously, balance the budget and to cope with that situation.

One of the areas that we would like to explore further is the fact that—was cancelling the Slots at Racetracks Program a sound public policy, given that the government’s fiscal plan is to balance the budget by 2017-18? I understand the opposition parties are in accord with that desire to balance the budget, so we would like to expand the mandate and the scope of this motion to ask the auditor whether he can judge—


Ms. Helena Jaczek: We will be getting it in writing. I don’t know if it’s the formal time to make that; I was just wanting to add to the discussion, again, in terms of the Auditor General—

The Chair (Mr. Norm Miller): Sure, but to save time, perhaps you could get someone working on writing it up?

Ms. Helena Jaczek: We are.

The Chair (Mr. Norm Miller): Then we’ll continue the discussion.

Ms. Helena Jaczek: Yes, absolutely.

The Chair (Mr. Norm Miller): Okay, very good.

Mr. McNaughton?

Mr. Monte McNaughton: Just for clarity: It’s important that we proceed. I actually take offence to what my colleague across the aisle said. We’re pushing for transparency here. There are secret deals going on all across the province. We know there was a secret deal with the city of Toronto for their casino. The government got caught. We started asking questions in question period. They got caught; they backed off of that deal. Now they’re back to the drawing board.

This whole modernization, as I said originally, is being done under a veil of secrecy. It’s no way to run a government organization. We know, because of previous reports from the Auditor General, that there have been problems with this organization over the last 10 years.

Secondly, the reason why it’s important that we proceed is because there are 60,000 jobs at risk in Ontario because of the government’s decision to pull the carpet out from under the horse racing industry. There was no consultation. The government could have sat down a year and a half or two years ago, and they could have come to some sort of agreement with the horse racing industry, so 60,000 people could continue to work.

I take great offence to what I feel is some government members trying to stonewall here and delay this. It’s important that we proceed as quickly as possible and support this motion.

The Chair (Mr. Norm Miller): Thank you.

Mr. Natyshak, you had said you were going to be moving some amendments. Have you got those ready?

Mr. Taras Natyshak: Yes, sure. I do, yes.

The Chair (Mr. Norm Miller): Okay.

Mr. Taras Natyshak: Shall I provide them to the Clerk?

The Chair (Mr. Norm Miller): Not quite yet. I just wanted to make sure you had them.

Mr. Taras Natyshak: I’m ready to go when you are, Chair.

The Chair (Mr. Norm Miller): Ms. MacLeod?

Ms. Lisa MacLeod: I just wanted to say, very quickly, that I agree entirely with my colleague Mr. McNaughton, who is our critic for this issue. Back in August, this assembly supported the idea that the Auditor General should review the OLG’s plans, to make sure that this multi-billion dollar shift in gaming was going to be in the best interests of the province.

We are now eight months later, and we have lost valuable time. For the members opposite to try to delay this any further, I think, is a disservice to the constituents—not only in rural Ontario, to be very clear, who are dealing with the horse racing industry, but people who are from downtown Ottawa, downtown Toronto or downtown Windsor who have these concerns as well. We owe it to them. We know, for example, that in some cities, like in Toronto, they’ve had a lot of conversations, they’ve had a lot of consultation and they’ve had a lot of meetings. In Ottawa, we didn’t have that, which was why I also asked the Ombudsman to come in.

This rapid-fire approach by the OLG has lacked in consistency. It has been aided and abetted by this Liberal government for quite some time. This Liberal government has had this motion for two weeks, so I don’t know how much more they need to deliberate on this. Quite frankly, I’d like to see us put in place this motion immediately so that the Auditor General can get to his very important work so we can finally, as members of this assembly, have answers on this radical shift in gaming—because it will not only impact our economy; it will impact our society. I think it is important that the people of this province have their say.

I might also say that I know that there are two other members from Ottawa here today, and I’m quite surprised that they’re not supporting this motion. I’m quite surprised that they’re not in support of the Rideau Carleton Raceway and I’m quite surprised that they have not defended the city of Ottawa at all because, as you know, in this motion that was put forward by my colleague Mr. Klees, we talk about the compensation and the arrangements with municipalities if they were to host a casino, and it is very clear that our council and our mayor have been concerned about that as well.

I think in terms of those formulas, it is important that we have that discussion, it is important that we have the auditor review them and it is important that we get answers. We do not have time to delay; in fact, it is my opinion that we are eight months too late. We are in desperate need of getting answers out of OLG and the government. I would encourage all members to support Mr. Klees’s motion, and I look forward to hearing any reasonable amendments that may come forward.

The Chair (Mr. Norm Miller): Ms. Damerla.

Ms. Dipika Damerla: I just wanted to say that I don’t think anybody in this room is against 60,000 or 70,000 jobs. All we were saying is, we’ve just received this this morning. What I saw last night and what I see this morning are different, so we are just pleading for some time. But to twist that into suggesting that somebody doesn’t care about jobs is, I think, a stretch, and I just wanted that on the record.

The Chair (Mr. Norm Miller): Ms. Jaczek.

Ms. Helena Jaczek: I’m finding this discussion very interesting. Certainly from our perspective, there’s no attempt here at stonewalling. I’m just as eager to get to hear from the Auditor General on a number of these issues as are all members. I think public accounts is one of the places where we can work in the public interest, and that’s how the Auditor General helps us with that.

One of the things that I’ve heard in my riding—and I’m sure many others have—is the whole issue of: Could we not simply restore the Slots at Racetracks Program? So again, one of our amendments—and we are getting them put together now, because the discussion has been helpful to lead us into new avenues—

Mr. Frank Klees: Chair, on a point of order.

Ms. Helena Jaczek: —is that the Auditor General would look at potentially the cost of restoring the Slots at Racetracks Program. That will be one of our amendments.

Mr. Frank Klees: Chair, if I might, it’s very clear that the government members are ragging the puck here, and it’s unfortunate. I think we should allow the amendments to be tabled so that we can call the question.

Mr. Phil McNeely: I think, Chair, that most of that time has been taken up by the other two parties—

The Chair (Mr. Norm Miller): Mr. McNeely, you have the floor. Go ahead.

Mr. Phil McNeely: —and I think a proper discussion of this whole thing—one thing I’d like to ask the Auditor General is: A good part of this is a consultative process. Is that within your jurisdiction or is that something that you normally get involved in? It seems to be a mishmash of too many things in here that can properly be handled under this. What are your comments on that?

Mr. Jim McCarter: My sense on this one is, if the committee directs me and requests me and says to me, “Auditor, it would be helpful for us to have information on a specific issue such as, ‘Was a consultation—do you feel it was adequate?’”, we would endeavour to assess what sort of consultation process they did do and we would try to compare it, possibly, to other jurisdictions. So again, we would endeavour to provide an assessment to the committee on that, at least of our perspective, keeping in mind that it is somewhat of a judgmental issue—what type of a consultation process; how much is enough.

Having said that, I think the intent of this wording would be clear to me. The committee would just like to have, kind of, “What’s the auditor’s perspective on, was a consultation process undertaken, and, in the auditor’s view, does he feel it was reasonable?”, not if it was perfect. So if that’s the wish of the committee, I think we would endeavour, Mr. McNeely.

Mr. Phil McNeely: But it is a process that is not “was”; it is a process that “is” ongoing. So to me, how far ahead of issues can you get?

I’m sympathetic to the job loss in the rural community because in Orléans, I’m going through the same thing. The federal government has made a decision; 15,000 jobs in Orléans will be lost because the jobs will be taken from the downtown of Ottawa out to Kanata, 10,000 DND people, but with all the additional—so I’m sympathetic to that, because jobs are extremely important. I like what Ms. Jaczek said earlier, the last statement she made about looking at this further. I think that is ongoing.

I’m just wondering—we’re going to need more time to make sure that this is a constructive thing. I am not convinced that it is properly worded. I think that we’re going to need time to make those amendments.

The Chair (Mr. Norm Miller): Mr. Natyshak.

Mr. Taras Natyshak: Thank you, Chair. You’re fully aware that there are amendments on the table, so I’d like to get through that process and then we can continue the debate. Therefore, I move—

The Chair (Mr. Norm Miller): Just to be clear, when Ms. Jaczek had the floor initially, I should have let her move her amendment at that point. We’ll do it in the order that they were raised, so we’ll move to Ms. Jaczek. She has now got her motions in writing, and we’ll get her to move it and distribute. Ms. Jaczek.

Ms. Helena Jaczek: I’ll just wait till everyone has their copy.

If I may, Mr. Chair:

I move that Mr. Klees’s motion be amended to include the following two paragraphs:

“That the Auditor General of Ontario’s review of the Ontario Lottery and Gaming Corporation include an analysis of whether the cancellation of the Slots at Racetracks Program was a sound public policy decision given the government’s fiscal plan to balance the budget by 2017-18;

“And an assessment of what would be the cumulative four-year cost of reintroducing the Slots at Racetracks Program as previously constituted.”

The Chair (Mr. Norm Miller): Mr. Klees.

Mr. Frank Klees: Chair, obviously we’ll look to the Auditor General, but this amendment relates to a policy matter, and I believe that is totally out of the scope of the work that the Auditor General can be called upon to do.

The Chair (Mr. Norm Miller): Mr. McCarter?

Mr. Jim McCarter: Normally we try to be very non-partisan, as you’re aware, and not comment on a particular policy decision, so this could be problematic. I think, though, the intent of the motion is that you’re looking for some information on kind of the overall fiscal impact. I think we could provide some information on what underlying analysis—I think I heard the term “business plan” or “business case”—was there: How rigorous was it with respect to the fiscal impact? I think we could go there and provide some information.

I would be a bit reluctant to comment on whether a government policy was good or bad. Generally, we try to shy away from commenting specifically on public policy. We could provide some information and look into the whole fiscal impact, but as far as falling down and saying, “Yes, it was a good public policy,” or no, that would probably be something that we would be a bit reluctant to venture into.

Ms. Helena Jaczek: So perhaps the wording could be changed somewhat to say “include an analysis of whether the cancellation of the Slots at Racetracks Program”—what the fiscal impact was.

Mr. Jim McCarter: Something along those lines, I think, would be easier for us to deal with.

Ms. Helena Jaczek: Yes.

The Chair (Mr. Norm Miller): So we’ll need to take a recess to fix the wording.

Ms. Helena Jaczek: Yes, I think we should.

The Chair (Mr. Norm Miller): We’ll take a five-minute recess.

Ms. Helena Jaczek: Maybe 10?

The Chair (Mr. Norm Miller): A 10-minute recess?

Ms. Lisa MacLeod: No way.


The Chair (Mr. Norm Miller): Okay, five minutes. A five-minute recess.

The committee recessed from 0923 to 0933.

The Chair (Mr. Norm Miller): Okay, so we’ll get going again. The first motion, we determined, was out of order. Ms. Jaczek, do you want to move the revised amendment?

Ms. Helena Jaczek: I move that Mr. Klees’s motion be amended to include the following two paragraphs:

“That the Auditor General of Ontario’s review of the Ontario Lottery and Gaming Corporation include an analysis of the fiscal impact of the cancellation of the Slots at Racetracks Program given the plan to balance the budget by 2017-18.

“And an assessment of what would be the cumulative four-year cost of reintroducing the Slots at Racetracks Program as previously constituted.”

The Chair (Mr. Norm Miller): Ms. Gélinas.

Mme France Gélinas: I call the question.

The Chair (Mr. Norm Miller): Anyone else wish to debate this amendment? No. Okay. All in favour? All opposed?

Mme France Gélinas: I would like a recorded vote.

The Chair (Mr. Norm Miller): You needed to ask for that before we actually voted.

It’s a tie vote, and as the Chair, I’ll maintain the status quo, which means I will vote against the amendment. It’s defeated.

Mr. Natyshak, you have an amendment you want to move. Has it been distributed yet? Is it okay to distribute?

Mr. Taras Natyshak: Yes, it is.

The Chair (Mr. Norm Miller): Okay, it’s being distributed. Mr. Natyshak, we’ll just wait for it to be distributed, and then you can read it.

Go ahead, Mr. Natyshak.

Mr. Taras Natyshak: Thank you, Chair. I move that Mr. Klees’s motion be amended by adding the following items, which would be:

“8. Whether there has been any money allocated by the OLG to promote and advertise the privatization of the OLG.

“9. That the business interests of all senior management of the OLG, including all directors, the chair and the president and CEO, be reviewed immediately in order to assess if a conflict of interest exists with the plan to privatize OLG.”

I would ask for a recorded vote.

The Chair (Mr. Norm Miller): First of all we’ll have debate. Mr. Klees—Auditor, did you want to make any comment on this?

Mr. Jim McCarter: No.

Mr. Frank Klees: Chair, please call the question.

The Chair (Mr. Norm Miller): Okay, any further debate? A recorded vote, then. All those—


Barrett, Gélinas, Klees, Natyshak.


Crack, Damerla, Jaczek, McNeely.

The Chair (Mr. Norm Miller): It’s a tie vote. I vote to maintain the status quo. I vote against the amendment, so it’s defeated.

So we’re back on the main motion. Further debate on the main motion? No further debate? I shall call the question on the main motion. All those in favour?

Mme France Gélinas: Recorded vote.


Barrett, Crack, Damerla, Gélinas, Jaczek, Klees, McNeely, Natyshak.

The Chair (Mr. Norm Miller): Okay, it’s carried. Very well. We still have time. We have to revert to—

Mr. Frank Klees: Chair, could I just get a clarification?

The Chair (Mr. Norm Miller): Yes, Mr. Klees.

Mr. Frank Klees: Now that the motion has been passed, the auditor heard the discussion regarding the sense of urgency that the committee has for this. Could we just get clarification then from the auditor as to the timing that the committee would expect that his work would begin on this and approximately when—I realize it’s—

Mr. Jim McCarter: I can probably be fairly specific as to when our work would begin. I would say we would probably be advising the ministry that we’re currently doing the VFM for that we’re going to postpone it by a year. I think we’d be giving them the good news within this week. I think we would pull the team off and start our planning work on this and contact the OLGC to let them know that we’re coming in within a week’s time, Mr. Klees.

With respect to when we would finish it, I have to be honest, it’s quite a comprehensive motion, and I think I’d like to do a little bit of homework in the office and talk to the OLG just to get some idea of how long it would take. This is a fairly extensive motion and I think we would certainly be looking at—my best guess would be that the earliest would probably be towards the end of 2013. This looks like it could easily be six to nine months to complete. This is a fair bit of work, Mr. Klees, especially because we’re getting into the bingos and some of the other things.

Mr. Frank Klees: If I might, is there a possibility, Auditor, that you might be able to structure this in such a way that there may be interim reports that you could provide to the committee?

Mr. Jim McCarter: I think I would need to go back and talk to my staff to see if that would be possible. The one thing that I am mulling over is, it seems to be that the whole issue of—I’m not putting words into the committee’s minds, but the whole issue of the racetracks seems to be of interest. I was just chatting with the deputy auditor, Mr. Peall, about possibly us, in doing it—possibly splitting it up. So I’d have to take that under advisement; that might be possible. But as far as reporting—at the most, maybe two reports. I certainly wouldn’t want to get into a situation where we’d say we’d be issuing a separate report on every single question. I’m not sure that that would be an efficient way to tackle this assignment. But as to whether there might be a way of—just off the top of my head, perhaps the racetrack issue—perhaps issuing something sooner and the rest coming later, but I’d really have to mull that over and have a discussion in the office about that option.


Mr. Frank Klees: Okay. That really was the purpose of my question. I think the racetracks, as you put it, is an urgent matter for a number of reasons, and if there was a way to stage the report that would allow us to see a report relating to the racetracks specifically in advance, that would be very helpful.

Mr. Jim McCarter: I would comment, though, that if I was to compare it, say, to the work that we’re doing on either the Oakville or the Mississauga plant, again, all of our work is at the OPA; it’s a very single issue. Even doing the racetracks, it’s been made apparent that we would generally go out and visit a number of communities, and just the extent of that work does take time, Mr. Klees, because it is a regional type effort. We would really want to go out and—when you’re looking into whether people were properly consulted, you really need to go out and talk to the stakeholders, and that does take time, in comparison, say, to something like the gas plant audit.

Mr. Frank Klees: Thank you.

The Chair (Mr. Norm Miller): Thank you.



The Chair (Mr. Norm Miller): Now I’d like to invite Mr. Tom McKinlay, counsel, crown law office, to come forward.

Welcome, Mr. McKinlay. I understand you’re going to be affirmed, so I will ask the Clerk to do the affirmation.

The Clerk of the Committee (Mr. William Short): Mr. McKinlay, if you could just raise your right hand. Do you solemnly affirm that the evidence you shall give to this committee touching the subject of the present inquiry shall be the truth, the whole truth and nothing but the truth?

Mr. Tom McKinlay: I do.

The Clerk of the Committee (Mr. William Short): Thank you.

The Chair (Mr. Norm Miller): Thank you. I believe you have 10 minutes to start with, and then we’ll have questions amongst the three parties. Thank you.

Mr. Tom McKinlay: Thank you very much, Mr. Chair, and good morning, members of the committee. As the Chair indicated, my name is Tom McKinlay, and I’m a lawyer with the crown law office, civil, at the Ministry of the Attorney General. In that role, I provide advice on a wide variety of legal matters, including solicitor-client privilege.

I understand that the committee has been provided with records that are subject to solicitor-client privilege in this case, along with records that are subject to a variety of statutory confidentiality provisions. I’ve been advised that the committee is now in the process of considering how to deal with these records as these hearings go forward, and I’m here to answer any questions that the committee might have in respect of solicitor-client privilege. To assist in that, I’ve prepared a short opening statement that I’d like to share with you now.

I’m going to talk, essentially, about three things: first, what solicitor-client privilege is; second, why solicitor-client privilege is important; and then, finally, I was hoping to discuss the kinds of safeguards that legislative committees have implemented in past cases in order to deal with concerns about solicitor-client privilege.

I’d also like to table with the committee a legal opinion that was prepared by former Supreme Court Justice the Honourable Ian Binnie. I’ve given copies of the paper to the Clerk, and I believe he’s provided them to you. Mr. Binnie’s paper addresses all three of the issues that I was hoping to discuss today, and I thought that it might be of some assistance to you. To be clear, I am not offering the paper in any way to direct the committee in its consideration of these issues, but simply to assist in your deliberations.

As I’m going to discuss further, it’s ultimately your decision whether or not to disclose privileged and confidential records in this case. That decision involves a weighing of the public benefit associated with disclosure against the important public interest in the confidentiality of privileged records. I’m here today in response to the committee’s request to help you understand how the unique features of solicitor-client privilege may inform your consideration of these two competing public interests.

What is solicitor-client privilege? Solicitor-client privilege is the rule that guarantees the confidentiality of communications made by a client with his or her lawyer. It’s one of the oldest and most well-established principles of the common law. In the last decade, the Supreme Court has elevated solicitor-client privilege to the status of a quasi-constitutional right, and the court has also incorporated privilege as a principle of fundamental justice protected by section 7 of the Canadian Charter of Rights and Freedoms.

Canadian courts have been clear that solicitor-client privilege must be as close to absolute as possible. It ordinarily does not yield to or require any balancing of competing public interests. Rather, it is generally accepted that the public interest is ultimately best served by maintaining the confidentiality and integrity of the solicitor-client relationship. What all that means is that, subject to very rare exceptions, neither clients nor their lawyers are normally required to disclose privileged communications in court proceedings, criminal investigations or any other legal proceeding.

In that respect, I would also note that the Supreme Court has clearly and consistently held that solicitor-client privilege applies with equal force to the communications between lawyers in the government and their in-house clients. There is no difference between legal advice that government lawyers provide to the government and legal advice that private sector lawyers provide to their private clients.

So why have Canadian courts attached so much significance to solicitor-client communications? The rule is not intended to benefit lawyers or even, ultimately, the private interests of their clients. Solicitor-client privilege is based on the public interest in ensuring the fair administration of justice. In order for the law to work, it has to be fair and it also has to be seen to be fair, and fairness requires that people be in a position to understand in advance the nature and scope of their legal rights and obligations.

However, the difficulty is that the law can be quite complex, and it’s accepted that people need to be able to consult with lawyers before making these kinds of decisions, and in order to properly advise their clients, lawyers need access to all the facts, including good and bad facts. So for this reason, solicitor-client privilege depends upon complete honesty and trust between the client and his or her lawyer, and that relationship of trust depends on the guarantee of absolute confidentiality that privilege affords over everything that’s said between them. Without that guarantee, clients might not speak openly with their lawyers, and lawyers couldn’t get all the information they need to advise them. This would deprive the client of the benefit of effective advice and representation, and ultimately make the justice system unfair.

Consequently, Canadian courts have accepted that solicitor-client privilege is a rule that extends beyond the private interests of the parties and is essential to the workings of the legal system. Again, I’d emphasize that these considerations apply with equal force in the case of advice provided by government lawyers. Like all civil servants, government lawyers are politically neutral and non-partisan. In addition, we owe the same professional duty of loyalty to our clients as any other lawyer. For both of these reasons, we’re obligated to provide candid and objective legal advice to our clients, even where that advice may be at odds with the policy objectives of the government of the day. Our ability to do this could be undermined without solicitor-client privilege. Government decision-makers, like other clients, might be reluctant to seek timely advice or to seek advice at all, and government lawyers might themselves be less willing to deliver candid and objective legal advice, for fear that it might come back to embarrass their clients. Both of these outcomes would inevitably have a detrimental impact on the quality of the legal advice that’s available to government, and this is especially problematic in the case of government decision-makers who need to ensure that their actions are in accordance with the rule of law.

Moving on, then, to the safeguards that legislative committees have implemented in past cases in response to concerns about privilege, I’d note again at the outset that there’s no question that this committee has the right to see government records that are otherwise subject to solicitor-client privilege. In fact, I understand that the Ministries of Health and Finance have already provided the committee with these records in this case. However, I think it’s worth emphasizing that the committee’s power to compel the disclosure of this kind of material is unique in our democratic system. As I previously stated, except in very rare cases, courts and other tribunals have no ability to compel clients or their lawyers to disclose privileged communications.

It’s also up to this committee to decide whether or not to disclose these records to the public, in this case. However, I would respectfully submit that this is a significant decision. The committee’s determination about how it’s going to deal with privileged records in this case will create an important precedent. That precedent may impact the current and future governments in Ontario and the relationship of trust that currently exists between the government and its lawyers.

In his paper, Mr. Binnie talks about a number of past instances where, in response to these kinds of concerns, legislative committees have implemented safeguards designed to respect the confidentiality of privileged and other records. Based on these examples, Mr. Binnie concludes that while the Legislative Assembly and its committees clearly have the power to compel the production of this material, that right is not normally enforced without first endeavouring to find an accommodation with the government. He also suggests that this long-standing tradition promotes orderly government and the public interest.

Mr. Binnie notes that this view is reflected in the recent ruling of federal Speaker Milliken in the Afghan detainee case and the very recent ruling of Ontario Speaker Levac in September of last year. In both of those instances, the Speakers emphasized the long-standing parliamentary tradition of political parties working together to devise procedures to protect the confidentiality of privileged and other records disclosed to committees.

The examples discussed by Mr. Binnie in his paper offer a number of illustrations of the kinds of mechanisms that have been implemented in these cases, and they include:

—holding part of the committee’s hearings in camera rather than in public so that the committee may consider privileged records in private;


—striking a subcommittee or other inter-party process to privately review privileged records and make recommendations;

—retaining independent legal counsel to advise the committee on questions that may arise in connection with its consideration of these records; and, finally,

—appointing neutral arbitrators or third parties to undertake public-interest reviews on privileged records on the committee’s behalf.

While we would, of course, respectfully request that the committee initially review any privileged records in camera in this case, I’d emphasize again that this is ultimately up to the committee. However, it’s worth recognizing that the issue that I would suggest you need to consider is not whether the public interest requires the disclosure of these records to the committee. As I’ve said, that has already happened, and the committee is entitled to consider these records in performing its important functions. The issue is really whether there is some further public interest to be advanced by making the contents of privileged communications available to the public and whether that interest outweighs the important public interest in maintaining the confidentiality of privilege generally. That’s a more difficult issue, and that’s what I think the committee needs to consider.

Before concluding, I’d note that some of the confidential records that have been provided in this case are not privileged but, rather, the subject of statutory confidentiality provisions. These records include sensitive personal information, including health and tax information. Given the time available to me today, I haven’t focused on those records, but I would note that legislative committees have also traditionally worked together to protect the confidentiality of sensitive personal information.

Those are my comments. I’d like to thank you again for the opportunity of appearing today. I’d be happy to do my best to answer any questions you may have.

The Chair (Mr. Norm Miller): Very well. We’ll start with the opposition. You have about 10 minutes, I would estimate, for your questions.

Mr. Frank Klees: Thank you for that lesson. I often struggle with the fact that the government is the client of a lawyer. When I see documentation that’s exchanged between counsel within ministries and the minister’s office or a deputy’s office, and I see the cautions that are raised by the lawyer as to what not to say, because it may lead to certain implications or because too much may be said, the question that I’m left with is, how do you balance the issue of transparency and, if I can use the term, honesty with the role that a lawyer plays within government?

We see that currently, especially with the gas plant files, and you’re involved in that. I see your name on quite a number of emails where caution is given as to responses that are being provided to inquiries. Those responses then are vetted by legal counsel and sanitized, if I can put it that way.

I’d like you to just comment on kind of the bigger issue here of what expectations the ultimate client, who is really the public, can expect of legal counsel who is being paid by their tax dollars. Could you just comment on that?

I don’t know if I’m making myself clear, but even those of us here in this committee ask for information and then, because of the internal machinations of the correspondence that takes place, there is a firewall between the committee—and ultimately the public—and what’s really going on in the halls of government.

Mr. Tom McKinlay: So first, I guess I’d say that I’m not sure that I would agree with the characterization of sanitizing communications. I think that when communications material is being prepared and lawyers are being consulted, we bring a certain perspective. We’re just one of many groups in government who weigh in on communications. We weigh in for a specific purpose, and that’s to provide legal advice. For example, we will frequently flag issues around sub judice, where communications possibly could comment on ongoing legal proceedings that are before the courts, or defamation—or could reveal personal information, and also could reveal privileged communications. So we tend to flag those legal concerns, and we send those concerns back. It’s up to the client at that point to decide how to communicate with the public based on the advice we provide.

Mr. Frank Klees: Can I ask you this? Obviously, legal counsel within ministries is aware of the issues of the day and the political sensitivities of those issues. If legal counsel is asked for an opinion, especially if it’s asked for that opinion by a committee of the Legislature, can we expect that that opinion would not be tainted by a sense of perhaps wanting to protect the minister or the government of the day? To what degree can the minister expect that a legal opinion will be given that would provide a shield to a minister as opposed to that legal opinion being objective?

Mr. Tom McKinlay: Again, as I pointed out, our obligation as lawyers for the government and as civil servants is to give objective and accurate legal advice. In my own work, when I’m providing legal advice, regardless of who that advice may be going to, I always do my very best to give the best advice that I can.

Mr. Frank Klees: I’d like to take advantage of the fact that you’re here. I’ve read your resumé, and it’s very extensive. This committee requested an opinion from the Ministry of Health, and ultimately it was delivered by Carole McKeogh, the deputy director of the legal services branch. Are you familiar with her?

Mr. Tom McKinlay: I am, yes.

Mr. Frank Klees: Okay. And have you ever been consulted by her for legal advice or comment on any issue?

Mr. Tom McKinlay: I may have. I’ve certainly given legal advice to health.

Mr. Frank Klees: The specific issue that the committee had an interest in was whether or not the Minister of Health had the authority to intervene at Ornge. You’re familiar with the Ornge file, I’m assuming.

Mr. Tom McKinlay: Yes.

Mr. Frank Klees: Have you ever been called on to provide any advice related to the Ornge file?

Mr. Tom McKinlay: I haven’t ever been called on to provide any significant advice. I haven’t been, as I say, significantly involved in that. It’s possible that I was copied on some email related to Ornge at some point, but I haven’t given any significant advice.

Mr. Frank Klees: Repeatedly, the minister insisted to this committee and publicly that she had no authority to intervene at Ornge because of its structure. Yet the performance agreement specifically makes reference to the Health Facilities Special Orders Act, which it is subject to. We asked for a legal opinion as to whether or not the minister could have intervened as a result of that act. We got a legal opinion from Ms. McKeogh that states very clearly that the minister did not. In fact, as she goes through her report and states repeatedly—I’m going to read into the record the first paragraph. That really sets out the context of this, for your benefit. Actually, I have copies, Clerk, of the act itself, if we want to distribute it, and certainly provide a copy of that to the witness. I’ll just read—

Mr. Tom McKinlay: Mr. Klees, I’m sorry. Can I just ask quickly, is this a legal opinion that was provided to the committee, or was it a legal opinion that was prepared in connection with this matter that was subsequently disclosed to the committee?

Mr. Frank Klees: It was provided to the committee by Ms. McKeogh.

Mr. Tom McKinlay: Okay, so it was prepared for the committee—

Mr. Frank Klees: Yes.

Mr. Tom McKinlay: —and provided exclusively for that purpose?

Mr. Frank Klees: That’s right.

Mr. Tom McKinlay: Okay.

The Chair (Mr. Norm Miller): You have a couple of minutes left, Mr. Klees.


Mr. Frank Klees: In the opinion, Ms. McKeogh stated very clearly that, unlike the Public Hospitals Act, this act does not authorize intervention based on a public interest test, which would include concerns regarding governance and financial management. She goes on to say it does not authorize the appointment of a supervisor and so on.

However, upon reading the act itself, under section 2.2, which is on page 2 of the act—I draw your attention to that. That section states clearly that the purposes of this act are, “To enable the Minister to act expeditiously where the conduct of a licensee or of an officer or director of a corporate licensee affords reasonable grounds for belief that the health facility”—which under definition includes an ambulance service—“is not being or is not likely to be operated with competence, honesty, integrity and concern for the health and safety of persons served by the health facility.”

I don’t know how this could be read in any other way, knowing the context of Ornge, that the minister would not have had authority to intervene here. Yet Ms. McKeogh, in her opinion, makes no reference whatsoever to that entire section that gives that kind of authorization to the minister to intervene.

I would ask, if you could—and we’ll provide you with a copy of the opinion as well that was given to this committee—help us square this in terms of how someone with legal responsibility could provide that opinion, given the reality of the act that we have before us. Could we ask you to do that?

Mr. Tom McKinlay: I’m happy to look at the opinion if you want, but I’m at a bit of a disadvantage. As I’ve said, I haven’t had any significant involvement in Ornge. This act and health regulation generally is not something I know very much about, to be frank, and I’m not really sure I’d be able to offer any view as to the content of the opinion for that reason. I’d have to take it back and think about the issue.

As you can imagine, these kinds of statutory interpretation issues can be quite complex. It wouldn’t be easy for me to provide you right now with an on-the-spot opinion on this sort of complicated question.

The Chair (Mr. Norm Miller): You are out of time, Mr. Klees.

I should remind the committee that Mr. McKinlay was invited to give advice on how to handle the vast amount of confidential information we’ve been given and also some of the other documents as well.

We’ll move now to the NDP. Ms. Gélinas.

Mme France Gélinas: Thank you so much, Mr. McKinlay. I tried to understand as best I could what you were saying this morning. I have no legal background. But you did make a very interesting point that says this committee is able to compel the disclosure of documents that in any other part of law that you talk about would not be allowed to be compelled. I realize that this is an important power that this committee has, and I’m curious to see, how come we have this power?

Mr. Tom McKinlay: Well, for a number of reasons: mainly because the Legislative Assembly and through its committees is entitled to enquire into any matter that it deems to be in the public interest. In doing so, it has long been held that Parliament or the provincial Legislatures need to have an absolute authority to access any material that they need in order to fulfill that function.

Mme France Gélinas: Okay. I sort of understand it better when a member of the public hires a lawyer; they should be able to trust one another, and they should be able to talk. It’s not as clear to me when it is the government that retains a lawyer.

You work for the public service. The government can share with you bits and parts of what they want you to hear. How is this a relationship of trust when—I have no doubt that, on the civil servant side, you give it everything you have and you are trustworthy. I have more doubts about your client that may not be as trustworthy as the good people who work in the public service—not that they would deceive you, but more that they would only give you part of the information.

How is this issue of trust different when you deal with the government versus what I think I understand a little bit better, which is when somebody needs legal advice and goes to see a lawyer?

Mr. Tom McKinlay: In principle, the relationship is identical, as I said. I mean, we’re just lawyers. The government employs us directly in-house because, to be honest, that’s the most cost-effective way for them to obtain the amount of legal advice that they need. The government needs a lot of legal advice, as you can imagine, because of its activities in many areas, and so it’s very efficient to employ counsel directly rather than to retain law firms on one-off issues.

With respect to the question you’ve asked about clients disclosing the facts to us, it’s always better for the client to disclose as much information as possible, because that allows us to provide the best advice that we possibly can. But the concern that you flag isn’t unique to government. I mean, any client may omit facts. Before I joined the government, I spent several years working for a large firm, and we advised corporate clients. With corporations, large institutions like government, you’d struggle with that issue as well. So it’s certainly not unique to government.

Mme France Gélinas: Okay. Coming back to this unique power that we have as a committee of the Legislature to compel disclosure, does every Parliament in Canada have the same power?

Mr. Tom McKinlay: Yes. The federal Parliament and then the provincial Legislatures all have the same ability to do this.

Mme France Gélinas: Okay. You give us examples, as in the Afghan detainees etc., where the committee decided to use and also decided to disclose. Some of it was disclosed; some of it was not.

When a committee of the Legislature—and I don’t know if you’ve done the research, but I’m hoping—compels the disclosure of documents, because of its unique power, and has decided to make the second decision to disclose to the public, have there been repercussions to this, where we saw a grave negative outcome because of it?

Mr. Tom McKinlay: Because in all of those instances, the committee implemented safeguards to ensure that there was as limited a disclosure of any confidential information as possible—and for the most part, very little confidential information seems to have been disclosed—I think we didn’t see that kind of grave consequence. But had the committees chosen not to implement those safeguards, it might have been a different result.

Mme France Gélinas: Of the safeguards that are available to us, do you have a ranking as to what’s the best one and what’s the worst?

Mr. Tom McKinlay: It’s not like a best-to-worst situation, really. I think the key is, all of the different mechanisms they’ve used allowed the committee to consider the privileged material and then to determine, sort of on a case-by-case basis, whether individual records really needed to be disclosed in the public interest.

Again, I come back to—I mean, you already have all the records, so to the extent that the committee needs to review that material, that’s open to you. But then disclosing that privileged material to the public is another level. Ideally, the safeguards are designed to allow the committee to turn its mind to that question in private and to make an informed and thoughtful determination of which records go out.

Mme France Gélinas: Okay. I will put a scenario forward to you that we have used at public accounts before, where we’ve dealt—I’m not sure if it was sensitive personal information or if it was privileged communication, because I’m not a lawyer and I don’t always understand the difference between the two.

We had documents in front of us; we got access to them. The Clerk has this information and will allow people to see the information if requested. But we did not post that information on the website; we did not make that information available on a search engine or anything like this. So is this the type of safeguard that you’re talking about?

Mr. Tom McKinlay: When you say that they allowed people to see the information, you mean members of the public could come in and look at the records, but they just weren’t available online?


Mme France Gélinas: They actually had to go request from the Clerk and had to go to the Clerk’s office to see those documents, and those documents were only available to the people who went to the trouble. You’re not allowed to make a copy, you’re not allowed to leave with it, you’re not allowed to do anything, but you’re allowed to go into the Clerk’s office and know that those records exist and that those records are available through a protocol through the Clerk’s office.

Mr. Tom McKinlay: I guess the one problem I flag with that sort of approach is that it actually doesn’t provide an opportunity for the committee to think about whether individual records should be available. It depends simply on members of the public coming in and looking at them for themselves. So as I said, I think that sort of public interest balancing needs to be undertaken on the basis of what is in a document. I don’t know that that kind of safeguard would actually protect it in the way I’ve outlined it already.

Mme France Gélinas: Okay. I’m good for now.

The Chair (Mr. Norm Miller): For clarification on your point, I believe just members of the committee with their staff in attendance were the only people allowed to look at those documents, with the Clerk there in attendance.

Mr. Tom McKinlay: Oh, I see. So if it wasn’t—

The Chair (Mr. Norm Miller): It wasn’t the general public, no. It was just members of the committee, and they could bring a staff member in, with the Clerk there as well.

Mme France Gélinas: But remember, there was a whistle-blower; we requested some personal information from that whistle-blower. Do you remember what I’m talking about? I don’t want to say it because we’ve never made those documents public.

The Clerk of the Committee (Mr. William Short): No. Right.

Mme France Gélinas: Okay. So we all have them, because I have them in my office. But—okay. I understand. Thank you. Sorry.

Mr. Tom McKinlay: No problem.

The Chair (Mr. Norm Miller): We’ll move to Ms. Jaczek, the government side.

Ms. Helena Jaczek: Yes, thank you. I think we’ve all been wrestling with this issue where legal counsel works for the government and the government, essentially, is the people. There’s this real struggle, I think, for us to come to grips with solicitor-client privilege in this specific area.

So, moving forward, the committee now has in its possession massive amounts of documents, both from the Ministry of Health and Long-Term Care and the Ministry of Finance. I guess, following up on these safeguards, we as a committee have made some decisions. As an example, a social insurance number was not disclosed; personal health information—it seems clear, I think, to the committee as a whole. We don’t want to have that go public.

Can you sort of specifically give me other examples that you would see are not in the public interest to disclose? I’m just trying to wrestle with how this could hurt people if documents are disclosed. Personal health information I think we understand; identifiers for a specific person that could be used for fraudulent purposes if they were public. Are there other examples?

Mr. Tom McKinlay: I think the example that I’ve offered today primarily surrounds solicitor-client privilege. I think it’s worth recognizing that the disclosure of solicitor-client material, particularly a big body of solicitor-client material like this, is extraordinary.

The concern expressed in the cases in this area has always been that compelling the production of that material in the public, so that the public has access to it, risks undermining the integrity of the solicitor-client relationship in a way that makes it difficult for people to consult with their lawyers.

In the specific example of the government, that risk exists as well. The government needs legal advice; it needs good legal advice. If government decision-makers are afraid or unwilling to ask their lawyers hard questions in difficult cases, then they won’t get that legal advice. As a result, the public interest isn’t advanced where decision-makers don’t have the advice that they need to make good decisions.

Ms. Helena Jaczek: So then, does that mean that whenever legal counsel within a ministry gives advice, that advice should not be disclosed? Is that—

Mr. Tom McKinlay: I don’t know that I’d say “should not be disclosed.” Any time that—

Ms. Helena Jaczek: To the public.

Mr. Tom McKinlay: Yes—that advice is given by a lawyer to his or her client, in this case, the government, that advice is privileged, and so that advice is not subject to disclosure in any proceeding, subject to rare exception, but for this one.

Ms. Helena Jaczek: Would you be aware if the ministry could go through the documents that have been delivered and basically redact parts but disclose some to the public? Again, I don’t know if you’re familiar enough with the kinds of documents that were delivered to the committee, but would there be some parts of that that you could see—

The Chair (Mr. Norm Miller): Ms. Jaczek, I’m sorry to interrupt you, but the Clerk is just reminding me that we’ve got many USB keys. They’re currently split into some that are not confidential and some that are confidential, and the committee hasn’t made a decision on what to do with any of them, including the non-confidential ones, at this time. So I just wanted to remind all members.

Ms. Helena Jaczek: Okay. I was wondering if the confidential ones could be further examined to sort of separate them out, or if the ministry has determined that these are confidential, and that’s the way it is.

Mr. Tom McKinlay: As I mentioned, I haven’t had any significant involvement in Ornge, so I was not involved in the document production effort. We normally do redact solicitor-client information, but I think what you’re imagining is exactly the kind of process that has been implemented by committees in past cases. They sort of go through the documents, and they figure out what can’t be disclosed because the public interest simply isn’t there, and whether there is anything that can be disclosed or, more importantly, needs to be disclosed to further some important public interest.

Ms. Helena Jaczek: So that’s basically up to us to determine.

Mr. Tom McKinlay: Right, and I don’t know whether—if the committee certainly was looking for assistance, I’m sure that could be offered.

Ms. Helena Jaczek: Thank you.

The Chair (Mr. Norm Miller): Ms. Damerla?

Ms. Dipika Damerla: Thank you so much again for coming and for an excellent presentation.

Mr. Tom McKinlay: Thank you.

Ms. Dipika Damerla: It’s great to get the overview. I just wanted to understand—if you could explain how the interest in protections that you talked about earlier in your presentation relate to or mirror the protections provided in the Freedom of Information Act.

Mr. Tom McKinlay: Under the Freedom of Information Act, the solicitor-client privileged material is not disclosable in response to an FOI request.

Ms. Dipika Damerla: So they sort of reinforce each other.

Mr. Tom McKinlay: That’s right.

Ms. Dipika Damerla: For obvious reasons.

Mr. Tom McKinlay: For obvious reasons.

Ms. Dipika Damerla: My other question is—and I just want to get your sense. You’ve probably been following public accounts just generally; I understand that Ornge is not your area of brief. So far, do you think the committee has exercised the kind of judgment you would have liked to have seen in terms of what materials we have released to the public and what we haven’t? Is there anything that you flagged that perhaps we were out of line? How do you feel?

Mr. Tom McKinlay: It’s not really my role to pass judgment on the committee’s decisions.

Ms. Dipika Damerla: But as an expert, you would have some idea. If you want to share—

Mr. Tom McKinlay: I don’t really have anything to offer in that respect.

Ms. Dipika Damerla: My last question is, because we are so similar to the British parliamentary system, are there any examples—you said that within the Canadian context, you couldn’t think of any area where a serious breach of this kind of confidentiality took place. I’m just wondering if there are any historical examples under the British parliamentary system that we can take advice and caution from, if there’s anything you would know.

Mr. Tom McKinlay: I’m not familiar, off the top of my head, with British examples. I would note that, as a result of the minority government federally, Canada has sort of had more of these decisions recently than other Commonwealth jurisdictions.

Ms. Dipika Damerla: My last question, everybody has asked it, so I’m just going to try and rephrase it. I think what we’re struggling with is that we understand the solicitor-client privilege, but if the ultimate boss—for lack of a better word—is the general public, if we as a committee learn things that are subject to solicitor-client privilege but the public, which is the founding principle for democracy, ought to know that, how does one make that judgment? We, as a committee, know what went wrong or didn’t go wrong, but now we cannot share that with the public because of this privilege. How does one breach that? Do you see where I’m going with my—

Mr. Tom McKinlay: I do, and I think that is the sort of difficult balancing that the committee has to do.

I might suggest, though, that in a lot of cases, the issue is going to be that things were done, decisions were made, and whether or not legal advice was given in advance isn’t always of the greatest significance, compared to the fact that things happened.

So I think that in balancing those competing considerations, the question always has to be: Why is it necessary to disclose the existence and content of the legal advice, as opposed to what it was that the government did in particular cases?

Ms. Dipika Damerla: That actually brings up an important nuance, because when we think of solicitor-client privilege, we don’t only think about what the lawyer tells the client but also what the client might disclose to the lawyer, which is not advice but facts. I’m assuming that the solicitor-client privilege covers both: not just the advice you give your client but that which the client may have told you, which may be of interest to the public. That’s, I guess, where the real issues are.

I take your point on one doesn’t really need to tell whether the lawyer advised us or not, but—the facts.

Mr. Tom McKinlay: Right, yes, and the facts are, as well, privileged for the reasons I’ve already said.

Ms. Dipika Damerla: But that’s the crux of the issue. In a well-functioning democracy, if those facts are pertinent to the public, how do you balance that need for the public to know, and balance the integrity of our judicial system and people being honest with their lawyers and that sort of good thing?

Mr. Tom McKinlay: You’re right: That is the balancing. I just think that what needs to be kept in mind is the counterbalancing of the relationship between the government and its lawyers, and how the decisions that the committee makes in this case are going to affect that relationship in the future.

Ms. Dipika Damerla: Okay, thank you very much.

The Chair (Mr. Norm Miller): Thank you, Mr. McKinlay, for your advice and for coming before the committee today. It’s appreciated.

Mr. Tom McKinlay: Thank you.

The Chair (Mr. Norm Miller): A couple of things. First of all, for the committee, you may want to make a decision about the non-confidential documents that have currently not been exhibited. Is there agreement on that, to exhibit them and make them public?

Mme France Gélinas: Absolutely.

The Chair (Mr. Norm Miller): Okay? Yes? Agreement? Very well.

Secondly, the Auditor General has just let me know that he will be making his report public on the Mississauga power plant on Monday the 15th, and that there’s a lock-up from 12 to 1, and then there will be a press conference at 1 o’clock. Each of the caucuses would normally have one person attend the press conference. Go ahead, Auditor.

Mr. Jim McCarter: Actually, one member from the public accounts committee per caucus, and then one other member could attend, so if you wanted, you could have two members—for instance, if somebody from the PAC wanted to attend, plus, say, your energy critic wanted to attend. We’ve sent that out in letter form to the House leaders, to advise the House leaders and your leaders of that fact.

The Chair (Mr. Norm Miller): Mr. Klees, you had a question?

Mr. Frank Klees: Yes. With regard to our site visit this afternoon, I’m wondering if it’s all right if we invite one staff member to accommodate us?

The Chair (Mr. Norm Miller): Is that fine?


The Chair (Mr. Norm Miller): Okay, that’s fine. Ms. Gélinas?

Mme France Gélinas: When are we going to make decisions as to the rest of the documents?

The Chair (Mr. Norm Miller): That’s up to the committee. We don’t have time right now, obviously, but we can discuss that whenever the committee wants.

Mme France Gélinas: And we don’t have time right now?

The Chair (Mr. Norm Miller): No, we don’t. We have a minute and—

Mme France Gélinas: I’d like us to start with this at the next meeting.

The Chair (Mr. Norm Miller): Very well. Anything else?

Mr. Toby Barrett: Question: The site visit, is it inside? Outside? Are we out in the weather or in a building?

The Clerk of the Committee (Mr. William Short): It’s in a building.

Mr. Toby Barrett: In a building? Okay.

The Chair (Mr. Norm Miller): So we’ll adjourn.

The committee adjourned at 1024.


Wednesday 10 April 2013

Committee business P-67

Special Report, Auditor General: Ornge Air Ambulance and Related Services P-76

Ministry of the Attorney General P-76

Mr. Tom McKinlay


Chair / Président

Mr. Norm Miller (Parry Sound–Muskoka PC)

Vice-Chair / Vice-Président

Mr. Toby Barrett (Haldimand–Norfolk PC)

Mr. Toby Barrett (Haldimand–Norfolk PC)

Ms. Dipika Damerla (Mississauga East–Cooksville / Mississauga-Est–Cooksville L)

Mme France Gélinas (Nickel Belt ND)

Ms. Helena Jaczek (Oak Ridges–Markham L)

Mr. Phil McNeely (Ottawa–Orléans L)

Mr. Norm Miller (Parry Sound–Muskoka PC)

Mr. Jerry J. Ouellette (Oshawa PC)

Mr. Shafiq Qaadri (Etobicoke North / Etobicoke-Nord L)

Mr. Jagmeet Singh (Bramalea–Gore–Malton ND)

Substitutions / Membres remplaçants

Mr. Grant Crack (Glengarry–Prescott–Russell L)

Mr. Frank Klees (Newmarket–Aurora PC)

Mr. Taras Natyshak (Essex ND)

Also taking part / Autres participants et participantes

Mr. Robert Bailey (Sarnia–Lambton PC)

Mr. Steve Clark (Leeds–Grenville PC)

Ms. Lisa MacLeod (Nepean–Carleton PC)

Mr. Monte McNaughton (Lambton–Kent–Middlesex PC)

Mr. Jim McCarter, Auditor General

Mr. Gary Peall, Deputy Auditor General

Clerk / Greffier

Mr. William Short

Staff / Personnel

Ms. Lorraine Luski, research officer,
Legislative Research Service

Committee Documents