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Terence Kernaghan

  • MPP
  • Member of Provincial Parliament
  • London North Centre
  • New Democratic Party of Ontario
  • Ontario
  • Unit 105 400 York St. London, ON N6B 3N2 TKernaghan-CO@ndp.on.ca
  • tel: 519-432-7339
  • fax: 519-432-0613
  • TKernaghan-QP@ndp.on.ca

  • Government Page
  • Apr/25/23 9:50:00 a.m.
  • Re: Bill 69 

I’d like to thank the member from Renfrew–Nipissing–Pembroke for his presentation.

That government has claimed that schedule 2 of Bill 69 is a response to the Auditor General’s 2017 report. That report criticized Infrastructure Ontario’s uncompetitive procurement and their poor oversight. Infrastructure Ontario pays big P3 companies that are unsuccessful in their bids on P3 projects up to $2 million per bid. That’s for unsuccessful bids—what a consolation prize.

My question to the member: Does the member think it’s okay for Conservatives to continue the party with the public purse?

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  • Mar/2/23 3:30:00 p.m.
  • Re: Bill 69 

I’d like to thank the member from Mississauga–Malton for his presentation. I think it’s important that we recognize that trust is not something that is freely given; it is something that is earned, and it’s earned based on reputation and based on past behaviour. Frequently with this government, we see many pieces of legislation that are very concerning. We see a government that is very interested in backroom deals and escape hatches. There are many workarounds that this government has created with legislation, such as Bill 124 to trample on the rights of health care workers, as well as Bill 28, the bill that was until it wasn’t, with the “notwithstanding” clause. Also, MZOs are yet another example of this.

Does the member think that environmental protections are worth protecting? Why are you creating an escape hatch to override environmental protections?

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  • Mar/2/23 2:40:00 p.m.
  • Re: Bill 69 

I’d like to thank the members for their comments about Bill 69.

I want to return to the Auditor General’s report, where it was pointed out how Infrastructure Ontario management was deemed ineffective—that there were no standards of performance, no timelines, and even that there were invoices that were non-specific to the location as well as the services that were provided.

Is it good business to continually reward organizations that do not have performance standards, that do not have timelines, and that are unspecific on invoices?

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  • Mar/2/23 2:10:00 p.m.
  • Re: Bill 69 

I thank the member from Oakville for his comments. I listened intently.

We had the opportunity to travel on the Standing Committee on Finance and Economic Affairs, and we heard from many folks and organizations across the province who underscored the importance of housing as a social determinant of health.

Here on the opposition side, we believe in stretching a dollar as far as it goes. We believe in upstream investments, such as the province creating affordable housing, making sure that there’s robust primary care infrastructure, making sure that we have nurse practitioners and family health teams.

My question is specifically about business. I would say that it is bad business—is it not?—to reward somebody who does not deserve it, somebody who has not earned it, somebody whose track record actually means that they are not doing the correct job. When we look at the example of Infrastructure Ontario, we have heard, in the Auditor General’s report, about how ineffective they are. My question is, why is the government cherry-picking only the things that they like out of the Auditor General’s report and not responding to all the things that need to be done?

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  • Mar/2/23 1:40:00 p.m.
  • Re: Bill 69 

I would like to thank the member from Ottawa West–Nepean for her excellent presentation showing how Bill 69 is actually creating a loophole that undermines or even negates the Environmental Bill of Rights.

It seems that this government is a government of backroom deals and escape hatches when you look at Bill 28—the bill that never was but never was—the “notwithstanding” clause, MZOs, Bill 124, and now Bill 69.

You talked about the Auditor General’s 2017 report, and you pointed out how Infrastructure Ontario management was ineffective, with no standards of performance, and that there were no timelines. It has even been pointed out that invoices were non-specific and did not have proper addresses on them—so it wasn’t necessarily as though these invoices were even related to the properties that were being managed.

My question: Is it fiscally prudent or socially responsible to give further contracts to Infrastructure Ontario?

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  • Mar/1/23 5:30:00 p.m.
  • Re: Bill 69 

I’d like to thank the member from Niagara Falls for his excellent question. No, I don’t think that anyone in Ontario at this point trusts the government on the way in which they’ve handled the greenbelt. They’ve talked about this swap where they’re actually adding lands that already had some protections on them. They’d like to pretend that they are doing this thing where it’s an equal exchange, but if we look at the greenbelt as a chain, if you weaken any links of that chain, such as a watershed or something else that is contributing to the filtering of our water, then that entire chain is weak.

What they’re doing to the greenbelt is odious. They’re making sure that it’s going to be easier for these developers to make McMansions, which is not what we need more of. We need more inwards and upwards development, we need affordable housing, we need rent control, we need vacancy decontrol, we need protections for tenants—none of the things that this government is doing, because they do not care about tenants.

They, on the side of the official opposition, said that they were going to change things. They agreed with the Auditor General. And now that they’re on the government benches, we see a completely different change in attitude. They’re upholding many of the things that they criticized the Liberals for, including Infrastructure Ontario, including Tarion. Now they’ve even created yet more government bureaucracy with things like HCRA.

But this attack on the greenbelt is absolutely odious. They’re also taking money away from municipalities when they need it the most. The government should be having a public builder building housing, not expecting private, for-profit agencies to—

The government has a responsibility to ensure that everyone has access to clean drinking water. The fact that there are places in this province which do not have access to that basic human right in the 21st century is unconscionable. It’s completely unacceptable.

There are areas close to my riding that have been under boil-water advisories for 25 years. If that were to happen in any large urban centre, it would be corrected immediately. It would get government attention. But we’ve seen governments, past and present, who simply want to kick the can down the road. They want to finger-point for jurisdictional change, and they simply don’t want to do the right thing. They could get clean drinking water there; they just choose not to.

With the Standing Committee on Finance and Economic Affairs, we travelled the province and we heard about the people who are struggling. And yet we see bills like Bill 23, which are just actually—they wrap that bill with the word “housing,” but really what it’s about is McMansions, and it’s about seizing land from the greenbelt.

Instead, what we should make sure is we should have a government that’s actually looking at how Infrastructure Ontario operates. We should have a government that looks at how Tarion operates. When people make the largest purchase of their lives, they deserve to have some—

For many years, we criticized the Liberals for this. But this government is doing it almost on steroids. It is unbelievable what they have achieved with Bill 23, with Bill 7, with so many different things and ways—

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  • Mar/1/23 5:20:00 p.m.
  • Re: Bill 69 

—“that unsuccessfully bid on P3 projects up to $2 million per bid to cover some of their costs.” That is an amazing consolation prize.

So these few companies that bid on these projects can actually receive a cash windfall for simply putting in an application—not even for being successful, for just simply putting in an application. Toby calls it “a cozy fraternity of lucratively paid P3 companies and consultants getting wealthy at the public’s expense.” That is not fiscally prudent. That is not good business.

Back in the day, the Conservatives, as opposition, were quite critical of this sort of spending, yet now that they’ve changed to the other side of the House, they’re quite happy with the status quo. In fact, they have become the status quo.

I’d also like to take a look at some of the Auditor General’s report on real estate services. Now, the Auditor General states—

Interjections.

The Auditor General said that the agreement, the enterprise realty service agreement, between Infrastructure Ontario and the Ministry of Infrastructure—here are the problems: “The agreement does not set out any mandatory, minimum standard of performance for managing the costs of capital projects. It does not set out timelines for meeting.” And it does not make sure that government properties are being “used efficiently.” These are all the buzzwords that we hear from this government all the time, and they’re not doing it. It’s abundantly clear that this is not being upheld. They are not doing their due diligence. They are not participating in what is a good business model.

So if we take a look at the request for proposals, the RFP approach, the Auditor General pointed out that that attracted only a few bids for the management of 7,500 capital projects. These were projects worth about $900 million over five years. There was not a broad range of companies that bid on this. It’s very curious.

She also criticized—it says, “Better oversight of external projects—

Interjection.

She also states, “Better oversight of external project mangers’ procurement methods for capital projects is needed.” She goes on—she believes in competition. She believes that things should be fair. And on the side of the official opposition, that makes sense. She states, “Infrastructure Ontario does not track how many vendors bid on capital projects and which vendors are winning the bids.” They actually don’t track what they are responsible for—wow. Where’s the accountability? Where’s the transparency?

The Auditor General talks about the vendor rotation process, which is supposed to be an electronic bidding service that’s supposed to provide these contracts in a more fair manner. “However”—this is where it’s interesting, Madam Speaker—“since 2013-14, Infrastructure Ontario has allowed its external project managers to select vendors from its ... list and manually add them to the list of bidders.” So they cherry-pick the ones they wanted to get the contracts to make sure they got the contracts.

Speaker, as we look at Bill 69, the Reducing Inefficiencies Act, there is far more that this government needs to do in terms of reducing inefficiencies. On the side of this official opposition, we hear this government with all of their buzzwords, we hear them with all of their rhetoric and their language, but we’d like to see actual action that is reducing inefficiencies. We’d like to see a better business model where there is true transparency, accountability and actual efficiency.

Let’s see the government do this. Let’s not hear them talk about it; let’s see it reflected in legislation. I look forward to the briefing, and I want to thank the Minister of Infrastructure for providing that.

This program showed great promise. It cost about $18,000 per person per year, rather than the cost of a mental health bed. It was great cost savings. It was efficient. It was amazing. And it was also something to be prescribed by a doctor. The device and the program would be prescribed. It was to be added to the Assistive Devices Program. I heard lots from this government about how ADP is 30 years old and it’s for mobility devices and sensory aids and that’s it. They had the opportunity to modernize ADP and they chose not to, so I’m tired of hearing—

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  • Mar/1/23 5:00:00 p.m.
  • Re: Bill 69 

It’s an interesting bill that we have here before us with Bill 69, the Reducing Inefficiencies Act. Unsurprisingly, we see yet more buzzwords being thrown into more legislation. Rather than having an acronym, there’s these business buzzwords.

But to begin my remarks, I wanted to clearly state that trust is something that is not freely given on everything and anything, nor should it be. Trust is something that really needs to be earned. Trust is about dialogue. Trust is about respect. Trust is about accountability and transparency—all the things that are treated like buzzwords but actually have real, valid, tangible meaning.

I listened very intently to the Minister of Infrastructure’s presentation, and we heard many of these buzzwords—we heard about “efficiencies,” “streamlining,” and so many buzzwords, quite frankly, people at home could fill out a bingo sheet and have a heyday each day and every day with this government. But when we take a look at the government’s record on the environment, it’s a dumpster fire. It’s a dumpster fire with toxic waste in it, for heaven’s sake.

This government wants trust. They want us to trust their words. They want us to take them at their word. They want to simply smile and say, “There’s nothing dubious about this.” They have categorically been denying the official opposition the customary briefings that were typically provided as part of the tradition, respectability and honour of this House. I did want to inform the House that earlier, in my questions of the Minister of Infrastructure, I asked why the requests for briefings had gone unanswered thus far, and it’s unsurprising that directly after that question was asked and on the record, publicly available, suddenly that request for a briefing has been honoured. So I do look forward to the briefing that will be available for the official opposition—again, something that was customary and something that happened after each and every bill was introduced, but something now that has to be requested, apparently.

We also hear words like “fiscally prudent and responsible,” “efficiency,” “streamlining”—all these sorts of things—and I would say that this bill does not achieve that in that it does not tackle the real issues that the Auditor General has pointed out.

As I begin my remarks, I’d like to start with schedule 1, the changes to the Environmental Assessment Act. This will allow the minister to waive the 30-day waiting period that is currently required following the end of a class EA comment period before granting an approval to proceed with an undertaking, such as an infrastructure project.

In the Auditor General’s report from December 2022, Operation of the Environmental Bill of Rights—I’d like to read a couple of the recommendations into the record.

Recommendation 2: “To provide Ontarians with a minimum of 30 days to comment on environmentally significant proposals for acts, and to provide prescribed ministries with sufficient time to consider any comments submitted before the proposals are implemented....”

Recommendation 3: “To provide Ontarians with a minimum of 30 days to comment on environmentally significant proposals for acts, and to provide prescribed ministries with sufficient time to consider any comments submitted before the proposals are implemented, as required by the Environmental Bill of Rights, 1993....”

Speaker, this is clearly a bill that is an attempt or a very overt gesture to gut the Environmental Bill of Rights. It’s a workaround. It’s a way to deny the customary comment period. It’s a way to ignore the public. It’s a way to deny consultation.

I did want to also introduce some recent information to this House. We recently passed legislation in this House, and the mayor of Central Elgin was completely caught off guard by the legislation that was passed by this House. The title of this article is, “‘Completely Off Guard’: Central Elgin Mayor Shocked by Province Annexing 700 Acres.” Mayor Sloan said, “I think a little more than surprised”—when he responded to Bill 63. “Of the 1,500 acres, 75% of that lies in Central Elgin. The concern that Central Elgin has, is that some of that was marked for development land for economic development for Central Elgin. Now we’ve lost that revenue.”

Clearly, the government did not consult with Central Elgin in the implementation of that legislation. This will be a great economic boon for the area, but it’s something that Central Elgin is clearly losing out upon. The government did not do their due diligence by contacting all interested and affected parties, and we see the exact same sort of operation here with this bill. There’s a claim that this will be more efficient, it will be streamlined, it will be faster, and perhaps that’s true. Obviously, stomping on environmental rights is a way for this government to be faster and be more efficient. They must see that as being somehow more efficient, which is concerning to the official opposition.

I’d also like to quote from a letter that was sent from the Auditor General to the official opposition, to the MPP for University–Rosedale. The Auditor General says, “In your letter, you asked my office to review whether the government has violated the Environmental Bill of Rights....

“Sections 15 and 35 of the EBR require ministers to do everything in their power to give public notice of a proposal at least 30 days before the proposal is implemented, and to take every reasonable step to ensure that all received comments relevant to the proposal are considered when decisions about the proposal are made.”

She goes on to say that she has concerns whether all of the comments related to Bill 23 were meaningfully considered before decisions were made. Obviously, these are huge concerns. This government will claim that these are not concerns. The comment period for Bill 23 was incredibly short. When we look at Bill 69, we wonder if this is yet more of the same.

As I turn to schedule 2, schedule 2 is about the Ministry of Infrastructure Act. It would allow the ministry to assume a lease entered into by the entity with a third-party landlord. So we look at all of the 14 entities that are mentioned in schedule 2 that ostensibly Infrastructure Ontario will start to take the management of and look after the servicing of, but there are so many problems that the Auditor General has already identified with Infrastructure Ontario that have not yet been addressed. So I’d like to take a look at some of the operations of Infrastructure Ontario in my comments today.

In 2014, the Auditor General released a report showing that public-private partnerships, which are administered by Infrastructure Ontario, showed wastefulness and incredible overspending—$8 billion more on projects, allowing these P3 companies to siphon money off of the public purse, to take money away from health care, to take money away from education. She stated back then, “If the public sector could manage projects successfully, on time and on budget, there is taxpayer money to be saved....”

She looked at 74 projects. They included several hospitals, the Eglinton light rail line; they were all built with these P3 models, also known as alternative financing and procurement or AFP. These were all administered under Infrastructure Ontario. She found that with these projects, they cost about 14 times what the government does for financing. It’s really become almost an industry that we see here in Ontario, and it’s the largest infrastructure company in all of Canada, because the government is quick to waste public money to make sure it gets into a few private hands. They’re taking everyone’s money, and they’re making sure that only a few people benefit from it.

Also, Infrastructure Ontario’s chief CEO at the time said, “The guys we’re outsourcing this function to, this is their core competency”—but they aren’t showing that they’re competent whatsoever when you consider the cost overruns, the way in which they overstate the risk, and the fact that also, if these projects do come in on time, which is very rare, and if there is more money that they’ve allocated, it comes to them in a windfall profit.

Back when this report was tabled: “Interim Progressive Conservative leader Jim Wilson said the first step is for the Liberals to get rid of their ‘bias’ in favour of private partnerships, and analyze projects more objectively.

“‘They have a bias—which normally we would be accused of as Conservatives—[of] wanting to always use an alternative finance plan,’ he said. ‘They need to get rid of the bias.... You’re basically skewing all your contracts into one stream.’

Now, that goes against Conservative ideology, which is that there ought to be competition, there ought to be people who are doing this for the right price. That’s supposed to drive costs down. But really, what we’re seeing with Infrastructure Ontario is something completely different.

Now, Lysyk also saw that these calculations are very wonky. They assume that if the public is managing projects, it’s going to cost a great deal more and, also, that the government will fail to meet its obligations.

It’s very interesting that it’s this sort of negative attitude that the government has about its own self—the government thinking that it, itself, is going to fail and fall behind in terms of the maintenance and fixing of infrastructure. It’s incredibly odd. But these are assumptions that, apparently, are completely acceptable in Infrastructure Ontario.

Further, when we look at the way in which these P3s operate, they also really benefit a whole host—I would say that there’s an entire industry behind this. They deliver economic benefits to corporate law firms and financiers. They earn enormously high fees arranging complex contracts, lending money to the government at rates higher than what the government normally pays. That’s bad business. The government could borrow money at a much better rate, and yet they choose not to. They’re choosing to fill the pockets of a few people. That’s not fiscally prudent. That’s not fiscally responsible. It is incredibly difficult. Overall, the Auditor General found that Ontarians paid 28% more for these projects than they ought to have. It’s incredibly, incredibly problematic.

If we also look at the way in which these projects are financed, it’s a sneaky way of the government hiding the money that they’re spending, because the borrowing is stretched out over decades and these financing charges will often account for 80% of the extra charges of these massive P3 projects.

They also hide behind these value-for-money assessments. It was actually quite groundbreaking that the Auditor General was able to get as much information, because many of these value-for-money assessments are—basically, they’ve been called “window dressing.” They claim commercial confidentiality. They really don’t want anyone to scrutinize the numbers. That’s why we’re so lucky in Ontario to have the Auditor General, who is able to provide that unbiased scrutiny of government spending.

Back when the Conservative government was in opposition, they loved the Auditor General. Now that they are in government, they suddenly—I don’t know if that relationship is really the most fond one, at this time.

I’d like to quote: “Canada’s largest P3 agency makes decisions on tens of billions of dollars of public spending using assumptions with no basis in fact.”

It’s often been called Stephen Harper’s evidence-free policy-making that we’ve seen when it comes to this blind adherence to this for-profit and P3 model. It doesn’t bear any real fiscal prudence. It doesn’t make any sense.

The large companies behind P3 projects can also walk away at any time. They risk only the equity that they place into a project. Generally speaking, that’s about 10% to 15% of the cost.

Toby Sanger also points out: “Infrastructure Ontario has been paying the big P3 companies”—

Interjections.

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  • Mar/1/23 3:20:00 p.m.
  • Re: Bill 69 

I’d like to thank the Minister of Infrastructure for her presentation this morning. I listened intently. I did have a question. This bill is very young; it’s about a day and a half old. The official opposition has reached out to the government benches. It seems to be this government’s standard practice that bills are dropped without offering any briefing, without offering any of the tools that are really common and traditional in this House.

My question is, Speaker, when will this government be providing the official opposition with a briefing on this bill?

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