STANDING COMMITTEE ON PUBLIC ACCOUNTS
COMITÉ PERMANENT DES COMPTES PUBLICS
Monday 16 February 2004 Lundi 16 février 2004
The Chair (Mr Norman W. Sterling): I don't think I have to tell you who I am; I'm a former minister of these fine people. Good to see you again. Congratulations, Sue Corke, on being Deputy Minister of Consumer and Business Services. Do you still call yourselves CBS?
Ms Corke: Thank you very much, Chair and honourable members. At your request, I will introduce my staff. Mary Shenstone is the director of sector liaison branch, Rob Dowler is the acting assistant deputy minister for the policy and consumer protection division, Vishnu Kangalee is the acting director of the marketplace standards and services branch. My name is Sue Corke. I've been the Deputy Minister of Consumer and Business Services for one week, and I'm pleased to be here today.
I'm pleased to be here today and to have this opportunity to tell you a bit about the ministry and its involvement and response to the 2003 annual report of the Provincial Auditor. I've introduced my staff. They're the key people with me this morning, and they're going to respond to your questions.
As a prelude to my comments, I'd like to say how much we value the Provincial Auditor's report and its findings. We've taken them very seriously, and we have either implemented remedial action or are in the process of doing so on all of them. I believe we actually made available a copy of the status report.
Before I go into details of the Provincial Auditor's findings, I'd like to discuss with you two topics by way of introduction to the ministry. First, I'd like to outline the mandate of my ministry and provide you with a brief overview of its roles and responsibilities to the consumers of Ontario. Second, I'd like to discuss with you the delegated authority model, or DAAs as we refer to them in the ministry. I'll explain the design and rationale of the delegated administrative authority model and their role in administering industry regulations.
Following that, I'd like to spend some time telling you about the consumer protection branch of the ministry, its responsibilities and how it enforces the many consumer protection statutes under its purview. In particular, I'd like to spend some time talking about how the ministry decides to enforce statutory requirements and deploy its inspection and investigative resources, and provide you with some context to better understand how the ministry approaches its business.
In the interest of time, I will limit my detailed remarks to some of the key areas of the report; namely, those dealing with the governance and accountability of delegated administrative authorities and the enforcement actions of the marketplace standards and services branch.
In terms of a ministry overview, the Ministry of Consumer and Business Services provides a number of services to both individuals and businesses and administers some 67 individual statutes that range from liquor licensing right the way through to land titles. There are not many aspects of our daily lives, actually, that the ministry doesn't touch.
By and large, feedback tells us that we do these things very well. In fact, the ministry has received a number of awards every year from national, international and private sector organizations, including one from the Institute of Public Administration of Canada for the innovative work we've done in establishing delegated administrative authorities.
The ministry also provides integrated services that allow people and businesses to access a number of government services across different ministries, all in one place -- an enterprise role. Government information centres, an access and inquiry call centre and Publications Ontario all help make it easier for the public to find more information in less time.
Registration is also a large part of the ministry's responsibilities. The ministry registers businesses and personal information, including land titles, business records, births, deaths, marriages and changes of name.
Ensuring a regulated and responsible marketplace for the alcohol and gaming industry is also a significant part of the ministry's portfolio, which we share in part with the Ministry of Economic Development and Trade through the Ontario Lottery and Gaming Corp and the Liquor Control Board of Ontario. As well, the Alcohol and Gaming Commission of Ontario and the Ontario Racing Commission both enforce regulations that maintain responsible and regulated industries in the province.
When the first delegated administrative authority was established seven years ago, a great deal of work was put into developing a statutory system that would be the most responsible and responsive, to ensure the highest level of standards of consumer protection and public safety.
What do I mean by "responsible" and "responsive"? Government must not only ensure public safety and consumer protection, but must also see to it that regulations are workable and adaptable to changes in the marketplace. To do so, we need ongoing relationships with consumer and industry stakeholders to help build consensus about challenges and solutions in the industry.
To be responsible, industry must do what it can to protect the public from unsafe or unscrupulous practices. As a whole, we believe that industries in mature sectors are well positioned to play an active role in raising the bar on compliance. At the same time, it is government's role to ensure that standards and requirements can meet the ever-changing nature of the marketplace, particularly where technological design and innovation are involved.
To be responsive, regulations and regulators must not only fulfill their stated purpose, but they must also adapt to changes in the marketplace to suit the public interest. Regulations must keep up to date with emerging trends, demands and needs and must stay current with different ways of doing things.
With this in mind, it's best to think of the delegated administrative authorities as partnerships between consumers, government and industry that provide greater focus and specialization to regulatory bodies while maintaining government control over standards.
In this partnership, the government sets the standards -- sets the rules -- and holds the delegated authorities accountable for administering them. It has accountability guidelines, and the ministry keeps a close eye on how well the authorities meet certain challenges. We look for improvements in the governance structure that will meet our mutual goals, and we deliver changes in legislation to enable higher standards of compliance.
In turn, industry and consumers work together to find the best ways of administering the standards set out by government. It is up to each authority to leverage the relationships and knowledge in their fields to come to effective and efficient measures to meet these goals.
By doing this in specialized areas, delegated administrative authorities are able to develop expertise in their field that in turn gives the authority more credibility. It allows regulatory practices to change more quickly and adapt to a dynamic marketplace, providing better, more up-to-date protection for consumers and public safety.
In short, the DAA model allows the government to set goals for a series of specialists in focused areas to administer. It allows the government to steer, rather than to row. Most of the delegated authorities are created under the Safety and Consumer Statutes Administration Act, 1996. The Technical Standards and Safety Authority, the Electrical Safety Authority, the Real Estate Council of Ontario, the Ontario Motor Vehicle Industry Council and the Travel Industry Council of Ontario were all designated under this legislation. The act, combined with a number of other measures, creates a strong accountability relationship between the authorities and the ministry.
The Safety and Consumer Statutes Administration Act requires administrative agreements and annual reports to be tabled to the Legislature. The ministry also has a dedicated staff unit to monitor the overall success of the authorities and to look strategically at anything needed to improve the framework of legislation and regulations to assist in meeting their goals.
The Ontario New Home Warranty Program and the Board of Funeral Services are slightly different. They were created decades ago under their own unique statutory frameworks. Whereas the newer authorities have binding administrative agreements set out in the act, the Ontario New Home Warranty Program and the Board of Funeral Services operate under different legislation that does not provide for these agreements.
An independent evaluator concluded that the delegated authorities are doing a good job. There are more inspections, more rigorous enforcement, greater protection for new home buyers, and more focus and transparency in these fields than ever before. For example, TICO, RECO and OMVIC, the travel, real estate and motor vehicle councils, have more than doubled the investigation, inspection and enforcement resources available to enforce these statutes since 1996.
Of course, all our DAAs continue to have close working relationships with the ministry through a wide array of formal and informal accountability mechanisms, including board representation by senior ministry employees. All four of us here today are actively involved in board membership of one sort or another. This enhances the accountability relationship between the ministry and the authorities, helping to make each other more successful.
I hope this overview to my ministry and its DAAs is helpful. Now I'd like to just discuss the consumer protection program of my ministry, administered by the marketplace standards and services branch.
As I've said, the delegated administrative authorities are specialized to deal with their selected areas of focus. All other retail businesses are covered by the marketplace standards and services branch, which administers consumer laws of general application and sector-specific statutes not delegated to the DAAs.
The marketplace standards and services branch administers 15 major statutes, including the Consumer Protection Act and the Business Practices Act. This legislation, broadly speaking, gives the ministry the authority and duty to help ensure a fair marketplace.
The public face to the branch is the consumer services bureau. Its role is to receive consumer complaints and inquiries from the public, and to provide advice, mediation and enforcement on a variety of consumer issues. In concert with licensing and registration, and investigations and inspections sections, the bureau ensures compliance with some 10 different pieces of legislation, including the Collection Agencies Act and the Theatres Act, which I will return to discuss in greater detail later in my presentation.
To ensure compliance, the ministry has a range of measures available to it. They exist on a continuum to appropriately deal with offences from the very minor to the particularly egregious. For example, the ministry may inspect a licensed place of business, investigate alleged wrongdoing, issue orders or suspensions or lay charges, depending on the nature of the complaint and applicable statute.
I'll discuss the range of measures again in a moment, but I'd first like to highlight how busy this branch is. The staff size of the branch is between 65 and 70. In 2003 alone, the ministry's consumer services bureau received more than 68,000 calls from consumers. In addition, it received another 6,800 written complaints about businesses. The bureau opened more than 240 investigations that led to 330 charges being laid. In the end, the ministry successfully obtained more than $625,000 in restitution either through mediation, court orders or court-imposed fines.
I am pleased to note that the auditor said, "The investigations the ministry had conducted were generally performed in a satisfactory manner. As well, where mediations were possible, we noted evidence that appropriate efforts had been made to obtain restitution for consumers."
While the ministry is very active in protecting consumers, it is important to remember that it does not act alone. Since scammers do not respect jurisdictional boundaries, the ministry works with a number of partners who have shared interests. This includes agencies from law enforcement, municipalities, other provinces, the federal government and other governments. One of the most innovative projects in this branch is the cross-border alliance on deceptive telemarketing scams with the Federal Trade Commission and the US Postal Service and the OPP.
In recent years, the ministry has won awards for its consumer protection activities, including the US Consumer Agency Achievement Award, the Institute for Public Administration of Canada's award and the Ontario Public Service Amethyst Award.
In the end, though, it is still an open market and that means consumers must take precautions to protect themselves. As a result, a significant focus of the ministry is aimed at prevention through education. For example, just over a week ago, the minister launched a very successful program at Toronto police headquarters to help people avoid identity theft. And earlier, in December, the minister launched the Ontario fraud-free calendar, which is distributed to the public in conjunction with partners from payment card companies, the OPP, the Ontario Securities Commission and many other public- and private-sector partners, including the Consumers Council of Canada and credit reporting agencies.
I'd like to spend my remaining minutes speaking in more detail about the auditor's specific findings regarding the ministry's consumer protection duties in relation to its allocation of inspection resources and governance issues associated with the delegated authorities.
A significant portion of the auditor's report dealt with the allocation of marketplace standards and services branch inspection resources and recommended that the ministry distribute them in a manner that is consistent with risk to the public. I am pleased to report to the committee that this been implemented. The ministry has adopted a risk-based framework to determine how to allocate its scarce compliance resources, based on criteria developed by an independent risk management expert. In fact, the ministry was in the process of developing this framework while the auditor was conducting his review and we're happy to see that he has noted this and endorses the direction.
This risk-based framework will help the ministry to deploy its field inspection resources in a manner that will have the greatest positive effect and will provide the regulatory flexibility needed to cater to urgent ministry priorities.
There is a wide range of tools available to the ministry in enforcing its consumer protection statutes and we will continue to do that in a way that makes sense. I've referred to some of these measures earlier but some of these are subtle yet important distinctions that I want to make clear.
For example, the auditor stated that adult video stores were inspected in 2001 and 2002 more often than collection agencies were, despite a higher level of complaints for collection agencies. This is true, but there are good reasons for that. One related to the introduction of a new stickering program for adult videos in that time period. The second related to the appropriateness of inspections as a compliance tool for collection agencies. The third related to the fact that complaints in the adult video sector really aren't a valid indicator of non-compliance in that sector. Actually, we rarely hear consumers of this product complain. To be clearer, one needs to understand that just prior to the time period reviewed by the auditor, fiscal year 2001 through 2002, the ministry had released new requirements to provide proof that adult sex films on DVD carried a special sticker indicating compliance to the Ontario Film Review Board guidelines on adult product.
The Theatres Act requires the film review board to review a film for sale or rent in Ontario, check for prohibited content such as sexual violence or minors engaged in sexual acts, just two criteria that would prevent the movie from being sold or rented in the province. Adult sex films must, by law, be properly stickered as evidence that they have been reviewed and do not contain scenes violating the guidelines.
From the risk perspective, the number of Theatres Act inspections was high in 2001 and 2002 because of the new stickering program and the need to educate adult video store owners about their obligations.
It was also important that the ministry deal with the high level of non-compliance that inspectors were observing at the time. Secondly, the low level of inspections related to complaints in the collection agency sector is indicative of the fact that the vast majority of complaints received by the consumer service bureau allege harassment. Staff has found that harassment is rarely observable through a field inspection. Instead, the registrar reviews every formal complaint, interviews the complainant, contacts the company for a response and, where there is evidence to support it, formal cautions, charges or other actions are taken. This involves the work of the registrar and the investigators, not the inspectors.
In fact, to deal with collection agencies, the ministry has since April 2001 issued 33 cautions, suspended four licences, revoked one licence altogether and laid 62 charges. Nine investigations are currently ongoing.
To summarize: To restrict the analysis to the comparison of the ratio of complaints to inspections in adult video and the collection agency sectors misses the essential differences between the nature of the sectors and their consumers.
Notwithstanding that, the ministry has been very active in the areas mentioned by the auditor. We believe there is still more we can do. We support the recommendations and will continue to deploy our compliance resources in an appropriate manner.
Just for a minute to turn to some of the detailed suggestions of the auditor in regard to governance of the ministry's delegated authorities: As I mentioned earlier, the delegated authority model is an innovative and forward-looking way of involving consumers, government and industry to provide service and ensure compliance. Not only does it engage stakeholders, it improves public safety and consumer protection.
We are happy to see that the auditor believes the model is sound and that, as he says on page 106, "workable accountability framework in place to delegate regulatory functions to certain industries." Let me reiterate that the ministry's role in the partnership is to manage the governance of the authorities and hold them accountable for their results.
By establishing good governance structures and providing clear regulations and a thorough overhaul of the legislative frameworks, as we have done since 1996, the ministry sets up a situation for DAAs to succeed. We have found that they have embraced their role and take their responsibilities very seriously, administering the regulations which are in the best interests of their customers and, in turn, their own industries.
The ministry works closely with each and every one of the DAAs, and while there are governance models in place, we recognize that some may benefit from more documented and formal arrangements to reinforce the culture of co-operation that the ministry and DAAs have worked hard to foster.
In particular, in August 2003 the ministry signed a letter of accountability with the Ontario new home warranty program. In addition, the Technical Standards and Safety Authority has invested $5.5 million into new databases to track safety information, and both the TSSA and the Electrical Safety Authority have agreed to have the data in future state-of-safety reports reviewed by their external auditors to ensure the data reconcile to source documents identified by the authorities.
In conclusion, I hope that I've made clear the breadth of work that my ministry does. As regulators of alcohol, gaming and horse racing, combined with registration, public service delivery and policy-setting for a number of important areas, the ministry is closely involved in public safety and consumer protection.
Through our consumer protection legislation and our involvement with DAAs, the ministry has found ways to obtain better results in a more responsible and responsive manner. By giving DAAs responsibility and power to regulate key industries, we are managing a process that allows regulations to adapt more quickly in a marketplace that moves faster than it ever has before.
At the same time, consumers benefit from the expertise of regulators with greater focus and knowledge while the government is able to set safety and consumer protection standards that the DAAs are obligated to uphold.
Employing a risk-based framework is consistent with the marketplace standards and services branch tradition of taking action that makes the most sense for the industry in question. This allows us to have the greatest effect in the market.
Awards from our peers are a sign to us that we are on the right track, but not that we have perfected our work. In fact, we are continuously looking for ways to improve our services and to be more effective.
Since the auditor's report we have made important strides, and we believe that this report is an important tool that validates our direction in some areas and gives us reminders about places where more attention is needed. We view these as important steps that have been taken and that we will continue to take. I'm pleased to have had this opportunity to tell you about them and will now be happy to take any questions you might have for us. Thank you.
In the report there is one consistent area that I think is mentioned with respect to key data regarding investigations, inspections, enforcement practices and especially record-keeping deficiencies and stuff like that. I know the ministry has already taken some steps in all of those areas. Could you perhaps expand a bit more on some of those things?
Mr Rob Dowler: Thank you very much for the question. I think the ministry is generally quite sympathetic with the recommendation from the auditor. We do recognize the importance of keeping good data on our registrants and making sure that we're tracking on a risk basis the types of compliance activity that would command the inspectors' and investigators' attention. We also recognize that in an area like cemeteries, which is flagged in the auditor's report as an area that could use improved data --
Mr David Zimmer (Willowdale): Mr Chair, on a point of order: I'm having great difficulty listening to the answer. I think it's a disservice to have sidebar conversations. It's disrespectful of everybody in the committee. I can't follow the --
Mr Dowler: As I was indicating, the ministry does take the state of its data very seriously and we have taken steps to improve it. In the area of cemeteries in particular, that's the one area where the auditor certainly spent some time in his report, and we thank him for the recommendations.
We have launched a completeness project in the cemeteries regulations section and I'm pleased to report that as of today we have much more complete records on cemetery registrants than we had before. In fact, just to verify that, we just ran a completeness test using our own internal audit resources to make sure that our registration records on the 5,000 cemeteries that exist in the province were complete. The internal auditor did report to us that as of today our records are virtually 100% complete based on the statistical sampling they did. So we think that's an improvement that was made and that's the direction the ministry wants to head in.
Mr Sergio: With respect to cemeteries, do you believe that according to the ministry's practices the auditor was generalizing when he mentioned the 5,000 cemeteries, given the fact that throughout rural Ontario we may have very small cemeteries, and that the number of those cemeteries indeed may be very small to provide the necessary information?
Mr Dowler: The audit report indicated that a significant proportion of the 5,000 cemeteries hadn't submitted their annual financial returns to the ministry. We would suggest that while we agree with the issue -- we do need to take steps to make sure we get complete records submitted to us -- we think the size of the problem is a little bit smaller than was identified by the auditor. We don't require one annual return from every one of the 5,000 cemeteries in the province; we actually require one return for each of the approximately 2,500 owners in the province. In a perfect world we wouldn't be looking for 5,000 returns; we would be looking for 2,500 returns.
In addition, the ministry has taken a risk management decision to basically exempt the very small, inactive cemeteries. In the cemeteries world, you have to take into account the fact that often you're dealing with a pioneer cemetery located in the back 40 acres of a farmer's field and the books and records are kept by a volunteer -- it may be the farmer himself -- and often it's very difficult to ask these people to submit detailed financial returns. We certainly do ask and we certainly do follow that up with a compliance letter when they don't submit. But in the event of non-submission from low-risk cemeteries, do we send an investigator to collect evidence for the purpose of laying a charge? We would look at that on a risk basis. If they don't have trust accounts, because they're 100 years old and they weren't required to have trust accounts, if they aren't active, if they aren't burying anybody, if they're small -- say, less than 10 burials per year -- we would act accordingly. We would use a softer touch than to go in and lay a charge or something of that nature.
On the other hand, for larger cemeteries, which may be commercial in nature, which are active, which have significant consumer monies in trust, if we didn't get an annual return we would certainly put that as a serious issue in terms of our risk management enforcement list and proceed accordingly.
Again, to the question from the member, I would say that our commitment going forward is to take steps to improve the quality of cemeteries data. We've made important strides in that direction, and as of today we believe the registration records are virtually complete.
In terms of the annual returns, we would continue to make headway in that area. Our hope is that on a risk management basis we would follow up with cemeteries and deal with the active ones, the commercial ones, the ones that have trust accounts first.
The Chair: Could you provide to the committee in writing, perhaps later, a breakdown of the amount in the trust account? I raised this in our little briefing session before. My concern was that there would have been an overstatement of the problem by the auditor in terms of how many cemeteries have trust funds that are significant. I don't know whether you can provide that to the committee or not, but I would appreciate seeing it. In other words, how many have trust funds over $10,000, $50,000, $100,000, $1 million or whatever it is? In my view, the auditor's report doesn't present perhaps a fair situation with regard to risk of people disappearing with --
Mr Dowler: We can certainly follow up with detailed information for the Chair's question. I would say generally that your assumption is correct. The majority of cemeteries would be older in nature and therefore wouldn't be required under statute to have trust accounts. The trust account requirement came in in the later part of the 20th century. Many cemeteries, of course, predate that.
Mrs Julia Munro (York North): Thank you for being able to join us here this morning. I have two questions. The first one deals with the problem of the natural gas pipelines and the kinds of issues that we have seen in those areas. Certainly in the auditor's report he talks about -- most of them -- the damage done to underground pipes. In the material we were provided with it was outlined that timeliness was such an issue for people who are waiting for detailed information with regard to location. Obviously, this is one of multi-responsibility in terms of people who are involved in the actual digging and people who are supposed to be responding to more detailed information.
I think our job here is to see it from the point of view of the issue of public safety. So I wondered whether or not you could give us an idea, from the ministry's perspective, of what kinds of initiatives or leverage -- you choose the term -- you can see as valid mechanisms to increase the issue of public safety. At the end of the day, that's obviously what our biggest concern is.
We have been working, particularly since last May, when there was an unfortunate and very tragic accident, with the Ministry of Labour, the Technical Standards and Safety Authority and ourselves to look at how we might better enforce together what we already have and also what gaps there might be. We've done a fair amount of work.
The Technical Standards and Safety Authority is very proactive in chairing the Ontario common ground alliance, which is a voluntary alliance of those regulators who have stuff underground. This is a sort of very interjurisdictional thing. Many organizations are responsible for regulating things under the ground. TSSA, the Ministry of Labour and ourselves don't have all of it.
Mr Dowler: In terms of the work that the TSSA has done in this area, they actually have taken steps to educate over 2,000 excavators in the last year, and they have plans to do an even higher number of educational efforts in the current year. The human factors behind excavation are a really important risk driver that does contribute to incidents. The TSSA has recognized that in their root cause analysis of incidents and in their analysis of complaints, and as a result they've taken steps to try to improve the education of people who work backhoes, work shovels and deal with the excavation process.
In addition to that, TSSA and the government, as well as the previous government, have recognized the importance of getting really good incident data to the authorities so that the authorities know and are able to identify the root causes of incidents. To better improve those data, the Technical Standards and Safety Act was brought into place with a provision that requires all operators to submit incident data as a matter of statutory obligation. As well, for the Electrical Safety Authority, a similar provision exists in the electrical safety code, which was brought in in 2002.
It's the obligation in regulation for each operator who experiences a major incident to report that to the responsible authority so that they have both an opportunity to respond if it's that type of an incident -- a serious incident which perhaps would require an investigation -- and the opportunity to simply look at the root cause of the incident and try to take responsible compliance action or educational action to deal with it.
Mrs Munro: If I could just ask further on that, it would seem to me that from the perspective of the person who is going to do the digging, you can provide those people obviously with further education on understanding the importance. Is there equal pressure on the part of the provider of whatever line it is that we're looking at to respond in a timely way for these people? It seems to me that you could be doing all the work on the side of the excavator and the person digging, but they've got to have the corresponding partnership on the other side.
Mrs Munro: My second area comes from the part of the report that deals with ONHWP. In his report, the auditor identifies two of the areas that receive the most complaints: one of course being that its services are biased in favour of the builder over the consumer, and the second one being the bias against small builders over big builders.
I realize that in the interval since the original audit was done, the ministry and the organization have signed a memorandum of understanding. But speaking from the perspective of a local member, I can tell you that those two points of complaint would stand very high, in my experience, with regard to individual homeowners, particularly I think the question of understanding what is the responsibility of ONHWP vis-à-vis the homeowner and understanding the limitations of ONHWP's mandate vis-à-vis the builder.
These are the two critical issues, in my view, and I wondered whether you could give us some specific information in an outline of how you have responded, I'm assuming in that memorandum of understanding, to the kinds of complaints that we would see in our communities.
Ms Corke: There are two activities that we've been undertaking at the governance and accountability level with ONHWP. We can address the specific questions about what ONHWP is doing to deal with bias, but let me talk for a minute about what the ministry is doing.
The two areas that we've been looking at are, first of all, trying to deal with more transparent reporting and complaints management and that kind of thing. So in the letter of accountability that we signed with ONHWP this summer, we do ask them for a lot more information, data and reports on their complaints handling, the investigation and enforcement work they do, that kind of thing, and regular quarterly reports.
The most important thing I think from the ministry's point of view is to try to make sure that the perception of bias in the way the board of directors works at ONHWP is addressed. We are in the process of negotiating with ONHWP, with OHBA, for ministers' representatives. On the other delegated administrative authorities, about 25% of the board membership is what we call public interest ministers' appointees. Some of those boards also have other public interest appointees, but we have three or four ministers' appointees on those other boards. The ONHWP statute doesn't require us to do that with ONHWP, but we are negotiating that and there has been agreement that we will have ministers' appointees on the ONHWP board. That's one thing that we're trying to accomplish.
Further, we're trying to accomplish a different arrangement for the nominations process, which at the moment is completely controlled by the Ontario Home Builders' Association. I think it's important to remember that this is not a delegated authority like the others; it's not under the 1996 statute. It in fact was a voluntary program that was set up in 1996 by the house building sector and was then taken under statute and sort of formalized and codified. So there's a strong history of builder ownership and responsibility for this program.
Having said that, work is seriously underway now to try to mimic aspects of the other administrative authority frameworks, even though the statute doesn't say so, to try to get that kind of transparency on the numbers and to understand where the builder money is going, how much of it is being spent on consumer education, builder education, that kind of thing, how the compensation warranty program works and so on.
Mr Dowler: With respect to the member's question about improved information for consumers, a number of things have come forward recently from the Ontario New Home Warranty Program which would assist your constituents in that area.
First of all, they have had for a number of years a builder rating system on their Web site, which has been very helpful in terms of transparency and giving consumers information when they're selecting a builder. There have, though, been some concerns raised about the actual process, the actual mathematics that go into the builder ratings. As a result, the New Home Warranty Program has responded and it provides much more comprehensive information now on builders in terms of the number of years they've been in business, the number of conciliations they've had, the number of chargeable conciliations they've had -- much less of a rating and much more unvarnished peer information that consumers can use. It's on-line, it's available, word-searchable; quite simply, to select a builder that has a good track record.
In addition to that, the new home warranty program and actually the Ontario Home Builders' Association nomination committee have put a number of measures forward which should improve consumer protection under that program. The first thing is they've put in place a customer safety standard, which provides legal time frames for consumers after which time they have an ability in law to go to the warranty program and basically exercise their warranty rights. So there are now clear legal time frames that have been put in place.
Additionally, there is a homeowner information package, which is now provided on possession to homeowners so that they understand their rights and the builders' obligations under the mandatory warranty program. That's a document that's prescribed and put out by the warranty program which has to be received and signed back by the consumer.
They've now doubled deposit protection for freehold homes, from $20,000 to $40,000, which is helpful to consumers, particularly in the Toronto market where house prices have gone up considerably and deposits have gone up considerably.
They've introduced a new consumer service centre, a new contact centre, so when consumers call they can hopefully get better response metrics over the phone, get better access to information and find out the status of their complaint that much quicker.
As I mentioned, the Ontario Home Builders' Association , which actually runs the nominations committee for the board of directors for ONHWP, have introduced a new, more transparent process. They've documented their process for board selection and have actually published that now, so if anyone wants to know the type of process they go through in selecting board members, that's now available in a transparent format.
On the cemeteries issue -- only because it was what you started with -- do you have any statistics or sense of where we're at today compared to, say, 10 or 15 years ago, when it comes to compliance, both making sure that trust fund deposits are made and that people have reported as per what's under the regulations? Are we any better off today than we were 10 years ago, I guess is the question.
Mr Dowler: As I mentioned, during the audit process the branch has put in place a completeness project with respect to cemeteries data. They have looked at two observations that the auditor drew to the branch's attention. The first one was with respect to the completeness of cemetery registration files, which is to make sure that for each of the 5,000 cemeteries we do have a record of registration on file. As I indicated, our internal audit testing would indicate that, as of today, to the member's question, we are virtually 100% complete in terms of that database. We think that is encouraging.
In terms of the annual return, which is the document that we would use to get a declaration as to the status of a cemetery's trust account, if they're required to have one -- some do, some don't -- we did send out letters in 2003 to every one of the 2,500 cemetery owners across the province asking them for their annual return. We then focused on the 1,359 large active cemeteries in the province. We received back 1,359 returns.
Mr Dowler: Sorry, 1,359 returns were received after mailing to 2,500 owners. We have sent out deficiency letters for those owners who either didn't respond or who did respond but where the information they submitted was --
Mr Bisson: That's not my question. That's interesting information, but my question is, if you took a snapshot of the industry, to make it fair, 15 years ago, when this audit was done and carried out, would we be any better off 15 years ago as far as compliance as to what it was at the time of this audit?
Mr Dowler: This is a little bit speculative, but I'll offer these thoughts and, Vishnu, you can amplify if you'd like. There were not as many cemeteries in the province that were required to have trust funds 15 years ago. The trust funds, for the member's benefit, are there to set aside a principal which pays for the care and maintenance of the cemetery. Cemeteries are a perpetual obligation. The trust fund obligations came into being midway into the 20th century, in the 1950s. So I would say, 10 or 15 years ago there weren't as many cemeteries that were required to have trust funds. I would conclude from that that probably cemetery maintenance wasn't as assured to consumers as it is today.
Mr Bisson: I just go back to the ministry and I ask the question: Do you feel that we're any better off, as time goes forward -- not even forward. From the time this audit was done, with the snapshot that was taken by the ministry, are you feeling confident that there is no difference, significant difference, less difference, with regard to compliance on the trust fund issue? Is that becoming an issue all of a sudden? That's what I'm trying to figure out. Let's start with the trust fund first.
Mr Bisson: I hear you and I commend you for that, but it's not my question. My question is, was compliance on the trust fund 100% 15 years ago? You were doing that yourself, so you must have had the stats.
Mr Bisson: I'm just trying to figure out if there's a trend with the industry. This is the not the fault of your government, their government or my government. That's not what I'm after here. I'm just wondering, is there a trend within the industry, for whatever reason, where there seems to be less compliance when it comes to the trust fund issue? Are we seeing that as a trend? That's what I'm asking.
Mr Dowler: Yes, OK. In terms of our complaint statistics, which I would use as one indication of whether or not we have a compliance issue, my recollection is that there's not a dramatic increase in complaints on the cemeteries front. We certainly have had issues with respect to trust account defalcation, in which case we've laid charges and gone forward on that basis. But they tend to be sporadic and rare, I would say, compared to other fronts, where we have quite a significant magnitude of complaints.
Mr Bisson: I'm just asking the question because -- I don't know if other members have run across the same thing; I do know that there have been complaints within my own constituency in regards to some of the care and maintenance of older cemeteries. These are cemeteries that were in operation 10 years ago. I'm just wondering, with tougher times economically, if the owners of cemeteries, either municipalities or private individuals, because of tougher economic times, are saying, "Well, I need that money to deal with today, never mind about tomorrow"? I'm just wondering if there's a trend developing.
Mr Dowler: One complaint we do hear about that may be the complaint the member's referring to is that the type of returns on existing trust accounts are not sufficient to keep up with maintenance bills that cemeteries are facing. That's been a function in many trusted environments because interest rates have fallen so dramatically. What would have been quite an adequate return on investment 10 years ago -- a 10% interest rate -- in today's low interest rate world can pose some issues for cemeteries.
Mr Bisson: Which brings me to my next question. I'm not an expert on cemeteries, and I hope to never be. I would rather look at them from this side, if you know what I mean. The complaint that I do get from municipalities and at least one private owner is that the cost of maintenance is going up. Fuel, labour and everything else is much more expensive. Nobody has come to me and said, "We've not deposited the money into our trust because of that," but I'm just wondering if that's what's happening. If that's the case, is there a need to review how much money is going into the trusts? I don't know if there's a formula, or how you do that. But is there a need to take a look at that? Because if there is legitimately an issue of cost for the operators, and the regulation or legislation that governs the trust fund is not adequate for providing future consideration of maintenance, is it time that we take a look at that? That's why I'm asking, is there a trend?
Mr Dowler: I think there is. We do hear about concerns from managers that maintenance costs are rising faster than the interest which is generated by trust accounts. That's an issue that we hear for all types of trusted environments right now.
Is it time to look at the amount that's set aside in trust? Well, with the new bereavement legislation, which was approved by the Legislature just before Christmas of last year, we will be looking at the treatment of things like capital gains, whether a capital gain can be treated as income which can be used by the cemetery for the purpose of maintaining its property. We will be looking at other issues of that nature. So that issue, I would say, is being examined.
Mr Bisson: Are you getting complaints from operators, owners -- you talked about some of the complaints that you're getting from the operators -- that in fact the current scheme is not adequate to deal with future consideration of maintenance?
Mr Dowler: I would say what I said earlier, which is that operators have expressed the concern that they're just not getting enough income from the types of investments they're allowed to purchase: GICs and things of that nature.
Mr Dowler: We've had a lot of interest in expanding the treatment of capital. That's been an issue and is currently being examined in the course of developing regulations under the new legislation. That could potentially assist some members who have portfolios that are generating capital gains they're currently not allowed to touch.
We've had some interest in the issue of how much is set aside for care and maintenance, but I wouldn't say it's at the top of the list. We just did large-scale consultations on the bereavement legislation the summer before last, leading up to the new legislation. I don't think the groups we spoke with raised it as one of their top five issues, but it is an issue that municipal cemeteries and some others have raised.
Mr Bisson: I would just wonder out loud to committee members, the Chair and the auditor if that is something we need to be concerned about at one point. I don't know if some mechanism through the parliamentary assistant could bring that back to the ministry. I just worry, because I know that municipal operators have raised it with me. We've had some complaints about the maintenance of cemeteries: people who were buried 15 years ago and the tumbleweed is growing. Maybe we need to look at that, and I would just signal that.
Just a last question on cemeteries, and then we can deal with other issues in another round. It's a little interesting, maybe as a result of that issue, that about two or three years ago -- I've been a member here for 14 years -- for the first time I started to receive the odd complaint not just about the maintenance of cemeteries but actually about burials. Are you seeing an increase in the amount of complaints you're getting in regard to families complaining about people being buried in the wrong plots, that kind of stuff? I'm getting those, and I never used to get them before. Is something different happening? Maybe the guy who's burying them doesn't know how to read a road map.
I'm just saying it's kind of odd. Who has ever gotten a complaint from their constituents? It's not the kind of complaint you get at your constituency office, but in the last year I've had two complaints of people buried in the wrong plot, where family members go back after trying to find the body and it's not where it's supposed to be; another one I don't even want to get into, because it was the most bizarre thing I've ever seen.
To the member's question: We certainly do get some complaints about cemeteries of the type he's mentioned in terms of incorrect burials or survey issues on sites and that kind of thing. Is it an increasing trend? I don't think it's something the staff would indicate is a dramatically increasing trend. As the deputy mentioned, we get 60,000 consumer complaints a year on everything ranging from motor vehicle repairs to roof renovations to cemeteries to theatres to collection agencies. Historically, cemeteries would not be an area that would make our top 10 list.
Mr Dowler: OK. But when issues do come up, they are significant. Certainly when someone's relative isn't interred properly, that's an issue that gets people very emotional and that the registrar for cemeteries takes very seriously. If any member here today has complaints about cemeteries from constituents, please contact us and we'll put you in touch with the registrar. He has lots of authority to pursue it under the act.
The Chair: May I just ask a clarifying question along Mr Bisson's line? In terms of the responsibility of the cemetery to collect from someone who purchases a plot, is there any requirement for what they must charge in order to ensure there is a maintenance fund that would result out of that capital that would go in perpetuity?
Mr Dowler: Yes. For cemeteries that sell interment rights today, the current act does require that 20% of the purchase price be set aside and put in trust as a care and maintenance deposit. That's a provision that didn't exist prior to the 1950s.
The Chair: That says 20%, but it doesn't say 20% of what. In other words, if you're buying a plot out in rural Ontario, the plot may sell for as little as a couple of hundred dollars. Twenty per cent of $200 is $40, which is not going to care for the land. It's not a realistic number. Is there no requirement that they collect any certain amount to ensure the ability to maintain it in perpetuity?
Mr Dowler: That's correct. And that has to be trusted. Sorry, I'm just being corrected by staff, and it's 40%; my apologies for that. Really, that is the statutory requirement. It may be less than that in some cemeteries. Many religious cemeteries, for example, will waive that requirement, and much of their maintenance is done on a volunteer basis. Church members will cut the grass and do things of that nature.
Mr Dowler: Only if the cemetery is abandoned. The municipality is there as the last resort. In the case of a church ever saying, "Sorry, we can't take care of our members any more," and walking away, the default would then go to the municipality, which serves as the statutory backstop, if you will.
The Chair: I understand as well from talking to some of my local cemeteries that about 40% or 45% of remains are cremated rather than buried. Does any of the money they might be involved with, in terms of cremation, go toward perpetual care?
Mr Dowler: There is a $150 amount that goes with cremains, as they're called -- cremated remains. The maintenance expenses that are associated with cremated remains tend to be somewhat lower, because they occupy less real estate. They're typically housed in columbaria or niches, which are typically much more modest than a full burial would be.
Given that I think we're all agreed that there isn't a whole lot of interest in hassling the 100-year-old graveyard attached to a little country church but there are issues in making sure bigger cemeteries are properly maintained, are you within the ministry satisfied that you have the correct criteria for the ones you consider to be at higher risk and that you need to follow up on? For example, you could easily have a fairly large cemetery that is not doing many active burials because they've sold all the plots, so you get a few burials in remaining spots in family plots. So, on a volume basis they don't clear the hurdle, but they may in fact have quite large trust accounts to maintain. Are those people getting reviewed actively by you?
Mr Dowler: I think the member raises a good point. As I mentioned, we're in the process of developing more enhanced risk measures to look at which cemetery files would get first review by the enforcement staff. The type of characteristics you're mentioning would be exactly the things staff will be reviewing to make sure we're putting first things first from a public-risk perspective.
I would say, as well, that these numbers are never cut in stone. As we get complaints over time, we use that complaint information to further calibrate where the risk is. So, if we find we're focusing our efforts proactively on large cemeteries that are active, but we're getting a lot of complaints on large inactive cemeteries -- to your comment -- then we would obviously change our ranking system and notch up those we're getting complaints on.
If I can go on to another area, when we look at the delegated authorities, just reading through this as a novice, the thing that struck me as quite odd was that the ministry seemed to have limited ability to say to a delegated authority: "We want you to produce this data. We want you to be accountable in this way." We have the example that the auditor has pointed out of the TSSA, where the data seems to magically be revised from year to year and, depending on which way they are revising the data, the trend line -- things are getting worse, things are getting better -- goes all over the place while they play with the numbers. Then we go on to the home warranty program and they just seem to have stopped collecting the data. The ministry doesn't seem to have any authority to lay out their expectations.
My question is around the whole legislative framework under which these delegated authorities are operating. Is there a legislative framework that is flawed or too weak to actually allow the accountability measurements from the ministry to be in place?
Ms Corke: In terms of the new home warranty program, we don't actually have in the statute the ability to require information. We've patched that up now with an accountability letter where we've asked specifically for regular data and regular information on a quarterly basis.
Ms Corke: We don't have the ability to demand on that particular one because it's a very old statute. It's not a modern governance and accountability framework, so we've tried to mimic that, as I've said before. In terms of the Technical Standards and Safety Authority, though, and the other ones, we have every right to ask for whatever it is that we would like to have, that we need for governance purposes. In actual fact, the story of the Technical Standards and Safety Authority data piece that you are referring to is a bit more complicated than it seems. The ministry has very regular reporting from the TSSA. Also, as I've said before, we are part of the governance structure in the sense that Mary Shenstone is our board member there and is a member of the audit committee, so is fully aware all the time of all of the data.
What actually happened with the Technical Standards and Safety Authority, in very broad terms, is sort of a series of comedies of errors, if you like. There was some clerical error; there were some data revisions because the TSSA has invested in what they call a root-causes analysis. When then inherited data from us in 1996, it was an old, clunky system called Index and it didn't really disaggregate very well very much of importance. So what the TSSA has done over the last seven years is to invest heavily in disaggregating this data into serious and non-serious and other kinds of incidents like near-misses. They've reached out to their industries and double-checked and reclassified some of the data in order to get at root causes. What I'd like to say is, when the ministry was responsible for what was then the technical standards safety division, we were very much, I would say, gatekeeper regulators. Our role was pretty much limited to how well we enforced the letter of the law and the regulations.
TSSA has taken on themselves not only that role, which they do very well, but also a further role to look at actual safety outcomes and what the causes are; so public safety in a broader way. In the process of doing that they have rejigged their data base and reclassified and done some very solid analysis. In the process of that they've mostly been extremely transparent. When you look at those reports from year to year and quarter to quarter, most of the time they've acknowledged the variances, why things have changed. Once or twice in the period of time there were clerical errors in doing that, which we subsequently sorted out.
The broad answer to your question is we can ask the TSSA and the other 1996 statute-delegated authorities for anything that we like at any time, and we do. We have regular reporting, regular frameworks and regular meetings to go through it. Some stuff slipped through and we learned a lot from that. It will not happen again. Things have been put in place now where those kinds of clerical errors can't be made. There will be third-party audits of the data that TSSA receives when they report it to make sure that it's reported correctly. We have compliance protocols we've put in place with TSSA so that we can understand what kind of incidents require what kind of compliance activity. We have a performance score card that we're putting in place to make sure that we at staff level always understand if anything has changed and why it's changed and what the trends are.
Just before I finish this -- because it's a pet peeve -- I'd like to say that even if the historical data were being looked at again and disaggregated and sorted and worked out for analytical purposes, never at any time did the ministry wait for historical data or historical trends in order to plug a safety gap. So all the time while this stuff is happening and the data work is being done and the $5-million project is being done, if ever there was a serious safety incident out there, we were right on it with the TSSA, taking immediate action.
An example of that would be the tragic August 1998 bungee-jumping accident. We didn't wait till the next year to see if bungee-jumping accidents had doubled or tripled. We took immediate action with the TSSA right there and then. That's the way that it's been. I guess the problem has been that we were not able to satisfy the Provincial Auditor that we understood some of those variances in a public and transparent way. We've learned a lot from that.
Mrs Sandals: But you're satisfied now that the data will be comparable from year to year and that those data problems that have been underlying that are sorted out, and as we go forward, you can get what you need and it will be comparable?
Ms Corke: Yes, I'm satisfied that the new system that the TSSA has put in place now with the disaggregated and cleansed data and all of the rest of it will give us what we need on a regular basis. If it doesn't, we will be monitoring it regularly and we will go back and ask for what we need in addition.
Mr Dowler: Maybe just two quick points. TSSA and ESA do collect data from a wide variety of sources. It's not just their own internal investigation files that give rise to the state-of-safety reports. They collect data from WSIB, the Ministry of Labour, the Ministry of the Environment, utility records. They're trying to get not just the hard incident, the major incident information which comes to their attention as a matter of statute; they're also trying to get at near misses, things of that nature which allow them to better understand the risk, the root causes and to set up a better compliance program.
Given the breadth of these data, there will be revisions to data series over time, as there have been in the past. I think what the ministry will be looking for in the future is clear documentation where a revision is made, a footnote indicating that there has been a revision to historic series and the reason for that revision, whether it's a change in definition or better data capture, but some explanation as to why the data are moving around.
The second point -- and this just builds on the deputy's comment -- is that both TSSA and the Electrical Safety Authority have given an undertaking that their external auditors, KPMG and Ernst and Young respectively, will review the state of safety reports, not on a full CICA audit basis -- because these are not financial documents -- but on the basis to ensure that the data that are presented are reconcilable back to the sourced information -- and I mentioned that it comes from a breadth of sources -- that basically, what's published lines up with the data that are being sourced. That should go a long way to making sure that the information that's published is as correct and as reliable -- to use the auditor's term -- as possible.
Mrs Sandals: Just to ensure I'm absolutely clear, when you say with the exception of the home warranty program, that you can ask for whatever data you want, what you're saying is that when you ask, the legislation is framed in such a way that the delegated authority will provide the data you're asking for.
Mr Dowler: Certainly with respect to TSSA, we have a statutory ability to obtain information. With respect to the Ontario new home warranty plan act, as it's known, I can't recall if we have a statutory authority to require books and records and reports, but we certainly have the letter of accountability and contract with them, and they've been more than forthcoming with information as we've requested it. So it hasn't been an issue, now that we've signed the accountability letter as of last summer with the Ontario New Home Warranty Program.
Ms Corke: I have the statue in front of me, the government's accountability statute, and in fact we are permitted to ask for a report from the delegated administrative authority. "The report shall be in a form acceptable to the minister and shall provide the particulars that the minister requires."
Ms Corke: Now, I just need to be a little bit clear. The Board of Funeral Services is the other one that is not under that statute. So we don't have the same ability to oblige the Board of Funeral Services for information.
Mr Zimmer: My question is about the allocation of inspection resources, drawn from a comment you made in your opening remarks, Deputy Minister, regarding video inspections and that there were so few inspections vis-à-vis so many complaints about collection agencies. You said most of those complaints about collection agencies are about harassment on the telephone and there's no way to follow up on that, so fair comment.
On page 99 of the Provincial Auditor's report, we see there were 4,000 complaints about collection agencies, and you've explained why it's hard to follow up on those complaints, because they are essentially about telephone call decorum. But there were also 2,100 complaints about credit reporting agencies. That's information on someone's file, which can be followed up on. There were 1,900 complaints about motor vehicle repairs; that can be followed up on. There were 744 complaints about loan brokers, and of course only eight complaints about video retailers.
The Provincial Auditor says, in the first sentence at the top of page 99, "Our review revealed that the ministry did not deploy its inspection resources based either on any formal assessment of risk to the public and consumers, or on the number of complaints received for each of the industries it monitors."
The Provincial Auditor goes on to say, in the last paragraph on page 99, "In 2001, the ministry agreed with recommendations made by an outside consultant to devote at least half of its inspection efforts to responding to complaints and use the remaining half for proactive inspections, allocating inspection resources equally between collection agencies, cemeteries, and theatres. Nevertheless, at the completion of our audit in 2003, most of the inspection resources were still devoted to inspecting video retailers."
Ms Corke: I am going to ask Rob to take this one. But just before we begin, I'd like to draw attention to the fact that not all of that legislation has inspection powers. Other kinds of compliance and enforcement activities do go on, for instance, in those other kinds of statutes, like the loan brokers; there's no inspection. But I realize that's not your entire point, so I will ask Rob --
Mr Dowler: To answer your question directly in terms of the 2001 commitment, the ministry did do a risk management study. We did develop a framework in conjunction with Alp and Associates, a recognized risk management consultant, and they suggested an allocation of field inspection resources along the lines the member indicated.
Why didn't we implement that immediately? The answer to that is that for field inspections, we have found that with the new stickering requirements introduced in September 2000 dealing with adult video stores, we have still seen a fair number of compliance issues in that sector. The inspectors are still seeing product which is unstickered and which may violate the board's guidelines. It may contain material that is explicit or that involves minors or violence or things not permitted under Ontario law. So on that basis, for the three people who do field inspections in the ministry's branch, 95% of them in 2001-02, as the auditor pointed out, were focusing on the theatres area.
But the situation today is that we are completely current with the risk management framework that was developed. As the member mentioned, the consultant recommended that we divide our field inspections one third to theatres, one third to debt recovery and one third to cemeteries. Theatres, as of today, stand at about 32% of our field inspection resources.
The other point the deputy made in her opening remarks was that we respond to every complaint we get. Staff choose what they consider to be the most effective response in their kit bag of regulatory tools.
The member indicated with respect to collection agencies that about 86% of the complaints we get are alleging harassment of debtors. Staff have found historically that sending an inspector out to a call centre that is a collection agency to try to observe harassment as it's occurring in the field is not a very effective response. What we do instead is commission an investigation. Investigations, in our database, are separate from inspections, and that's supported by recent court precedent. Our investigator, who is a provincial offences officer and a special constable, goes out and examines the nature of the complaint made. The investigator interviews the complainant bringing the information to the ministry, usually over the phone. Usually the business is contacted to get their side of the story.
One of the first things in a harassment case that the investigator would look for is corroborating evidence that would withstand scrutiny either at tribunal or in court. So if there is taped information -- some consumers do come to us; they have their answering machine and they may press "Record." In fact, that's a tip we always give consumers, that if they feel they are being harassed, just press "Record" on their answering machine and make a tape. That's hard evidence that can be let in at tribunal or in court for the purpose of sustaining a charge or an administrative action against a collector or a collection agent.
Mr Zimmer: With respect, I appreciate that those 4,000 complaints about what I call telephone decorum are pretty hard to investigate, but there were 2,156 complaints about credit reporting agencies. That has to do with misinformation on the file, and that's an objective record. You can go and get the file and open it up and look at the file and see what's there and ask the complainant, "Is that information right or wrong?" I would argue that misinformation on your credit file is a very, very serious matter for a citizen and yet, of those 2,100 complaints, there was one inspection.
Loan brokers: 744 complaints from people who were borrowing money or involved with loan brokers and had some problem with the loan broker. There are serious consequences for people's money that they are trying to borrow or pay back, and yet zero inspections.
On this video thing, there were 1,599 inspections. Now, tell me what this sticker thing is all about, because I can't visualize it in my mind. But surely mailing these out to the video companies and saying, "That's the sticker for information you're supposed to put on the video. Make sure it's on, because we're going to be randomly inspecting you," would have brought them to heel. I don't understand why the ministry's risk assessment of the videos seemed to be so much greater than the harm that's done through misinformation on a credit file, which hurts your credit record; through vehicle repairs, and God knows how many people are out there victimized by these repair shop places; and then loan brokers, all the, for lack of a better word, loan-shark-type places that are operating, and yet we do zero inspections.
Mr Dowler: As I mentioned previously, the amount of effort that we expend today on adult video stores has gone down to about 32% of our total inspections, and that's where the risk management experts said we should be.
Why do we do that? Well, I guess the statute does put a duty on us to make sure that product which isn't approved by the Ontario Film Review Board isn't in distribution in retail stores in Ontario. In the adult world, where the sticker is required -- the sticker is only required in what would be called X-rated video stores, and in that world, we have had issues with respect to non-compliance. As a result, the three people who do field inspections for the ministry have tended to focus their efforts in that area. Today it's down around 32%. That's where we think it should be.
In regard to the other areas you mentioned, it's quite correct that we do very few field inspections under the Loan Brokers Act and we do receive a significant number of complaints against loan brokers. A loan broker in Ontario, as defined under that piece of legislation, is typically a telemarketing boiler room operating on an illicit basis. The act is basically a prohibitory statute that says anyone who takes an advance fee for the purpose of arranging a loan before the loan principal is delivered is guilty of an offence. As many members in the room will have seen, Ontario has taken a number of knocks internationally for the number of criminal telemarketing boiler rooms operating in Toronto. They're phoning senior citizens and telling them they may have won a prize or telling them, if they've had credit problems arranging a loan, that the boiler room will organize the loan and all they need is an upfront fee of $1,200 for insurance or for processing or something of that nature.
With the Loan Brokers Act, we don't do field inspections because our finding is that these criminal operations will disappear as soon as an inspector shows up. As the deputy mentioned, there's no inspection authority in that act. It's a simple prohibitory statute, which has been quite effective. When we do get complaints, we move directly to investigations and collect evidence for the purpose of laying a charge. We've laid over 1,500 charges since the act was brought into place in 1994-95. Given the nature of this complaint and its increasingly cross-border nature, we also have engaged in a strategic partnership with three levels of government law enforcement in Ontario: the federal government, through the Competition Bureau, the Toronto police service, ourselves and the OPP's Project Phonebusters. We also have an MOU with the US Federal Trade Commission and the US Postal Inspection Service. Under that strategic partnership, we've returned over US$1 million to consumer victims. We've closed down 33 illegal, illicit criminal telemarketing boiler rooms in Toronto. As the deputy mentioned, it's won three international awards for the work the ministry has done.
So it's quite true that we do no field inspections in that area. I don't know that staff would ever recommend to the committee that we start doing field inspections in that area. As soon as an inspector shows up, the room would shut down and move.
Mr Zimmer: Well, that's the greatest protection of all. If you've got a shoddy person out there and all you have to do is send around an inspector and, as you say in your own words, that has the effect of shutting them down, what a marvellous way to protect the consumer.
To your point, we do make a visit to these types of operations. We don't tend to visit with inspectors. We visit with investigators and with the Toronto police service. In fact, lately we've been using the tactical unit to make visits to these types of operations because of the amount of weaponry and other material that's held on site.
I think we're doing what you're asking. We are making a visit to the premises. We are visiting with investigators, police officers, as opposed to making a field inspection for the purpose of giving them a compliance letter or something of that nature.
Mr Zimmer: No. I've made the point. Just let me note that the ministry response to the 2003 report is that they're going to commit to ensuring that inspecting resources are appropriately deployed, so I'm assuming that next year and in 2005 and 2006, we won't have to ask the same question about why two or three years went by without picking up on the commitment.
Mrs Carol Mitchell (Huron-Bruce): I do, and my question is with regard to the marketplace standards and services, your outcomes. The charges laid were 533 in 2002, and the convictions were down sizably from 2000-01. I would like to know why.
I certainly understand what you use as indicators and that type of thing, but when I look at the outcomes, it doesn't support what you used as the answers to the previous questions, as you used for the indicators. So maybe once you clarify that for me, then I will understand.
Mr Dowler: The charges and convictions numbers do move around a fair bit on an annual basis. It depends largely on the nature of complaints we're getting and the nature of the actions we're bringing to court. So if we're doing a lot of work under the Loan Brokers Act, we would tend to lay a large number of charges, as opposed to going forward with, say, administrative actions. An administrative action would be something the registrar would do, like a suspension or a revocation or a caution letter. So if we're getting a lot of complaint volume under, say, the Loan Brokers Act, you would tend to see a lot of charges and, therefore, a lot of convictions in that year.
As I mentioned, under the Loan Brokers Act, we've laid 1,500 charges -- approximately 1,500 convictions. The years when we did that activity would show us being very busy in court. But in addition to going to court, we also go to tribunal. We go to the licence appeals tribunal with registrars' actions: suspensions, revocations, things of that nature. So if we're seeing a lot of complaints under the licensing statutes, you would tend to see fewer charges, fewer convictions, but you would tend to see more registrars' actions: suspensions, revocations, caution letters, things of that nature.
Mr Dowler: Yes, and we do see that typically in a year -- maybe this will help -- the branch is able to work anywhere from 120 to 180 cases, all the way from complaint through investigation through to prosecution. Associated with any one of those cases, you may see one charge or two charges, or in some cases you may see 40 counts under the Business Practices Act. It depends on the nature of the case and the nature of what we're investigating. Again, it's a difficult measure to really draw performance conclusions from, because it does move around a fair bit.
Having said that, we look at it as you're looking at it now, and we try to make sure that we're seeing -- first of all, we look at making sure that where we do commission an investigation, we are seeing results in court that send a deterrent effect to the people we're dealing with. That's a long way of saying we don't like to lose in court. We look at those numbers for the purpose of measuring the effectiveness of our investigations activities.
Mrs Mitchell: The charges laid were also increased sizably from the previous year. Then when I go to convictions, it's down substantially. I guess what I'm looking for is some assurance that there will be some type of checks and balances to ensure that what you're bringing forward as concerns or charges are in fact going to reach convictions, or what are you doing then?
Mr Dowler: Yes. You'd want to be a little careful looking at the data that you're referring to, because the convictions that you see are actually related to the previous year's prosecutions and investigations. You won't see a one-to-one match. If the previous year was focused mostly on registrars' activity, then in the subsequent year you won't see a lot of convictions. You'll see a lot of work at LAT, a lot of suspensions, a lot of cautions, things of that nature. One is kind of a lag function of the other. It's difficult to just look at the raw numbers year over year.
Mr Bill Mauro (Thunder Bay-Atikokan): Ms Corke, just a couple of questions I'd like to go back to -- some of the information previously given -- before I ask my questions. About the administrative agreements that either are in place or are not in place, you mentioned that there's an accountability letter: "We can ask for anything we want." Is that accurate? I guess what I'm getting at is, why wouldn't we just legislate what we want so that they have to give it to us, instead of us going back and having to ask for it?
Ms Corke: No, but in the administrative agreement there's a statute which says we can ask for anything we want. Then in the administrative agreement, which is the contract we have between us, it sets out the kinds of information that we want to have from them.
Mr Mauro: All right. Just one quick one on the cemeteries, before I go forward then. There was an indication earlier that numbers in the auditor's report were somewhat misleading, and that we should only be concerned about those cemeteries that weren't following the filing requirements and the trust fund information that were of a sizable number. I guess it concerns me a little bit that maybe we're not as concerned about the smaller ones, because if they fail, their ability to support those, or the municipality's ability, would be proportional. They're probably smaller as well. So while it might be a small amount of money, it would be significant for the municipality having to take over the enterprise. I'd be interested in your comments on that.
Mr Dowler: OK. I think our thought is that any time we get a complaint about any cemetery, in fact any time we get a complaint about anything, we review the complaint, we look at the matter that's being brought to our attention and we take the appropriate action. Small cemeteries, if we get complaints that maybe they're not being properly maintained or the types of things that Mr Bisson was referring to earlier, we would take a look at that and take the appropriate action necessary.
Mr Dowler: Yes. I haven't actually seen the report. I have asked staff to generate a report that tries to track down which cemeteries the auditor was referring to. I haven't had a chance to review the actual report that has come forward yet, but as part of the cemetery completeness project that I referred to, we will be looking at the entire database for cemeteries and making sure that we have as complete a set of records as is reasonably possible.
Mr Dowler: I think that generally the experience with delegation has been found to be quite positive. There was an independent evaluation done a few years ago by the PSTG group, an independent consultant. Their findings were that, generally, the number of inspections and investigations and enforcement activities that have occurred after delegation have been quite a bit higher than existed prior to delegation. I would think, from a public interest perspective, that's one of the first things you would look for, a sense that the delegated authorities are being as diligent or more diligent on the enforcement front as the ministry was prior to delegation. That would be the first marker that we would point to as an indication that things are going well.
In terms of the ministry's role in an oversight capacity, which I think is really what you were directing your question toward, I would say it's obviously a continuous improvement game that we're in. We're still fairly new at the business of administering delegated authorities. I think the staff have done an excellent job so far. I think you can always make a good thing better, though. I think the auditor has given us some good directions to move in, in terms of looking at outcome measures, making sure that we have reliable and good quality data from the delegated authorities. I think the commitment we have from the two safety authorities to have their external auditors take a look at the data and reconcile it back to its source material is a good one. It'll move the oversight capacity of the ministry in a positive direction. I would tend to see the experience as having been positive.
Mr Mauro: The report speaks to under-reporting on fatalities in two areas. The reason I asked the first question leads me to this one: If the ministry is to maintain an oversight function around the protection of safety for consumers and the public, yet the ministry doesn't know about four fatalities in a boilers and pressure vehicles section and five in the fuel section, it gets back to the question that I first asked Ms Corke about the agreements that exist: Why should we have to go back and ask for information? Why should we not legislate that they have to give us that information and find out about it after the fact? I'm a little bit suspect about our ability to provide proper oversight if we don't know that people are actually dying. I'm wondering if somebody could address that for me.
Mr Dowler: I think you raise a good point. I think we've indicated that steps have been taken to improve the quality of that data so that it will be reviewed by an external auditor. If data doesn't reconcile back to the original source documents, that will be something that KPMG and Ernst & Young would refer, as an independent body, to the board of directors of the delegated authorities. We all sit on the boards of directors so we, the ministry, would --
Mr Dowler: And, in addition to that, we have a quarterly report card which is generated by the delegated administrative authority. It looks at a series of measures for each of the authorities. I think the auditor has reviewed that material and has made some suggestions for improving the quality of measures that we've been looking at.
Mr Mauro: So if I could just simplify it a little bit, if there's a fatality now in one of these sectors, is it a requirement of that particular DAA that they have to tell you and the ministry that there was a death?
Ms Corke: If I could just interject for a second, in actual fact, at the moment that is occurring there is a relay of information. So the reporting is one thing. We have to be more vigilant. There were errors. There was a clerical error, some other kinds of errors in that data report. But if a death or a serious injury occurs, I would know, personally, within half an hour, and the ministry would know --
Ms Corke: There's a mechanism that requires them to tell me within half an hour. In fact, if it happens at 2 o'clock in the morning, I always know. If it's not me, then I've delegated it to somebody else in the ministry. So there is no possibility that a serious injury or a death could occur without my knowing.
Ms Corke: The issue here is that the board of directors knew, the representative of the government on the board of directors knew and I would have known. The issue is around that data project we were talking about where there were clerical errors in the transcription of data. Apparently, I'm told, that four fatalities is actually incorrect.
Mr Dowler: I think the deputy's comments are that the state-of-safety report, which is the annual report issued for the public by TSSA -- and the Electrical Safety Authority does something similar -- has contained some clerical errors in the past. You have referred to them both, two of them. Hopefully, going forward, the quality of the report released to the public will be improved through checking by an external auditor. That's the issue that's raised in the auditor's report.
In terms of our day-to-day information, the deputy has referred to the protocol that we have with TSSA, which is in writing, which suggests that whenever there is an incident that involves an injury or a fatality, as the deputy indicated, we will know within 20 minutes of that occurring. It's not a frequent occurrence, thank goodness, touch wood, but when it does happen the ministry is informed. We receive a printed e-mail which indicates what TSSA is doing in response.
Ms Corke: It's actually to the point where I can probably tell you the dates of some of the most significant serious injuries and fatalities. I can tell you that the bungee jumping was August 24, 1998, and I can tell you that the pipeline explosion that happened was May 3 last year. These things are taken extremely seriously.
Ms Corke: We've had a general rule of thumb. In the legislation, the minister can appoint up to 49%, just under half, of the makeup of the board. These things were new animals for us when we first started out and we decided that we would start out with a 25%, or thereabouts, composition for minister's appointees. All of those boards are different sizes.
The Technical Standards and Safety Authority board in particular has evolved in such a fashion that, as well as the eight sectors that it regulates -- they have one person from each of the eight sectors -- they also have about 50%, or just under 50%, public interest appointees, which include the minister's appointees. It's a very balanced board.
My experience of the boards is also that decision-making is pretty well by consensus, so things are hashed through. You hardly ever have divisive situations. People work things through. They work on objective evidence when they're making policy decisions. I would say from here that it seems to me the board composition has been working really well. If it were not to, though, the capacity exists to improve the number of minister's appointees.
Mr Mauro: That was my question, and you answered that they were included in the 25%. So, they're not. So there is 25% from the government, then the general public, then the other 50% is industry. So it's about 50-50.
Mr Mauro: My last question: There was a question earlier about the natural gas problems and the number of issues that seem to arise. What are some of the enforcements, fines and conviction mechanisms that exist for you around those incidents?
Ms Mary Shenstone: In the pipeline incident, the TSSA has already laid a number of charges, and it's in the TSSA's power to lay those charges. The ministry doesn't lay the charges. That power has been delegated to the TSSA, and it has laid a number of charges against the utility company. It laid them in September. It's the first of the organizations involved in this unfortunate incident to have laid the charges.
Mr Mauro: I think the numbers were about 4,600 incidents related to the natural gas industry. Is there a chart in here specifically relaying how many convictions or charges there were out of those 4,600 incidents in the natural gas instance?
Mr Dowler: You have to be a little bit careful to distinguish between overall incidents, which could include a number of near misses. Someone digging in their back garden, for example, may strike a shovel, uncover a pipe, call the TSSA. That would be recorded as an incident. It's important to separate what are called serious incidents.
You asked what kinds of enforcement remedies TSSA would have at its disposal. Ms Shenstone indicated that the TSSA does have the authority to lay a charge under the Provincial Offences Act, and a fine of not more than $50,000 or imprisonment for a term of not more than a year, or both. That's for individuals. A corporation is liable upon conviction to a fine of not more than $1 million. That's per count.
Mr Dowler: Not the board. It would actually be the official responsible within the delegated authority. It is the delegated authority who conducts the investigation, the prosecution, the laying of charges.
I would also mention that charges are the rarity. They tend to be used when there is felt to be evidence of some sort of malfeasance or malconduct. In many cases you're dealing with an accidental incident. Somebody strikes a pipeline not because of any negligence or malintention; it's an accident. What the TSSA can do in that case is issue an order if it's found that there's something the utility could have done better. So they have the authority to issue an order under their legislation, which is an administrative action, sort of a lower level of enforcement than a full charge, or they can take educational action.
As we indicated earlier, TSSA has trained over 2,000 investigators who are involved in digging around pipelines in the last year, and they expect to do more than that this year. So it's not malfeasance; it's just lack of public awareness, lack of knowledge about safe digging practices.
The concern with regard to delegated authorities, in my view, was least at the TSSA. That was because you had a group of people who had a multitask in terms of the delegated authority. The TSSA not only takes care of people who were involved in the gas business, they're dealing with the elevator business, they're dealing with a number of other businesses. So if you appoint someone to a board of the TSSA, not only is there a large number of public appointees, but the industry appointees are not from one industry.
So if you have industry appointments from five or six different industries, if you're dealing, let's say, with the matter of elevators and there are one or two appointees from that particular industry, the other industry leaders are not going to put their reputations in jeopardy with regard to any kind of safety matter. They are going to be looking at it with as much concern as the public appointees would be, because their reputations are on the line with regard to whatever is happening.
The concern you always have with delegated authorities, or the concern I had as the minister when they were set up: Was the industry, in terms of taking this over, understanding that the delegated authority was there for the consumer, not for the industry? The industry's interest was to create a level playing field so the bad actors couldn't charge less or provide less service than the good actors, but was the consumer being represented at the table?
My view was that the TSSA was the best of all of the DAAs because we had so many different industries at the table, and I could rely on those who were not involved with the particular subject matter to come to the best decision for the consumer. With the other DAAs that you have, I think the minister and the ministry have to be vigilant in ensuring that they continually get the message that they are there to represent the consumer. We not only have to do that with regard to the DAAs, we have to do that with regard to our health care professions, our legal profession, our engineering profession, all those kinds of things. That message has to be continually driven in terms of what you're doing. Anyway, that was my experience with it.
I guess the other advantage of the TSSA is that they are not only involved in this business but are involved in providing other services for industry. They are involved with the Canadian Standards Association. There are other parts of society that are relying on their expertise and how solid this particular organization is, which therefore makes doing business in Ontario easier. It makes it safer for our consumers, whether it's involved under our legislation or under federal legislation or whatever. So I think the TSSA has been a tremendously positive step in terms of using a delegated authority rather than having it vested in the ministry.
Mr Mauro: The last one I wanted to ask was about a comment made by the auditor in his opening remarks about the revenues and expenses as they applied to this exercise previous to devolving it to the delegated authorities. I think his numbers were that previously there were revenues of about $30 million and expenditures of about $17 million. So I'd like your comment on those numbers, if you can, and if you can tell me what they look like since they've been devolved to the authorities.
Ms Corke: We don't take in any revenues at all from those areas any more; the ministry doesn't take in any revenues. We have delegated both the liability and the administration and the fee revenue, because they are cost-recovery organizations; they are constituted as not-for-profit corporations under the Corporations Act. They run a cost-recovery organization. They are not allowed to make a profit. They plow all their fee money back into the organization. They have increased inspection and compliance resources as a result of that. They pay for public education activities that we were unable to do in those days.
What we do is we ask for an oversight fee from them, which goes some way toward paying for the ministry structures that oversee and monitor them. I think as of last year there was probably $905,000 that came in to us from the administrative authorities, which paid for a part of the sector liaison branch that looks after them, the legal and executive and policy resources that go into the ongoing refresh of the legislation, and some additional consulting money, about $200,000, that we use for expert reviews. We don't have an engineer on staff, and sometimes we need to look at a code issue where they are suggesting to us that we need to do due diligence, so we need to buy some engineering expertise. But just under a million dollars comes in to us for the purposes of oversight.
We don't have any staff. I think there were about 75 staff who were devolved back in 1996 to these small administrative authorities, and the technical standards division pretty much went out entirely, just over 200 people. So we don't have any of those expenses, but we also don't have the revenues, other than the million dollars or so.
Mr Bisson: Just an observation is that -- well, never mind the observation. The question is this: Is it more expensive for consumers to use live services that used to be done through consumer and corporate relations?
Mr Bisson: And does the ministry in any way, shape or form track what the cost is to the end consumer for services it used to provide, versus through these designated agencies such as the ESA or TSSA?
Mr Dowler: We certainly look at the process. Under the schedule to their administrative agreements, the administrative authorities are obliged to follow a certain process for the purpose of setting fees. They are obliged to consult with the people who are affected by the fees and they are obliged to notify the minister when fees change. So we are notified when fees change.
Mr Bisson: To the Chair, I'm not sure if I want this from the ministry or legislative research, but is it possible to get either research or the ministry, whoever is appropriate, to give us -- specifically what I'm looking for is ESA and TSSA, and I guess the rest of the designated agencies -- what it used to cost for an inspection and what it costs now? Can we get that? We've gotten into this whole debate where from the auditor's perspective we want to make sure that the constituent or the citizen, the taxpayer, whatever you want to call him, is getting good value for the dollar. I think it would be informative for this committee and others to look at what it used to cost for a service prior to the designation of these agencies and what it costs now. I'm not sure who to direct this to.
The Chair: I think to go along with that, though, it would be fair, whatever the agency is, that if there is a difference in outcome, we should know about that as well. In other words, if it took four weeks --
Ms Corke: No, we don't. Under the legislation, the administrative authorities can set their fees independently. We do have a requirement that they tell us what the rationale is for the fee increase, because it has to be cost recovery. They can't make a profit; they're not corporated that way. They do have to consult with their industry sector, because these fees are impacting on the licensee or on the regulated sector. They have to go through that kind of process, and of course the board of directors has to be involved and has to approve it. They have to give us notice. It's more in the area of our wanting to understand and do due diligence on the rationale for the fee increases.
Mr Bisson: I just want to make sure I clearly understand. In other words, if you or the minister felt for whatever reason that the fee being charged by one of these designated agencies was higher than what we think should be charged, we would have no ability to stop that other than changing legislation?
Mr Bisson: Let me go to the next step. Apparently one of the reasons the government went to this in the first place is that there was a feeling it would be a more efficient mechanism of delivery. That was the debate back then. If over time -- I'll just use the TSSA as an example -- the TSSA were to get top-heavy in its administration, spending more money than it should on administration and less money on delivery of services, and the minister felt that agency was going out of whack when it comes to fees being charged, am I correct in understanding that as a government we would not be able to stop it without legislating it?
Mr Dowler: I think the deputy is quite correct that the fees are, in contract and in statute, in the purview of the board of directors or the administrative authority, but the minister of course does have the ultimate ability in the administrative agreement to cancel the relationship.
Mr Dowler: I think what you'd want to look at is the fact that, given that the minister does have that ultimate sanction, any type of discussion the minister wants to have with the delegated authority is given top priority. The minister is the delegated authority's sole customer. There is no other customer.
Mr Bisson: I realize that. But short of cancelling the agreement or changing the legislation, there is no mechanism for government to say, "We aren't going to approve the fee you are about to charge."
Mr Dowler: There would be no mechanism to force them, in law, to change the fee, but I think the point I would make to the member is that force is rarely required. Because the minister is the single client of every administrative authority, they tend to take his inquiries very, very seriously.
Mr Bisson: I guess this is a good segue into the next part. One of the complaints I get, for example, from the ESA is that people in the industry are saying the fees are exorbitant. What you used to pay for an electrical inspector from hydro to go in and do an inspection on a job site as compared to what you pay now are night and day. What ends up happening is that the electrician or contractor passes that on to the consumer, and the consumers and the electricians and their contractors don't seem to be too happy.
Mr Bisson: Yes. My point is this. For example, let's say TSSA -- I'm just using them as an example -- all of a sudden were to go awry. It could happen, it's happened in government before, where you have particular government services by a particular branch or section of the ministry that goes a bit whacko. What mechanism does the minister have other than cancelling the contract? That's sort of where I'm going with this thing.
Ms Corke: Yes. Each administrative authority does have a complaints process that it can go through. The other thing -- let's take the TSSA, for instance -- is that each industry council of the eight sectors has a regular liaison relationship with the TSSA. If the fees are getting out of whack, TSSA will hear from that sector much more vocally than it's going to hear from anybody else. That keeps them in line in terms of the top-heaviness, the efficiency issues.
Mr Bisson: I just go back to the experience we had when the ESA was created. I tell you, there was a whack of complaints from contractors, electricians and consumers in regard to the rates being charged. The argument is that they're charging what fair market value should be for the services being rendered when it comes to --
Mr Bisson: Cost recovery, fair market value. OK, I'll buy your argument: cost recovery. The point is that a lot of people felt it was a steep increase in a very quick period and really felt somewhat disenfranchised from that process. But that's an editorial thing and I don't want you to even comment on that. I'm just trying to establish what the mechanism is. If somebody has a complaint about the fee being charged, if I go and complain to the ESA, what happens? What's the process?
Mr Dowler: For ESA, they do have a complaints process, which is documented and which has been submitted to the ministry. Basically, the complaint is received by front-line staff, it escalates through the corporation and ultimately is adjudicated by, I believe, the chief executive officer or the vice-president responsible. As the deputy mentioned, we also have a consumer advisory committee that looks at trends in complaints and offers a consumer or client perspective on whether they feel the organization is being responsive to the types of complaints it's receiving.
In regard to fees particularly, there is, as I mentioned, a schedule to the administrative agreement with both safety authorities, in fact with all the administrative authorities. It sets out the process the minister has agreed to by which fees will be set. There is a consultation provision in that process.
Mr Dowler: The ESA did follow that process when they went forward with the fee increase that the member is referring to. ESA was a special case. It's our newest and largest administrative authority. It's the smallest successor corporation to Ontario Hydro. They were charging fees based on the old Ontario Hydro fee book, which, as we heard from electrical contractors, was both very complicated -- it was about the size of a dictionary. There were many fees charged for various parts of a work order, which electricians found very difficult to administratively cost out.
So the fee structure was simplified, first of all, but the fees were increased in some areas -- only, I would add, after ESA had incurred a year with a substantial financial loss in the annual report it had published.
To your concern, in which you indicated that perhaps an administrative authority might be taking in too much money, there are two controls. First of all, they have to do a fee process as per their administrative agreement, which involves consultation etc. Second, whatever revenue they take in they are accountable for in terms of their audited and available financial statements, which are tabled in the Legislature. Third -- and I suppose this is also a control -- these are non-profit corporations, so there's not a possibility that monies would be taken in and distributed to shareholders. There are no shareholders, so every nickel they bring in --
Mr Bisson: That's not the issue. The philosophical point is, should we be doing a complete cost recovery or should that be part of the cost of running a hydro corporation? That's really the question. Under the old system, part of running a hydro corporation such as Ontario Hydro included inspections and making sure jobs were done according to code. The fee structure was not cost recovery; it was just part of doing business. There's a different approach now. We're doing cost recovery. Philosophically, they are two different positions.
I'm not worried that the ESA is going to take the money and run to Mexico. I'm not for two cents worried about that. It's just that the complaints I get -- because people know where I come from in terms of my background -- is that when this started up, for about a year or two after, there was great difficulty with the fee structure. But that's done and that's not the point of my question.
What I'm really interested in is that when there is a complaint made with regard to the cost of either an ESA or TSSA fee, it's an internal review, which I understand. We've gone through this process. But at the end of the internal review, if the response that comes back is not satisfactory to the complainant, where do you go from there?
Mr Dowler: The complainant always has the ability to complain to the ministry if they're unhappy with the way any delegated authority has resolved their complaint. I do get complaints from time to time from electrical contractors, both because I happen to sit on the Electrical Safety Authority board as our minister's representative, but also I or other members of my staff get complaints just as being part of the ministry. In those circumstances, we review the complaint, we look at the issues, we talk to the delegated authority, we get their side of it, and in some cases changes are made. In other cases --
Mr Bisson: Where I'm trying to go with this is that when the complaints end up coming to the ministry there's a check the ministry is able to do about how well the system is working. Do you guys tabulate that in any way? Do you look at those complaints and then make some kind of determination?
Mr Dowler: It would probably have to go through a freedom-of-information request just to make sure there isn't personal information in the complaints we receive. You know the types of letters that constituents write. Often they do disclose personal information, so we would have to sever that out. But certainly that sort of information would be made public.
Mr Dowler: We have just renegotiated a number of the administrative agreements successfully. We do look at all the types of complaints we receive, we look at issues we receive in the paper, we look at ministers' correspondence, we also look at the experience of members who are the government reps on the boards -- they give us their sense of how things are going generally -- and make amendments accordingly.
Mr Dowler: Yes, there has. I think the deputy referred to the changes that are afoot at the Ontario New Home Warranty Program. Some of the changes have come from the program itself, some very positive changes, with respect to the --
Mr Dowler: Yes, there have been some changes with respect to ESA fees which were responding to complaints raised by the industry. As well, there's been consideration of some newer policy items, again in response to concerns being raised by electrical contractors. One of the issues that has been a historic point of discussion in Ontario is the fact that the Ontario electrical safety code currently requires a permit for every piece of work done in Ontario. Many consumers have come to us and said, "My God, if I'm going to replace a light switch, I would need to go to ESA and take out a permit for that. The switch will cost me $10. The permit will cost me $110, and I'll have to take a day off work to wait for the inspector to come to my house, all for the purpose of checking whether a white wire and a black wire were reconnected the same way they were taken out."
That has come forward as a point of discussion. The ESA has been on the road, as you're probably aware, discussing that both with the trades and with consumer groups. It's come forward in the form of a request for a basic exemption. I believe the province of Alberta has something that says for work which is like-for-like replacement which is below a certain voltage, so it poses a relatively low safety risk, if the work is done by a qualified person, a licensed electrical contractor, in those circumstances, a third-party inspection is not required.
Mr Bisson: I certainly get the complaints from the consumers, because the electricians tell them to call my office. The big complaint is on that kind of work, so it's good to know that maybe there is some hope coming that way.
The other thing in regard to the ESA/TSSA issue -- well, more on the ESA side -- is on the apprenticeship side. If I understood the report correctly, consumer and corporate relations tracks the number of apprentices in the trade?
Mr Dowler: No, we're not the licensing body. Again, that's the Ministry of Training, Colleges and Universities and the municipality. I believe that's the point the auditor's report is speaking to, that currently the system for regulating electrical safety is divided. ESA has responsibility for issuing permits and doing inspections on those permits, but ESA, unlike all our other delegated authorities, has no responsibility for checking the qualification of the person who's doing the work. That responsibility currently rests at the level of certification with the Ministry of Training, Colleges and Universities. They look at apprenticeship, certificates of qualification etc. In many municipalities, under the Municipal Act -- you would know, as a contractor, that many municipalities also license the business under the Municipal Act authority of electrical contracting.
So I believe the auditor's report flags a little bit of a concern with the fragmented nature of the regulatory system, that right now it's kind of a patchwork quilt of business licensing. If you want to work on one side of a boundary, you would need one licence, and if you want to go the municipality next door, you need another licence, which may have different standards, and the issue of the certificates of qualification, the apprenticeship side of it, is covered by another body. I think the thought is that perhaps bringing it all together under one roof would --
Mr Bisson: A last question on the delegated administrative authority: Has any kind of, for lack of a better term, net cost-benefit impact study been done in regard to how they do their business? Does the ministry concern itself yearly or every couple of years about how they're performing vis-à-vis their mandates?
Mr Dowler: We certainly look at the performance of the delegated authorities quarterly or even daily, depending on what kind of issues cross our desk through the protocol that the deputy mentioned. We also sit on many of the boards, so we concern ourselves even more frequently, because as directors we're responsible and in fact personally liable for the actions of the corporations. We do get involved on that basis as well.
In terms of a cost-benefit analysis, a real quantitative exercise, no, we have not done that. We did an independent evaluation prior to the auditor's arrival by PSTG Consulting, looking at the eight delegated authorities and their performance over time. And of course, we've now had the benefit of the Provincial Auditor's review as another third-party look at the whole process of delegated --
Mr Bisson: I just want to understand this. They operate under your authority. There's no other way of putting that. How does the ministry make sure that at the end of the day, it's delivering the level of service that we think the public should be getting for the cost we think is fair? Is there an annual exercise? I guess the question is to the auditor, really, not to the ministry. Are you satisfied that that is being looked at?
Mr McCarter: Our concern was that a number of the delegated authorities weren't reporting that information. The Ontario Motor Vehicle Industry Council was doing what we felt was an excellent job, and we just felt that for some of the others, if they were reporting what it was reporting, it would improve the process.
Mr Bisson: So from the auditor's perspective, there really isn't the oversight -- actually, oversight is the wrong word -- checks and balances from the ministry to be able to say, "All right. Its original mandate was to provide this number of services. Are we getting, cost-benefit, a good deal?"
Mr McCarter: It's more that we felt there should be better reporting of outcomes and activities, and I think the ministry has indicated that they're going to do that. We provided an example, saying the Ontario Motor Vehicle Industry Council is doing a very good job and it would be a good template to use for the other ones. I think they're addressing that.
Mr Bisson: In a bit of a different vein, when it comes to the number of regulations now being created, I would guess the TSSA is the largest of those delegated administrative authorities that deal with regulation, right?
Mr Dowler: It's a difficult thing to measure. You can't really measure regulations by the sentence or by the square inch. I think the perception in the regulated industries is that TSSA's regulatory efforts would be more responsive today to the types of incidents we're seeing out there. They have established a risk management department, which didn't exist before. They do root cause analysis of every single incident to try to find out what the driver was that caused the incident. They try to tailor their regulatory response to attack the thing that is giving rise to safety issues, as opposed to simply inspecting against code. They do that as well, but I think they try to be more focused on the root cause than the technical safety division did prior to delegation.
Ms Corke: If I could interject, I'd just like to say that regulations are the department of the ministry. The ministry is completely responsible for regulations. In the last few years, we have completely overhauled the seven or eight statutes that used to govern this sector and streamlined them and modernized them. I don't think you would say that there is more regulation. In fact, it's easier for the sectors to work.
Mr Bisson: I'm just going to get to a specific example in a minute, but before I get to that, my question is more, are we seeing more activity vis-à-vis the need to create regulation by these regulatory authorities? Are they driving the creation? That's the question I'm asking.
Ms Shenstone: Mr Chair, may I just add that the TSSA has been a great proponent of preventive measures, which are not regulatory. In fact, it sees regulatory action, and regulation as only one aspect of public safety. It has done a lot of things on the preventive side -- for instance, educating the public -- for which the public doesn't pay directly, and educating the services and the service providers.
Mr Peter Fonseca (Mississauga East): Actually, this was just brought up while Mr Bisson's question was being answered. The public doesn't pay directly but probably pays indirectly in terms of final cost to the public. Would you say that's correct? You were talking about some of the educational programs. Those are all factored into the costs, are they not?
Ms Shenstone: The costs the TSSA charges are factored into what it charges -- for instance, the elevator companies or the boiler manufacturing companies -- to pay for the review of their licences. They're tiny costs when you factor it out per elevator or per boiler, so the pass-through to the consumer is probably quite minimal indeed when you're talking about $120 or so for a round's worth of inspection, for instance.
Mr Fonseca: In the complaints and inquiries, the total number I'm seeing here is 32,668, but the other number that was thrown out, I'm not sure whether by the deputy minister or by the ADM, was somewhere in the range of 60,000. Is that correct? Can you explain that?
Mr Dowler: There are two reasons I would give you, and I should say that these relate to any number of the issues under the 20 consumer statutes that the ministry itself administers. But there are two reasons.
The first one is that we have had a significant amount of consumer legislative reform in this province, probably more in the last three years than Ontario has ever seen before, so there has been quite a bit of public discussion and exposure to consumer protection issues. There was public consultation on the legislation that was given royal assent just before Christmas of last year. With the bereavement legislation, that issue has also got some public attention. So people, I think probably to the good, have been increasingly aware of the ministry's presence and have been able to take their concerns to the ministry.
The second point I'd make is that these are complaints and inquiries. An inquiry is a telephone call we get, and it may just be a question; you know: "What does my fitness club have to do under the Prepaid Services Act?" It may not actually be a sworn written complaint. Sworn written complaints are much smaller than the overall global number. They tend to be matters that do require significantly more attention.
Mr Fonseca: If we can go back to the proportionality of 2001-02 complaints, we did see that theatres and video retailers were up, at a 95.9 percentage of inspections. Can you give me an indication of what those video retailers would have been around two years or three years prior to that?
Mr Dowler: Approximately the same. As I mentioned, that is a sector where, first of all, the nature of issues we look at are matters that lend themselves to a field inspection. Secondly, as I also mentioned, it's an area, particularly the adult video area, where, for whatever reason, given the nature of the industry, compliance has been an issue. We have seen products sneak into retail stores which have not been approved by the OFRB and which most people in Ontario and in fact the Theatres Act itself would say are illegal.
Mr Fonseca: So some of the points that were brought up, like the new stickering program, really were not the reason for bringing up that percentage, because you're saying it was happening prior to that.
Mr Dowler: I would say that the reason for maintaining that percentage related to the fact that the program was introduced. The program was introduced because we had a history of non-compliance in that sector and we wanted to provide more tangible evidence that the inventory being carried by the licensees, by these stores, was approved by the Ontario Film Review Board. So now today, each product carries a bar-coded, encrypted, three-dimensional, tamper-resistant sticker which is legally required to be applied to each of these boxes. The reason for maintaining theatre inspections at that level was due to a history of non-compliance and due to the new program and the necessity of educating small business people as to their rights and obligations under the new statute.
Mr Dowler: We're moving now much more toward an enforcement regime and less toward -- you know, in the early years of any new program, you don't rush to lay charges. The first instance is to make sure you go to the root cause of the non-compliance, and if the root cause is that the store owner wasn't aware of his or her obligations, you inform them. You issue a warning letter. I would say we're at the point now where the warnings are pretty much over, and where we see non-compliance, that is, where we see product that the board hasn't approved, which may involve violence and people being harmed and engaging in this type of activity, we will move directly to a seizure or a charge or, in cases of high levels of recidivism, where the licensee is not showing any inclination of moving toward compliance, the statutory directory would move toward a proposal for revocation of their licence.
Mr Dowler: We've always had an escalating scale of compliance. We don't rush to lay a charge. Obviously, the first response is a warning; strike one, if you will. If upon reinspection we find that the situation persists, then the level of enforcement is notched up accordingly. We're at the stage now where the program is no longer new. It has been in the marketplace for a sufficient length of time that each licensee should know their obligations. As a result, I think we're past the warning stage. If we find that we can get by with fewer inspections, we will probably move toward investigation and enforcement for those few bad apples more quickly. So you will expect to see, as you see today, a smaller number of inspections and probably more registrar's actions: more suspensions, more revocations, that sort of thing.
Mrs Sandals: I think this is actually carrying on from there. I'm looking at the table on page 103, which seems to be a summary of the ministry's activity from 2000, 2001, 2002. I noticed that when you moved from 2001 to 2002, the number of inspections seems to have gone down fairly dramatically. I hear what you say about moving perhaps more toward investigations, but the number of investigations over that period in fact seems to be dropping off as well. The number of charges laid is up and down a bit, but the number of convictions seems to have fallen off quite dramatically. Again, I understand that you lay charges one year and they don't show up as court cases till the following year, but just taking that -- and the money returned to consumers also seems to have dropped down quite dramatically.
On the face of it is a table that seems to show a decrease in activity in all sorts of areas. What would the explanation be for that? I think what we're hearing from you is an intent to beef things up and make it more effective, yet the numbers seem to show a trend in the other direction.
Mr Dowler: It's a reasonable question. I think what we're seeing in terms of money returned to consumers and convictions is really a function of what the courts are awarding based on the cases that we're bringing. The courts generally sentence in accordance with the fact situation that's presented before them. So let's say in an auto repair complaint that we're working on under the Motor Vehicle Repair Act, if it's a person's first-time offence -- so they have no history of repeat offences -- and if it's a single count that we're bringing forward -- they've only had issues with one consumer and not 150 consumers -- then the amount of fine, penalty or restitution that the court would consider or that might be considered on a plea bargain would be lower than would be the case if we were working consumer complaints that involved complaints against 150 consumers. So it really depends on the nature of the cases that we're bringing to court. That's what determines the nature of the sentences that result.
We did recognize that in 2002, in terms of what was coming out of our investigations, the numbers did dip a little bit. We took a look at them and we found that the cases we were bringing to court were ones that rated highly on our case-ranking system. So we felt that our staff were making the appropriate judgment calls in working these cases. But it just worked out that the cases were of a characteristic that resulted in the court awarding less in fines and restitution than was the case in the year prior.
Now again, as I mentioned earlier in the day, these numbers do move around a fair bit, and for the 2003 year, I can tell you that the numbers have come back up again quite considerably. I don't know that I would conclude from that that staff are being necessarily more hardnosed or necessarily more effective. It's just a function of what consumers are bringing to us in the form of complaints. If consumers are bringing to us complaints with very significant amounts of damage, then the judges and the justices that we deal with will award significant sentences, and that will cause our numbers to go up.
Mr Dowler: The other comment I would make is that every investigation is different. Our unit of measurement in respect of performance management is an investigation. I can't look at my 12 investigators and say, "You've each got an expectation that you'll do 75 investigations this year." Some investigations take three days; some investigations take 90 days. It depends on the nature of the witnesses, the number of witnesses, the distance between witnesses, whether there's physical evidence that has to be gathered, whether witnesses have difficulty in actually presenting their information -- they may be frail, elderly, have work commitments and that sort of thing. It can dramatically affect the nature of a case. So it's very hard for me as a manager to say, "I expect everybody to bring me 75 investigations and, if they don't, we're going to have a performance conversation." When I actually do the case reviews with the director and with the managers, I find that every case is its own story and you really have to look at it on that basis. It's very difficult to count these things as if they were units of performance.
Mrs Sandals: Given that there's legitimately a lot of variability in the sorts of things you're doing, when we look at the chart on page 99 and the majority of the complaints and inquiries that you're receiving are captured under "other" -- usually when you look at a chart at something like this, you see a lot of major categories and then you see a few things captured under "other." Here, the vast bulk of your work is captured under "other." Could you tell us a little bit about what is under "other" and what specific areas of concern are showing up in terms of trends under that "other," which is obviously a huge area that we haven't talked about at all?
Mr Dowler: Fundamentally, the Business Practices Act is probably our busiest statute. As I mentioned, we administer some 20 consumer protection statutes. The Business Practices Act is a law of general application and it sets out certain obligations on anybody who's selling directly to consumers. It talks about unfair business practices, things like misrepresentation, high-pressure sales and unconscionable transactions, and it prohibits those.
That's probably our busiest statute, and that could affect anything from the sale of merchandise -- fax machines and that sort of thing. Let's say a consumer bought a fax machine and it didn't work the way they expected it to, so they have a concern under the Business Practices Act. Or it could affect any number of other things.
I would say, in terms of our top 10 list right now, we would also deal with some other statute-specific areas. Motor vehicle repairs is always a big one. We have the Motor Vehicle Repair Act, which requires that consumers be given a chance to offer consent before certain repairs are done and requires that prices be within a certain proportion of the estimate. So we get a certain amount of traffic under the Motor Vehicle Repair Act.
Credit repair is a big one. People who sign up for credit repair services -- you've seen the ads: "We clean bad credit," is the product claim that's made. We have, as a result of the number of complaints received in this area, gone forward with statutory provisions which prohibit the taking of an advanced fee before credit repair services are granted. We found that many of these companies were offering to clean bad credit and then taking the money and not offering anything in return. So that's now an area that is prohibited in statute.
Health clubs, under the Prepaid Services Act, talent and modelling, fitness clubs: The contractual obligations that consumers get into with these operations are an area of concern. Home renovations, particularly at this time of year as we're heading into -- I think we're heading into -- spring. The renovation season starts and roofing complaints -- senior citizens who feel that they've been the subject of misrepresentation or high-pressure sales by, in some cases, door-to-door roof or renovation sellers. Vacuum cleaner salespersons is another big area that has been an historic problem for us that we look at.
Mrs Sandals: One other question: On page 104, the auditor has talked about complaints about complaint-handling, or at least a survey that was done where the staff who were taking the calls were also conducting the survey, which struck me as a little bit of an unusual practice. Having been somebody in a past life who was subject to class surveys of, "Did they like your teaching," it was certainly a practice that I had to be out of there and couldn't even be in the room while the survey was being conducted and I never saw the paper until the tabulated results came back. So it was certainly, "Hands off; no intimidation; get out." All you get are the results.
Have you looked at all at changing that practice around how you actually survey people who have made complaints, to see what their level of satisfaction is? Because clearly this is one that isn't going to work terribly effectively.
Mr Dowler: Yes, we agree with the auditor's suggestion that our methodology for surveying customer satisfaction could be improved by having an objective third party collect the customer satisfaction data. The reason that we have done the surveys the way we have done them is that it's quite inexpensive and, as a result, we can get very timely, frequent information if, at the end of receiving and working a complaint file, the service bureau officer can simply ask three questions: Was the service timely; please rate your satisfaction; and was it polite? Please rate your satisfaction and rate your level of consumer satisfaction on a five-point scale. It can be done very cheaply and inexpensively, and as a result, we get tracking data on a weekly basis. We couldn't afford to do a survey on a weekly basis. It would just be cost-prohibitive.
The auditor makes a good point. There is the possibility of bias, because the person administering the service is also the collector of the data. So as a result, we have hired Compass Research, which is an independent survey firm, to come in and look at not just MSSB but all of the ministries' call centres, and to conduct an independent survey of customer satisfaction.
The results for the ministry as a whole seem to validate the results that are coming through our staff tracking survey. As the auditor mentions, our data indicate about a 90% client satisfaction rating, which is very, very high for a government organization. In fact, it's very, very high for a private sector organization. So we're delighted with that number.
The Compass survey, which looked at all of the ministries' call centres, found that about 92% of respondents rated the ministries' service very highly. So we think that survey instrument can be improved in years going forward to get better data specific to the MSSB, but we accept the recommendation and we think that it is important for us to validate with a third party the tracking survey that we get from our staff.
Mr Dowler: We think we can make it better next year, but we've moved quickly and done the Compass survey this year, which is independent validation. It appears to indicate that the information collected by staff is valid, but we think we can improve the methodology even further next year.
Mr Garfield Dunlop (Simcoe North): It's a pleasure to be here. Again, I'm subbing for someone this afternoon so I don't have a lot of preparation time on this particular subject, but I do have a construction background. I have a lot of friends and people whom I know in the construction industry.
I can tell you, on the Ontario New Home Warranty Program, I have to agree with the customer satisfaction portion of it that you had mentioned. I think in my time as an MPP, I've had about three or four phone calls from dissatisfied customers who couldn't get along with Ontario New Home Warranty or their builder, and each time that I asked the question or brought the complaint forward, it was responded to immediately, and the homeowner went away very happy because they responded quickly with either another builder or the previous builder had gone back and actually made the corrections.
The only complaint I hear is from the builders, and that is the amount of money they pay into the system. I'm wondering if you can tell me: How much money is actually in that account that the builders pay into, and how is it invested? Is that something that I can ask here today? Is that a fair question?
Mr Dowler: Yes, you can certainly ask that. I don't have the number at my fingertips, unfortunately. I can give you an educated guess, but I think it'd be more helpful if we just provided the committee with the annual report for the new home warranty program for the last fiscal year. It is tabled before the Legislature and it is audited by an external auditor. So I think that's probably the best way to respond to your question: just give you the annual report and you can take a look at it.
Mr Dowler: Yes, it is. It's in a reserve account and the reserve is managed in accordance with generally accepted principles for the insurance industry. It's not a statutory requirement that they follow the reserving requirements that are set aside for the insurance industry, but because of some past issues that the board has had to deal with, they have gone toward a DCAT type of analysis, which is a method of looking at current activity and deciding how much future resourcing has to be set aside to cover expected claims in the future.
Mr Dunlop: Is it possible that you have enough money in the account that you could reduce the cost of the Ontario New Home Warranty Program? Because the builders are telling me they're wondering what's happening to their money. They have 50 houses or 60 houses they build and they're not getting any callbacks or very few callbacks. What's happening to that money? That's what their concern is. I just wanted to ask the question to see if it's a legitimate concern or in fact --
Mr Dowler: It's a good question to ask. The committee has had some other questions this afternoon about fees in general. The warranty program has reduced its fees once in the last three years, if memory serves, and they are right now extremely busy looking at ways to improve some of the consumer protection side of the business. I mentioned earlier that they'd just brought in a new home owner information package. They've doubled deposit protection. They've gotten new mandatory time frames for delivering on claims. It is a period, during the warranty programs time, when they really are reinventing themselves. Is this a time when you would want to reduce your revenues significantly? Probably not, but the program is changing fairly considerably right now and they probably want to get a little bit of a track record with the new provisions before they go ahead and look at that revenue account. It's certainly something the program has looked at in the past and has reduced its fees, and they could look at it again in the future.
Mr Dunlop: I'm talking about Simcoe county builders. They're probably some of the best builders in the province. I want to pass that on to you as well. I don't know if they're the same across the province or not.
The Chair: When you say there was a reduction in fees, I think it's fair to say it was a significant reduction too. I think it was from about $750 to about $550 per home, something in that range. I'm seeing some nods behind, so my memory serves me correctly. The reduction to the new homeowner, because this is a cost that would be passed on, would be significant.
The other part is that this is a really large program. As I remember the number, it was something like $15 million a year to run it. It's a significant self-insurance program. I think the claims were running at $40 million or something like that, in terms of going back for the various different periods of time.
The other thing the home warranty plan does, and did when I first came into government in 1995-96 as minister -- we had a serious problem with vents on some gas furnaces. This was about an $8-million to $10-million problem. I went to ONHWP and said, "This is a real problem." It was a manufacturer's problem. In essence, it probably would have been a federal jurisdiction area, where the feds should have looked at this particular product and not guaranteed it and all the rest of it. Because it was such a deadly result if there had been a fault in this particular vent -- carbon monoxide getting into the home, which of course you can't smell or know is there -- they stepped into the breach. They took a $6-million to $8-million gamble and eventually won. They went after the manufacturer and recouped it. It didn't cost the government anything, but they did step up to the plate.
As a former minister being put on the spot of stepping in and trying to protect a number of consumers across Ontario who had innocently bought homes that had these faulty vents from their furnaces, I always have a lot of time for this organization. They were willing to step into this breach when there wasn't really any other way to handle it. It's a big organization. A lot of other jurisdictions don't have this. So for $550, I think it's a pretty good insurance policy for most of our new homeowners.
Mr Dowler: It's always a question of wanting to make sure the people you have spend their time where it can do the most good. I think the reason for that particular decision was to try to focus on cemeteries that posed the biggest risk to consumers. The thought was that cemeteries that bury fewer than 10 people per year really weren't as high on the risk radar as a Mount Pleasant Cemetery or something larger and more active and holding more monies in trust. It was related to resources to some extent, I guess, but it's also probably more fundamentally related to wanting to put first things first and really focusing our effort where it can do the most good for consumers.
Mr Mauro: It was mentioned earlier when I asked a question that about $1 million is taken back from the DAAs into the ministry for oversight. Was it originally anticipated it was going to be about $2 million when this delegation took place?
Mr Dowler: It was about $2 million in the early days of delegation. There was a go-forward provision that was negotiated as part of the first administrative agreements that said, "We will keep a docket in the policy, legal services and other areas in the ministry. We will measure the time we spend on your account." For places like TSSA, which had a fairly ambitious legislative undertaking, we docketed quite a bit of time to them.
But the provision said, "If it's found that we're not spending as much time working on your account, then we will reduce our fee accordingly." What has happened over time -- for example, with TSSA it was found that they were paying us a little bit more than we were expending in terms of legislative time, legal time, legal services time etc, and as a result, on a go-forward basis their oversight fee has been reduced to account for that. So we're basically working on a cost-plus basis, and we've made adjustments based on the amount of time they're consuming.
Mr Dowler: Probably. We don't really keep accounts that way. We basically work through the estimates process to get our appropriation for the purposes of spending, and on the revenue side, that goes into the consolidated revenue fund.
Certainly, with the four staff who worked directly with Ms Shenstone initially in her branch -- I think there are actually six staff today -- together with the legal services staff who would support them when legislative or regulatory work is being done, together with the legislative time that goes into supporting the delegated authorities, I would say that, altogether, would probably amount to as much or more revenue than the DAAs contribute.
Mr Mauro: Somewhere in the information we got back, we were told that in one of those years only about $388,000 went back into oversight. I still go back to my original question about, if that did occur, and if you have a shortage of staff resources, this might be one of the common themes we're seeing here in terms of inability to conduct a number of investigations and inquiries and follow-ups on complaints that the auditor seems to think is required.
Ms Corke: The $380,000 you're talking about is the amount of money for salaries and wages for the dedicated staff in the sector liaison branch. In actual fact, there is other money that goes to pay cost recovery for the policy and legal staff we use in the statutory reviews and legal work, and also in some of the executive overhead.
Just to answer a previous question, in the early years we did charge more in oversight fees than we took in to the ministry, than we were allocated in the ministry. In those early years, before we moved to cost recovery, we did in fact take in more from the administrative authorities than we spent, and it did go into general revenue.
The Chair: I can say that this was a quirk I put into it. The ministry really never had thought about collecting the oversight. But my concern was that the ministry always have oversight, and if we didn't put aside a revenue source like we get from the various agencies, then there would never be this play in the questions you just asked, that there is in fact a significant amount of money there for oversight of these administration agencies.
Mr Sergio: If there is one area I get a number of complaints about, it's that -- and I'd like you to dwell a little bit on it, explain a bit more about the relationship between the agency itself and complaints, the number of complaints that have been looked after and satisfied and those that have just given up, for whatever reason. Either they were too small or too long or they just gave up. What is the relationship between the ministry, the department and the agency, and how do we get those two to satisfy a high percentage of those complaints?
Mr Dowler: It's a difficult thing to measure when consumers just give up. I think our hope would be that the process would never be such that a consumer who is making a legitimate warranty claim would ever feel compelled, because of the nature of the process, to just give up.
Mr Dowler: We have heard some concerns from consumers. In response to that, the ministry has taken some action, but more to the point, the new home warranty program has taken some action. Probably the best example is the mandatory time frames that they've put in place. In the former process, to give the program credit, they always wanted to allow the builder and the consumer an opportunity to try to try to work it out. Consumers, though, on many occasions came to us and said: "This process seems to go on forever. At some point it would be helpful to everybody if the warranty program would just step in and say, `Time's up. It's going to go to conciliation,' and the warranty program would make a decision as to whether it's covered or not, and the decision is binding."
That, in effect, is what the warranty program has now put in place. There is now a set of legally binding time frames where the builder is given a reasonable opportunity to respond to the consumer, where the consumer is given an opportunity to go back and forth with the builder -- if it's about a missing countertop, or perhaps just a workmanship issue where the consumer's view is that the workmanship could be better -- and there is a discussion that takes place. But at the end of a set time period, the warranty program does step in and they make a conciliation decision and that decision is then appealable to the licence appeals tribunal. With the introduction of mandatory, legally binding time frames, hopefully consumers will now find themselves in a much more certain process where no one will have to just give up out of frustration.
Mr Sergio: The Chairman was saying that there seemed to be a lot of money. They don't know where the money goes or what they do with it. Who supervises these two agencies? Were they self-supervised? Who are they accountable to?
Mr Dowler: The new home warranty program is a non-profit corporation under the statue which is responsible to a board of directors. The board of directors' composition is set out in a bylaw. The bylaw requires that there be a provincial government representative, a municipal government representative, a representative from the financial services sector, one consumer rep -- although their practice has always been to appoint two consumer reps -- and the balance would come from the registered building community. The board of directors is responsible for managing the corporation. It is subject to an annual external audit. The annual report, which would include the audited financial statements, is then tabled before the Legislature. That also is a statutory requirement.
Mr Sergio: I have one more little question, Mr Chairman, on the digging for gas lines and stuff like that. I wasn't sure from your answers before whether a licence is required and it's up to whoever is doing the work, the builder or whatever, to get a licence, to get a permit, from the local municipality?
Mr Dowler: In regard to the electrical side, many municipalities choose to license electrical contracting firms. It's a voluntary program. Some municipalities do, some municipalities don't. They do it under the bylaw provisions of the Municipal Act. In addition, the province, through the Ministry of Training, Colleges and Universities, does require a certificate of qualification for all electricians in the province. It's a compulsory trade. So you have to go through an apprenticeship and, at the end of the apprenticeship, you can become a journeyperson and get your certificate of qualification.
ESA, the Electrical Safety Authority, is our only delegated authority that is only responsible for construction and installation. It's not responsible for looking at the credentials and qualifications of the personnel working in the field. That's something the auditor took the time to recognize in his report, and he made a suggestion that perhaps by bringing those regulatory functions together, you might have a more effective regulatory system. That is something the Electrical Safety Authority and ourselves have been consulting with the industry on, and I think we have the support of the two large trade associations and the union.
Mr Bisson: That's fine. This happened to me the other day. I was meeting with a gentleman who operates a trailer park; you know, camping. You've got a camper and you go park at his trailer park and you go there with your family and do whatever. He was telling me that apparently a new regulation for water slides has come into effect. A water slide is basically a slide with water going down -- nothing too complicated. The issue is that according to this regulation, you have to have a particular certification to operate the water slide, which is somewhat onerous for an operator like that who basically has a water slide at a lake for kids and adults, who go down with lifeguards. I'm just wondering under what process that particular regulation was developed.
I'll give you the regulation number, if that's helpful. I've just got to find it in my notes. That's the wonderful thing about taking notes; it's somewhere in my book. I'll let you start answering as I look for the regulation number.
Mr Dowler: We can always take a look at the specific nature of the complaint. Basically, TSSA has put in place, under its responsibility for regulating amusement devices, new provisions that do affect water slides. They have seen some incidents in this area and their thought is to always try to make sure they are responding with appropriate safety standards to protect people from being injured. They have also put in place -- and this may be what you are referring to -- a mandatory training program for all amusement device operators. That's relating to some root cause analysis they did which indicated that if the operator, the person loading kids on to the ride, had had a better understanding of how to operate the ride safely, certain incidents could have been avoided.
But if there are issues coming forward from constituents -- and this is always an open offer -- where perhaps the business community is suggesting that certain regulations are excessive or not applicable to a certain sector or that perhaps the scope of the regulation could be more appropriately be directed to larger installations or different installations, that type of feedback is useful for us and the TSSA.
Mr Bisson: I'm interested in two parts of this. By the way, the regulation number is 187/03, so it was done last year. I'm wondering how we develop a rationale for regulation. I think all of us will agree that there is really good cause for regulation in some of those areas. We want a person operating some sort of amusement ride that has a certain element of risk to operate it in a way that it's inspected, so we know it's safe and the people operating it are doing so in a safe manner. But sometimes we tend to go a little bit further with those regulations than was originally intended. I just wonder what process we are now using to develop regulations.
That's not to say, Chair, that we did a better job developing regulations when it was with the ministry, which it still is. But you probably have the same view as I do. I get somewhat frustrated sometimes. With good intentions, we develop a regulation to prevent an injury based on a coroner's inquest -- and we all understand why we do these things -- but we go a bit overboard. I'm just wondering, with this particular regulation, how we came to the rationale. How was that developed?
Ms Shenstone: The TSSA comes forward to us with recommendations for regulation changes. It uses a consultative process with its advisory committees. It has an advisory committee for each one of its sectors, so it has one for amusement devices. In addition to its general advisory committee, it also has a technical committee composed of people in its industry who will present issues they're facing in the industry. The TSSA also uses its risk assessment model. This is why the statistics it collects and reports on and its preventive measures are so important: that it watches what's happening out there. That's the process it uses when it comes forward to government with recommendations for changes.
Mr Bisson: Based on incidents out there, they'll basically come with some sort of recommendation for regulation, but you guys will draft it up in the end. You do the actual drafting, not them, if I understand.
Let me just get to this particular case. On this particular regulation 187/03, this operator is an elderly gentleman who's been operating his business for some years. He's about to retire in a year or two. He's at the point where he's going to have to shut down that slide because he can't meet the requirements of the regulation, for two reasons. One is that he can't read and write, so he has no capacity to do it. So I ask the first question: Isn't there any ability to test people who are not literate? I think we need to think about that. That's my first question on that particular regulation: Is there some mechanism to test somebody who is not literate, some sort of oral exam or something we can do? There is still a large section of our population, quite frankly, unbeknownst to many people, who don't have the literacy skills to do these things.
The bigger thing is that I sat there and listened to his story and read the documentation he provided me. It was clear to me, as I was reading the document, that in fact there probably is good need for regulation within that particular industry, but I fail to see where the regulation on a water slide -- it's a slide with a pump with water. There's a pretty onerous thing the operator has to go through, and I'm just wondering if there's any flexibility in all of that.
The last point: In fairness, I did call the TSSA. I just met with this guy February 10, which would have been Thursday or Friday. I put a couple of calls into the TSSA and they actually did call me back; unfortunately, we have been playing phone tag. I'm not sure if it was you, because I called the director. No? OK. I normally call the director. In fairness to the TSSA, they did respond. Unfortunately, I have not had a chance since they called back on Friday to get back to them. Today is my chance. Two birds with one stone.
Ms Shenstone: We can ask the TSSA about testing people when they are not literate and we can follow up on that on your behalf. In terms of looking at regulations and whether they are onerous or not, it is an analysis we all do when a regulation comes forward. But the TSSA would also be wanting to make sure a water slide, for instance, is designed properly, that the curvature of the slide part, given the speed, given the weight of people going down it --
Ms Shenstone: They would also be looking at how many people -- you don't want two people going side by side bonking their heads together as they go whipping around a corner. The TSSA would be looking at the design and how it's maintained; it's how it's installed.
Mr Bisson: On this specific case, I'll actually talk to the person from the TSSA away from this committee. It's a better use of time. But from the political perspective and the process perspective, it just seems to me -- this is probably more directed toward regs and private bills. It's just a very quick comment. Regs and private bills has never done as good a job as it should, in my view, as a legislative committee of actually looking at these types of regulations. We need a much better mechanism to make sure, when we do regulations, that they do stand up to some sort of common sense. Pardon the term, Norm; I had to steal that from your vocabulary of a long time ago. Anyway, I just raise that. OK. You've answered the question I had on that.
Just moving away from the TSSA for a second -- no, I just remembered. I have some people from the Hearst area who are actually livid over the lack of French-language services for the TSSA. You probably know some of the complaints I'm talking about. What kind of steps does the ministry take to make sure that all of these delegated administrative authorities actually offer services in French? I've got Collège Boréal, which is a francophone college in northern Ontario, which is beside itself when it comes to some of the testing because it can only be done in English.
Mme Shenstone: Les « delegated administrative authorities » ne sont pas assujetties à la Loi sur les services en français. Par contre, nous les obligeons à nous expliquer qu'ils ont un plan de prestation de services en français. Par rapport au testing en général, la TSSA pourrait négocier ou discuter avec la personne en question comment répondre aux besoins de cette personne dans des cas spécifiques.
Mr Bisson: Just for the committee, I don't know if the other committee members have gotten the same complaint, but I've certainly -- please step up. As you're walking forward, I'll just put the question forward. There are a couple of issues.
Collège Boréal is the francophone college in my area. I don't know if Cité des Jeunes has the same problem at the other end. Often, when it comes to certifying particular people in, I wouldn't say trades, but in some of the licences that are necessary under TSSA, they've complained a number of times about the inability to test in French. Mind you, we've written a number of letters about this and we've complained about it, and I haven't heard anything in the last year or so. I'm wondering, have you guys addressed that?
Ms Margaret Kelch: Just for record purposes, my name is Margaret Kelch, president and CEO of TSSA. Thank you, Mr Bisson, for the question. On two fronts: I'm not a bilingually engaged individual, but I think what Mary said is that the administrative authorities are not legally bound by the French-language services legislation of the province. What we have done at TSSA, however, is to ensure that wherever French-language services are required by our clients, we are in fact providing them. I'm very aware --
Ms Kelch: Yes -- that we've had some issues at the college to which you refer. We also found that there weren't in fact materials available in the French language because many of these tests are international and English-based. The challenge we have is that the individuals who actually carry out that responsibility in the province are going to have to do it in English.
Ms Kelch: What we have done is to ensure that for testing purposes, to the extent that we are able, we provide those tests with an interpreter present and ensure that that is in fact amenable to the client who requires the French-language service.
Mr Bisson: That's where I was going, because that's what we recommended when they said to us that all the learning materials and all that are in English. Some people, because they go to college in Ontario -- we do have French colleges -- do all of their training in French and are not comfortable in the English language. Initially it was kind of an odd situation. You can come as an Italian Canadian and ask for an Italian translator to do the English exam, but you couldn't ask for a French translator to do the English exam from Ontario. I take it we've resolved that.
Ms Kelch: We addressed that issue directly. Our larger issue, though, and it has been referred to several times today, is that our responsibility is to ensure that public safety is protected. We need to ensure that that individual in fact can carry out their responsibilities in the English language in terms of understanding the code. The updates are done in English, the rules are in English, so we need to assure ourselves that the individual can actually carry out their responsibilities.
Mr Bisson: I'd be very careful about that, because I'm not too sure how that squares up against the charter. You have the same situation in Quebec, where an English-speaking electrician, if we brought that to the fullness of the logic, couldn't operate in the province of Quebec because people wouldn't understand what the hell you had done. The reality is that if I learn how to be an electrician in Portuguese, English or French, I'm just as capable an electrician. The issue then becomes, am I able to interpret the code book, which is a whole other issue. I just caution you not to go any further, because I have a very different view of this, and we're not going to be combative at this committee.
The Chair: Yes. Well, we're not done with them, because they're going to respond to us. We can ask them questions in writing. Our first consideration of the material they forward to us will be after March 22, when the House reconvenes.
I'm going to make a very quick question. Are you responsible for lottery rules and all that kind of stuff or does that still stay with the lottery corporation? I remembered that inside the auditor's report there was some comment on gaming.
The Chair: Thank you very much. For Mr Bisson and other members who haven't been on the committee before, it's the practice of the committee to stay a few minutes after the delegation leaves, and we try to give the researcher some indication of the directions we might want them to go in the report.
I'd like to thank you, Deputy, and others for your attendance here today. If you have any additional information to pass to us, then I invite you to write me. I will share that with the committee and it will become part of our deliberations when writing the report.
Ministry of Consumer and Business Services P-109
Ms Sue Corke, acting deputy minister
Mr Rob Dowler, acting assistant deputy minister, policy and consumer protection
Ms Mary Shenstone, director, sector liaison branch