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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

I’d like to thank the member from Richmond Hill for her comments. Yesterday, I asked the Minister of Infrastructure about the broken promise that the Conservative government made prior to the 2022 election about the additional $160 million to improve the GO Transit service to London and area at the heart of southwestern Ontario, and I just wanted to reiterate for the member that that broken promise lets down so many rural communities in southwestern Ontario who need a regional transit model, not just the GTA.

I speak with many great farmers in the London area who can’t get workers into the good-paying jobs that are there waiting for them. Some businesses have even resorted to hiring their own bus to get people to work. Areas like Sarnia–Lambton, areas like Perth and many more can’t get the people there and they have to do it on their own because the government has let down rural Ontario.

My question: When will this government stop neglecting rural Ontario and invest in regional transit that meets the needs of southwestern Ontario and meets the needs of Ontario’s wonderful farmers and agri-foods industry?

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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 5:00:00 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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