Table of Contents

Chapter 1: The Need for Strong Fiscal Action

Recommendation 1-1: We recommend the following annual changes in program spending out to 2017–18:

Health care — plus 2.5 per cent;

Education (primary and secondary) — plus 1.0 per cent;

Post-secondary education (excluding training) — plus 1.5 per cent;

Social services — plus 0.5 per cent; and

All other programs — minus 2.4 per cent.

Chapter 3: Our Mandate and Approach

Recommendation 3-1: Do not simply cut costs. The imperative to restrain spending should instead be an opportunity to reform programs and service delivery. Simple cost-cutting can be effective in hitting near-term deficit reduction targets, but it does not encourage longer-run fiscal stability or allow for reforms that will generate more value for money spent.

Recommendation 3-2: Avoid across-the-board cuts. Such a blunt tool treats equally a valuable, efficiently run program and one that is outdated and sloppily managed. This is dumb. Spending should be aligned with government priorities so that high-priority initiatives are adequately funded while lower-priority programs are either cut substantially or eliminated outright. Across-the-board cuts represent an abdication of the government’s responsibility to make real, and often difficult, decisions.

Recommendation 3-3: Avoid setting targets for the size of the civil service; instead, set targets for outputs, not inputs. Focus on the cost of programs and services and on value for money. A smaller and leaner civil service will be an inevitable result of reducing the cost of programs and achieving greater value for money.

Recommendation 3-4: The government should not rely unduly on hiring freezes and attrition to reduce the size of the civil service as a result of any spending restraint. Such approaches typically weaken the quality of the civil service for years — even decades — to come. Lower-priority and less efficient programs and services must be targeted for reduction; the result will be fewer employees working in these areas. More generally, the focus must be on retaining good employees while letting go of those who are not performing well. All employee appraisal and bonus schemes must be aligned to these objectives; for example, the government should continue to offer performance bonuses to those who exceed job requirements.

Recommendation 3-5: Do not hang onto public assets or public service delivery when better options exist. Consider privatizing assets and moving to the private delivery of services wherever feasible. We suggest pursuing this course only where the public can get better value for money spent without compromising access to services, not for ideological reasons. In budget planning, do not count chickens before they are hatched. If assets are to be sold, never incorporate any revenue from such planned sales into a budget before the fact; there is always uncertainty over the timing, accounting treatment and ultimate market value of any sale. Instead, simply record any sale in the appropriate manner if and when it is completed.

Recommendation 3-6: The length of time it will take to return to balance in a sustainable fashion significantly changes the nature of the approach. Traditional “short-term fixes” will not be adequate or even, in many cases, appropriate. Examples include asset sales solely for the purpose of a one-time cash injection; freezes to wages or managers’ bonuses; and deferrals of capital investments and other necessary spending. Kicking the can down the road is no solution. Spending restraint must be thoroughly and consistently tied to permanent reforms in how government operates so the results of the restraint exercise can be sustained over a long period.

Recommendation 3-7: Once it has decided how to respond to this report, the government should begin with a good road map — a formal document of its vision and the path to the goal. There are precedents for such a tool. In 1984, the Mulroney government published its Agenda for Economic Renewal, an extensive paper that laid out in one place all the government’s plans. The Chretien government did the same in 1994 with two documents recalled more for their colour — the Purple Book and the Grey Book — than their titles. Each of these documents not only informed the public about the changes that lay ahead, but also became a script for all bureaucrats, who saw how their own programs and activities fit into the broader picture.

Recommendation 3-8: Higher priority should be assigned to programs and activities that invest in the future as opposed to those that serve the current status quo. This is never easy: the status quo has plenty of advocates; the future does not. It is up to government to fill this breach. As Massachusetts Institute of Technology economist Lester Thurow once suggested, “The proper role of government in capitalist societies is to represent the future to the present.”

Recommendation 3-9: Policy development and the public service in general should be more evidence-based. This requires setting clear objectives based on sound research and evidence. The government should collect data and use it to evaluate whether objectives are being met and how efficiently. Managers should be accountable for achieving these objectives. Where objectives are not being met, programs and services should be adjusted. Reporting should be transparent and audits conducted. The evidence-based model should be applied to the success of individuals and departments in meeting objectives. At the same time, ministries, as well as agencies and entities accountable to the government, should be given some latitude to conduct their affairs in an efficient manner.

Recommendation 3-10: This raises a tricky issue that faces all governments. On the one hand, they need to minimize the cost of operations; on the other, they need rules and reporting to ensure that taxpayers’ money is not being abused. All governments must strike a balance between these competing obligations. We believe the pendulum has now swung too far towards excessive rules. Government operations have trouble responding quickly and consistently, often because it takes so much time, for example, to process minor requests for proposals (RFPs) or to get consistent supplies when everything is broken into discrete RFPs. When there are too many rules, as there are now, government employees and private suppliers are forced to divert people — or even add new staff — to ensure that compliance and reporting requirements are met. This is the case even though the information reported is often not used at the other end to influence changes in policy or service delivery. Although it is impossible to get a full accounting of the costs of monitoring compliance relative to the benefits gained, we believe there are simply too many layers of watchers at the expense of people who actually get things done. The government must find a new middle ground.

Recommendation 3-11: Boundaries between public- and private-sector activities should be shifted and, in many cases, removed. For the most part, policy development needs to remain in the realm of the government, though various stakeholders and community groups could and should be more involved. External groups should even be involved in advising the most senior government decision-making bodies, including the Cabinet.

Recommendation 3-12: Within their operations, public-sector service providers should assign people to jobs where they are most effective, efficient and affordable. Physicians should not perform tasks that could be done more efficiently and at a lower cost by physician assistants, registered nurses, nurse practitioners or pharmacists. Case workers need not deal with all aspects of social assistance, employment or training matters when some clients are willing and able to receive services by telephone or through the Internet. In the policing sector, non-core services such as data entry could be done by clerical staff rather than officers whose time and training are better deployed elsewhere.

Recommendation 3-13: Seek common themes across the reforms to achieve economies of scale in action and simplify communications. Common themes would include a shift towards evidence-based policy development and service delivery; more efficient service delivery models for all areas interacting with the public; the efficient use of and appropriate rates of return on Crown assets; and consolidation of such backroom operations as information technology and human resources.

Recommendation 3-14: Reform must be pervasive and speedy. There is an understandable tendency to approach any set of reforms piecemeal and over an extended period. This tendency must be resisted, in part because the record is not kind to such an approach and more importantly, because it runs contrary to our fiscal mandate to balance the budget by 2017–18. First, the government will need to implement all the reforms we recommend — or at least some reasonable facsimile in fiscal terms — to restrain the growth of program spending enough to achieve balance by 2017–18. This is not a smorgasbord from which the government can choose only the tastiest morsels and ignore the less palatable. Second, the restraint process will succeed only if the public believes the reforms are fair. Broader action favours such a perception as opposed to a view that a handful of programs were unfairly targeted. Third, we can all agree that change is disruptive, but the medicine does not go down more easily if it is dragged out over a long period. Indeed, such delay merely discourages people — public servants and those receiving government services — and postpones the day when a new system is operating efficiently. Although there may be limits to the capacity of the public service to instigate, execute and monitor change, once the financial parameters are set, first for ministries and then for programs, many of the reforms will be handled by people further down the chain.

Chapter 5: Health

Recommendation 5-1: Develop and publish a comprehensive plan to address health care challenges over the next 20 years. The plan should set objectives and drive solutions that are built around the following principles:

The system should be centred on the patient, not on the institutions and practitioners in the health care system;

The plan should focus on the co-ordination of services for patients in a fully integrated system-wide approach;

Reforms should recognize changes and challenges in both demographics and lifestyles by putting more emphasis on chronic than acute care;

At the provincial level, the system must be able to carry out health care capacity planning; it must look at the health needs of the population and project future needs for facilities, services, funding and human resources;

Policies should be based on evidence that provides guidance on what services, procedures, devices and drugs are effective, efficient and eligible for public funding;

There should be a heightened focus on preventing health problems, including the role of public health in meeting this goal;

It should ensure that health data are collected efficiently and shared;

Funding to providers should be based primarily on meeting the needs of patients as they move through the health care continuum; and

The quality of care can and should be enhanced despite the need to restrain increased spending; the objectives of quality care and cost restraint must go hand in hand.

Recommendation 5-2: Evaluate all proposals for change that include efficiencies and cost savings within the vision and plan developed above.

Recommendation 5-3: Divert all patients not requiring acute care from hospitals and into a more appropriate form of care that will be less expensive, improve the patient experience and reduce the patient’s exposure to new health risks.

Recommendation 5-4: Increase the use of home-based care where appropriate to reduce costs without compromising excellent care. For example, home-based care should be used more extensively for recovery from procedures such as hip and knee surgery.

Recommendation 5-5: To improve the co-ordination of patient care, all health services in a region must be integrated.

Recommendation 5-6: Cap the government’s health budget at 2.5 per cent or less annual growth through 2017–18. After 2017–18, annual health cost increases must be restrained to no more than five per cent, a level necessary to keep the provincial budget balanced without relying on tax increases or an unacceptable squeezing-out of other public services.

Recommendation 5-7: Support a gradual shift to mechanisms that ensure a continuum of care and care that is community-based. Funding for community-based care may need to grow at a higher rate in the short to medium term in order to build capacity to take pressure off acute care facilities; on the other hand, with a shift away from a hospital focus, hospital budgets could grow less rapidly than the average.

Recommendation 5-8: Achieve spending restraint by moving the health care system towards a more efficient overall design and finding efficiency gains within its constituent parts.

Recommendation 5-9: Do not apply the same degree of fiscal restraint to all parts of health care. Some areas — including community care and mental health — will need to grow more rapidly than the average.

Recommendation 5-10: Set the overall principles for provincewide health care, but continue to organize the delivery of health care on a regional basis.

Recommendation 5-11: A regional health authority should be clearly identified as the key point for integrating services and institutions across the full continuum of care for a geographic area.

Recommendation 5-12: Reduce the number of organizations with which the Local Heath Integration Networks must deal on a day-to-day basis.

Recommendation 5-13: Consolidation of health service agencies and/or their boards should occur where appropriate, while establishing any new consolidated agencies as separate legal entities to limit major labour harmonization and adjustment costs.

Recommendation 5-14: Establish an advisory panel in each Local Health Integration Network with appropriate representation of the regional health care stakeholders, including community hospitals, physicians, community care and long-term care homes.

Recommendation 5-15: The Local Health Integration Networks must integrate care across the system by sharing information on patients among health care providers, co-ordinating decisions and allocating funds to best reflect regional needs.

Recommendation 5-16: Use data and information sharing to better understand and address the fiscal impacts of chronic and complex conditions and at-risk patients with mental health and addiction issues (see Recommendations 5-37 to 5-41 for more on managing their care).

Recommendation 5-17: Use information from funding models such as the Health-Based Allocation Model ( HBAM ) to examine where services may not be provided equally across health regions and conduct ongoing evaluations of each Local Health Integration Network’s progress in managing high-use populations. (See Recommendations 5-50 and 5-73 for more details on HBAM .)

Recommendation 5-18: Where feasible, services should be shifted to lower-cost caregivers. Across the spectrum of caregivers, full scope of practice needs to be exercised.

Recommendation 5-19: A broader perspective should be applied to decisions that are made on the scope of practice of health professionals. Government should play a more active role in working with the professional colleges to apply a system-wide approach rather than dealing with individual professions in isolation.

Recommendation 5-20: Maximize opportunities to use nurse practitioners with the aim of efficiency, while maintaining excellent care.

Recommendation 5-21: Recognize the increased demand for nurses in the capacity of nursing programs at colleges and universities and their ability to train more nurses.

Recommendation 5-22: Increase the use of personal support workers and integrate them into teams with nurse practitioners, registered nurses and other staff members where appropriate to optimize patient care.

Recommendation 5-23: Local Health Integration Networks need to use funding as a lever to encourage hospitals and other health care providers to use the full scope of practice of their staff.

Recommendation 5-24: Make changes to the Pharmacy Act to enable an expanded scope of pharmacy practice. This would involve developing supporting regulations to permit pharmacists to administer routine injections and inhalations, including immunization.

Recommendation 5-25: Hospital capital plans that extend out-of-hospital services such as those for outpatients should not be entertained by Local Health Integration Networks. Hospitals should conduct affairs largely within hospitals, and others, such as Community Care Access Centres (CCACs) and private health care operators, should be responsible for providing out-of-hospital services. The CCACs and private health care operators have demonstrated that they are capable of doing this work for less than hospitals.

Recommendation 5-26: Resist the natural temptation to build many more long-term care facilities for an aging population until the government can assess what can be done by emphasizing to a greater extent the use of home-based care that is supported by community services. Home-based care is less expensive and should generate greater population satisfaction.

Recommendation 5-27: Grant Local Health Integration Networks the authority, accountabilities and resources necessary to oversee health within the region, including allocating budgets, holding stakeholders accountable and setting incentive systems.

Recommendation 5-28: Tie compensation for CEOs and senior executives in all parts of the health care system to strategically targeted health outcomes, not the number of interventions performed, through a performance pay framework. Mirror this performance pay approach throughout each hospital, Community Care Access Centre, long-term care facility, etc., at the physician and health care worker levels.

Recommendation 5-29: Support transparency in senior executive and CEO salaries throughout the health care system by publicly posting comprehensive compensation information in a timely fashion.

Recommendation 5-30: Allocate funding based on meeting the needs of the patient as they move through the continuum of care.

Recommendation 5-31: Some regions have developed roles for “clerical system navigators” that co-ordinate appointments and assist patients with required forms and paperwork. Local Health Integration Networks should ensure that a sufficient number of people in this role are put in place across the entire health care system.

Recommendation 5-32: Empower primary caregivers and physicians in the Family Health Teams (FHTs) or specialized clinics to play the role of “quarterback,” tracking patients as they move through the integrated health system. All FHTs should work in tandem with clerical system navigators and hospitalist physicians to track their patients who are in hospitals, from admission to discharge (see Recommendation 5-55 on hospitalists for more details).

Recommendation 5-33: Tightly integrate Community Care Access Centres (CCACs) with Local Health Integration Networks (LHINs) to improve patient case management. There are options that should be explored about the nature of this integration. It could be either through co-operation of two entities or a more formal and complete merger of CCACs into this one key aspect of the work of LHINs.

Recommendation 5-34: Require hospitals to make discharge summaries available electronically to other care providers (e.g., general practitioners, home care) immediately.

Recommendation 5-35: Switch to electronic delivery of laboratory test results to improve timeliness and efficiency, as well as support patient privacy.

Recommendation 5-36: Reduce absenteeism for Ontarians and office visits, while improving patient satisfaction, through secure messaging between patients and providers, online appointment scheduling, access to test results for patients, and online requests for prescription refills and renewal.

Recommendation 5-37: Complex care patients should be managed through interprofessional, team-based approaches to maximize co-ordination with Family Health Teams and other community care providers.

Recommendation 5-38: Chronic issues should be handled by community and home-based care to the fullest extent possible.

Recommendation 5-39: Reach out to patients who need preventive care, particularly chronic disease and medication management, rather than waiting for them to come to get services. Leverage electronic medical records, decision support and secure messaging with Ontarians to achieve these goals.

Recommendation 5-40: Reduce mortality, hospitalizations and costs while improving patient satisfaction by connecting Ontarians who have serious chronic health problems (e.g., congestive heart failure) with ongoing monitoring and support through expanded use of telehomecare.

Recommendation 5-41: Centralize leadership of chronic disease management by developing co-ordinating bodies for chronic conditions including mental health, heart and stroke and renal disease, based on the Cancer Care Ontario model.

Recommendation 5-42: Resource the Local Health Integration Networks adequately to perform their expanded functions. Additional resources should come in large part from the Ministry of Health and Long-Term Care; this would entail a significant transfer of employees.

Recommendation 5-43: Put in place clear structures to clarify the lines of accountability up to the Local Health Integration Networks (LHINs) and the accountability of LHINs to the Ministry of Health and Long-Term Care.

Recommendation 5-44: Move critical health policy decisions out of the context of negotiations with the Ontario Medical Association and into a forum that includes broad stakeholder consultation.

Recommendation 5-45: The Institute for Clinical Evaluative Sciences and Health Quality Ontario must work in tandem, integrating their respective expertise into practical recommendations for health care providers.

Recommendation 5-46: As a body of practice is established, expand the mandate of Health Quality Ontario to become a regulatory body to enforce evidence-based directives to guide treatment decisions and OHIP coverage.

Recommendation 5-47: Make all Health Quality Ontario work public. Use the evidence found to inform directives on practices and what will be covered by OHIP .

Recommendation 5-48: More work must be done on the efficiency front for the Institute for Clinical Evaluative Sciences.

Recommendation 5-49: Explore the potential for a national Organization for Economic Co-operation and Development-type entity that collates and enhances evidence-based policy directions and provides enhanced collaboration on issues across jurisdictions. It could provide a gathering place for dialogue and a secretariat with a capacity for analysis. Such an organization could be housed with the Council of Health Ministers or Deputy Ministers. The federal government should be involved.

Recommendation 5-50: Use data from the Health-Based Allocation Model ( HBAM ) system to set appropriate compensation for procedures and cease the use of average costs to set hospital payments (see Recommendations 5-17 and 5-73 for more details on HBAM ).

Recommendation 5-51: Create a blend of activity-based funding (i.e., funding related to interventions or outcomes) and base funding managed through accountability agreements.

Recommendation 5-52: Create policies to move people away from inpatient acute care settings by shifting access to the health care system away from emergency rooms and towards community care (i.e., walk-in clinics and Family Health Teams), home care and, in some cases, long-term care.

Recommendation 5-53: Encourage hospitals to specialize so all are not trying to provide all services regardless of their comparative advantages.

Recommendation 5-54: Given the burden of alternate level of care ( ALC ) patients on hospital capacity, hospitals must become more effective in optimizing this capacity while applying best practices in planning patient discharges. Further, small hospitals with large ALC populations must be assessed with a goal of redefining their role in care for the elderly. Again, funding should be aligned appropriately.

Recommendation 5-55: Use hospitalist physicians to co-ordinate inpatient care from admission to discharge. Hospitalists should work with Family Health Teams to better co-ordinate a patient’s moves through the health care continuum (acute care, rehabilitation, long-term care, community care and home care).

Recommendation 5-56: Make primary care a focal point in a new, integrated health model.

Recommendation 5-57: Regional health authorities must integrate physicians into a rostered health system and adopt the appropriate measures to address compensation issues across disciplines; that is, the proper blend of salary/capitation and fee-for-service.

Recommendation 5-58: Reduce the sole proprietorship nature of the offices of many primary care physicians and encourage more interdisciplinary integration through performance incentives and accountability.

Recommendation 5-59: Compensate physicians using a blended model of salary/capitation and fee-for-service; the right balance is probably in the area of 70 per cent salary/capitation and 30 per cent fee-for-service.

Recommendation 5-60: Aggressively negotiate with the Ontario Medical Association for the next agreement.

Recommendation 5-61: Adjust fee schedules in a timely manner to reflect technological improvements, with the savings going to the bottom line of less expenditure on health care.

Recommendation 5-62: Make Family Health Teams (FHTs) the norm for primary care and design the incentive structure of physicians’ compensation to encourage this development. Among the key characteristics of FHTs are the following:

The regional health authority should play a key role in determining their relationship with the rest of the health care system and setting ground rules for their operation;

Make outcomes the focus of FHTs, not health interventions. Their operation should be tightened through objectives, accountability and a data collection system;

Conduct research to determine the optimal size of FHTs, taking into account factors such as geography and patient demography. Balancing economies of scale while maintaining personal connections between health care providers and patients is crucial: FHTs need the scale to support a wide range of care providers and be able to support the administration necessary, including the responsibility of tracking people through the system. It has been suggested to the Commission that the optimal size, for larger communities, may be in the range of 8 to 15 physicians, and include practitioners with a wider range of specialties than is now the case. They now typically have only three to eight physicians; and

To provide a range of services at a lower cost, include other health professionals in the FHTs (nurse practitioners, registered nurses, dietitians and midwives, for example). Unlisted practitioners such as physiotherapists and massage therapists would also be part of FHTs; however, their services would be provided on a cost-recovery basis.

Recommendation 5-63: Require Family Health Teams (FHTs) to accept patients who choose them, and the FHTs should work with each patient to connect them with the most appropriate constellation of care providers.

Recommendation 5-64: The regional health authority should establish incentives to discourage Family Health Teams from referring patients to acute care.

Recommendation 5-65: Regional authorities should also be responsible for assigning heavy users of the health care system to the appropriate Family Health Team ( FHT ). If, for example, there are 300 heavy users within a region and three FHTs, the regional health authority would try to steer 100 to each, so that no FHT is overburdened.

Recommendation 5-66: Because Family Health Teams (FHTs) will be responsible for patient tracking, they will need to build a critical mass of an administrative arm to carry out this task. This administrative arm should be shared among a number of FHTs.

Recommendation 5-67: Better after-hours care must be offered and telephone/Internet services should direct patients to the most appropriate and convenient care provider.

Recommendation 5-68: All Family Health Teams must be encouraged to add more specialists to their teams, which will reduce referrals and ease some of the complexities of patient tracking.

Recommendation 5-69: The Ministry of Health and Long-Term Care should allow the flexibility necessary for Family Health Teams to share specialists by permitting part-time contracts.

Recommendation 5-70: All Family Health Team physicians must begin engaging in discussions with their middle-aged patients about end-of-life health care.

Recommendation 5-71: Improve access to care (e.g., in remote communities) and productivity for specialists by triaging appropriate patients for telemedicine services (e.g., teledermatology, teleophthalmology).

Recommendation 5-72: Remove perverse incentives that undermine the quality and efficiency of care. For example, physicians are penalized when one of their patients goes to another walk-in clinic, but not when the patient goes to the emergency department of a hospital. More generally, the fee-for-service compensation model gives an incentive for medical interventions without due consideration to quality and efficiency of care. Such incentive issues must be addressed by focusing the Ontario Medical Association’s negotiations more on quality of care and amending payment systems for physicians and throughout the health care system.

Recommendation 5-73: The model described in the above recommendations must be supported by a robust data collection and sharing system that allows the creation of the necessary records. For example, the model works only if we know how many patients are not visiting emergency departments or how many diabetes patients are not experiencing complications (see Recommendations 5-17 and 5-50 on Health-Based Allocation Model data for more details).

Recommendation 5-74: Increase the focus on home care, supported by required resources, particularly at the community level.

Recommendation 5-75: Match seniors to the services that they need from the earliest available care provider, reduce alternate level of care days, and improve co-ordination of care through the use of referral management tools for long-term care, home care and community services.

Recommendation 5-76: Implement the recommendations contained in “Caring for Our Aging Population and Addressing Alternate Level of Care,” a report prepared by Dr. David Walker and released in August 2011.

Recommendation 5-77: In addition to recommendations contained in “Caring for Our Aging Population and Addressing Alternate Level of Care,” a report prepared by Dr. David Walker and released in August 2011, there is a need for more and varied palliative care; at home and in residential hospices.

Recommendation 5-78: Integrate the public health system into the other parts of the health system (i.e., Local Health Integration Networks).

Recommendation 5-79: Review the current funding model that requires a 25 per cent match from municipalities for public health spending.

Recommendation 5-80: Consider fully uploading public health to the provincial level to ensure better integration with the health care system and avoid existing funding pressures.

Recommendation 5-81: Improve co-ordination across the public health system, not only among public health units, but also among hospitals, community care providers and primary care physicians.

Recommendation 5-82: Replicate British Columbia’s Act Now initiative, which has been identified by the World Health Organization as a best practice for health promotion and chronic disease prevention, in Ontario.

Recommendation 5-83: Have doctors address diet and exercise issues before reaching for the prescription pad when dealing with health issues such as cardiovascular disease and late-onset Type 2 diabetes.

Recommendation 5-84: Do more to promote population health and healthy lifestyles and to reverse the trend of childhood obesity, especially through schools.

Recommendation 5-85: Work with the federal government on nutrition information and, where appropriate, regulation.

Recommendation 5-86: Medical schools should educate students on “system issues,” so they better understand how physicians fit into the health care system; for example, how to deal with patient needs efficiently and effectively, but using fewer resources by connecting different parts of the health care system.

Recommendation 5-87: Do a better job of flagging health professions and locations that are currently in short supply or where shortages can be expected in the future.

Recommendation 5-88: Link the Ontario Drug Benefit program more directly to income.

Recommendation 5-89: Help reduce medication errors through the use of electronic supports to cross-reference multiple prescriptions.

Recommendation 5-90: Reduce fraudulent prescription medication use through the use of drug information systems.

Recommendation 5-91: Pursue — with other provinces — the possibility of establishing a national entity that would set a common price for pharmaceuticals for the entire country (or at least jurisdictions opting in).

Recommendation 5-92: Conduct drug-to-drug comparisons to determine which drug is the most efficient at addressing a given ailment.

Recommendation 5-93: Work with the federal government to ensure that Ontario’s interests in expanding use of generic drugs are not undermined by a Canada-European Union Free Trade Agreement.

Recommendation 5-94: Use pharmacists to their full scope of practice.

Recommendation 5-95: Centralize all back-office functions such as information technology, human resources, finance and procurement across the health system.

Recommendation 5-96: Establish a central mechanism to oversee the creation of a “spot market” for goods and discretionary services, such as diagnostics, infusions and specialist consultation services.

Recommendation 5-97: Put a wider array of specialist services to tender based on price and quality, while remaining under the single-payer model.

Recommendation 5-98: Put to tender more service delivery, but with the criteria for selection based on quality-adjusted metrics rather than just price.

Recommendation 5-99: Accelerate the adoption of electronic records, working in a bottom-up fashion.

Recommendation 5-100: Adopt the Nova Scotia model in which emergency medical technicians provide home care when not on emergency calls; this requires integrating municipal and provincial funding structures.

Recommendation 5-101: Provide better information to individuals and families to facilitate self-care, for people with conditions such as diabetes.

Recommendation 5-102: Begin a dialogue with Ontarians on the issue of expanding the coverage of the health system to include, for example, pharmaceuticals, long-term care and aspects of mental health care.

Recommendation 5-103: Involve all stakeholders in a mature conversation on the future of health care and the 20-year plan.

Recommendation 5-104: Establish a Commission to guide the health reforms.

Recommendation 5-105: Do not let concerns about successor rights stop amalgamations that make sense and are critical to successful reform.

Chapter 6: Elementary and Secondary Education

Recommendation 6-1: To meet our overall fiscal objectives, the Commission believes that the growth rate in the education budget over the term from 2010–11 to 2017–18 must be constrained to one per cent per year.

Recommendation 6-2: The budget constraint must be applied strategically so as not to jeopardize the improvements in results achieved, such as on provincial assessments and with graduation rates.

Recommendation 6-3: The elementary and secondary education sector should stay the course with its current agenda, which consists of three key goals: improving student achievement, closing gaps in student outcomes and increasing confidence in the publicly funded school system. The province and the sector must sustain the current alignment between provincial, school board and school-level efforts, and sustain the “pressure and support” approach adopted in recent years.

Recommendation 6-4: Reforms in the elementary and secondary sector should be introduced so that all stakeholders have their role to play in ensuring the system’s long-term sustainability and so that unnecessary sources of distraction are avoided.

Recommendation 6-5: To ensure transparency and effectiveness, the province should confirm multi-year allocations to school boards for the 2012–13 to 2017–18 period so that they can plan accordingly, have enough time to find the required efficiencies and enter negotiations for renewal of the sector’s collective agreements that will expire on Aug. 31, 2012, with clear knowledge of their budgetary position.

Recommendation 6-6: The Ontario government should put strong pressure on the federal government to provide funding for First Nations on-reserve education that at least reaches parity with per-student provincial funding for elementary and secondary education.

Recommendation 6-7: The province should negotiate with the federal government and First Nations to ensure the establishment of new multi-year, strategic top-up funding agreements for on-reserve schools. These agreements, voluntary for interested First Nations, would ensure that per-student funding for on-reserve schools is at least equivalent to that provided to adjacent English-language public district school boards.

Recommendation 6-8: Agreements with the federal government should facilitate the formation of education entities among participating First Nations with powers similar to provincially funded district school boards. To establish a system of support services for on-reserve schools, chief executive officers of the new education entities should join the Council of Ontario Directors of Education as well as the regional education councils. Additionally, the new education entities should negotiate with the province multi-year targets for the proportion of supervisory officers, principals and teachers who will be deemed qualified by the Ontario College of Teachers. Such qualifications can be earned from existing providers or from newly accredited Aboriginal service providers.

Recommendation 6-9: When negotiating funding agreements, the province should pressure the federal government to increase funding for capital for on-reserve schools and consider transferring this funding to the province, which is better equipped to provide expertise for K–12 capital renewal and construction.

Recommendation 6-10: Failing to come to an agreement with the federal government, the Commission recommends that the province step up to provide funding to ensure that on-reserve schools are funded at parity with adjacent English-language public district school boards.

Recommendation 6-11: Given the difficulties with such an approach, and the prohibitive cost of the program overall at this time, the Commission recommends cancellation of the full-day kindergarten ( FDK ) program, without prejudice to schools that already had FDK before the introduction of this government strategy.

Recommendation 6-12: If the government decides to continue the implementation of the full-day kindergarten program, then the Commission recommends delaying full implementation from 2014–15 to 2017–18 and reducing program costs by adopting a more affordable staffing model, involving one teacher for about 20 students, rather than a teacher and an early childhood educator for 26 students, to help moderate salary expenditures for the program by about $200 million. The government should not confirm full implementation of the program without assurances from school boards, teacher federations and support-staff unions that negotiated annual wage increases by 2017–18 will not be higher than the current trends in the broader public sector, and that the class-size increases and reductions in non-teaching staff contemplated by the Commission by 2017–18 will be achieved.

Recommendation 6-13: Set the cap in class size for primary grades at 23 and eliminate the other requirement that 90 per cent of classes must be at 20 or fewer, and increase the averages in junior/intermediate class sizes from 24.5 to 26 and secondary class sizes from 22 to 24.

Recommendation 6-14: The province should cap the funding of high school credits to 32 successful credits per student, and amend the Education Act to give the power to school boards to charge a modest fee, set by the province, for each additional credit above the 32 successfully completed credit threshold.

Recommendation 6-15: The province should immediately lift the moratorium on the competitive procurement requirement for student transportation, so that competitive bids are used for the 2012–13 school year.

Recommendation 6-16: The province should amend the Education Act to give school boards the power to charge a modest transportation user fee set by the province.

Recommendation 6-17: Education stakeholders should build on the climate of trust and evidence-based decision-making fostered since 2003 to begin a constructive dialogue on how best to find the savings needed to meet student achievement objectives while holding annual spending growth to one per cent. To help stakeholders, the Commission believes the following measures should be phased in progressively over the next six years, in this priority sequence:

Reduce by 25 per cent the per-pupil funding for textbooks and learning materials, classroom supplies and computers;

Increase the average class size from 22 to 24 in Grades 9 to 12;

Set the cap in class size at 23 in primary grades and eliminate the other requirement that 90 per cent of classes must be at 20 or fewer;

Increase the average class size from 24.5 to 26 in Grades 4 to 8 by 2017–18;

Eliminate 70 per cent of the 13,800 additional non-teaching positions created in school boards since 2002–03; and

Reduce by 25 per cent the funding for capital renewal and student transportation.

Recommendation 6-18: The province should review its special education programs and the results they have achieved, including both “section” programs for students in care, custody or treatment, and hospital boards, with the aim of ensuring that funding is being used effectively to improve student outcomes.

Recommendation 6-19: The government should close the Demonstration Schools and reinvest savings to expand alternative secondary school programs in school boards. The three Schools for the Deaf in Belleville, London and Milton should be consolidated into one site to achieve a greater critical mass of students from primary grades through secondary school. Savings should be reinvested in the consolidated school for the deaf and in enhanced opportunities for deaf learners in school boards, colleges and universities. The Ministry of Education should transfer the oversight and management of the Brantford site and of the newly consolidated school for the deaf to one or two English-language school boards, and transfer the oversight and management of the Centre Jules-Léger (School for the Deaf) to a French-language school board.

Recommendation 6-20: The added value of training programs leading to additional qualification should be reviewed, and decisions regarding the granting of qualifications and experience should be made by a body that is independent of teacher federations and school boards.

Recommendation 6-21: The province should be able to exercise legislative and regulatory authority to require that teachers have a minimum number of years of full-time teaching experience before they are allowed to attempt an additional qualification. While they could decide to make contractual arrangements with faculties of education or other service providers, school boards should ultimately have direct oversight of the content of additional qualification courses. The design of such courses should be reviewed in tandem with the new curriculum for the two-year teacher education program in Ontario. Both should be more rigorous and evidence-based, and focused on those aspects of their work that lead to improved student outcomes.

Recommendation 6-22: In the upcoming renewal of collective agreements, school boards should negotiate the removal of entitlements associated with retirement gratuities to help offset the costs of future economic adjustments. School boards’ power in the Education Act to offer retirement gratuities should be removed.

Recommendation 6-23: The government should work with school boards, teacher federations and support-staff unions to investigate mechanisms involving shared ownership and administration of benefit programs in the education sector.

Recommendation 6-24: The government should amend the Education Act to give power to the minister to order the sale of closed schools or other unused properties, especially when such dispositions could meet other needs in the broader public sector.

Recommendation 6-25: The province should no longer provide top-up funding to underutilized secondary schools if these schools could instead accommodate some or all of the Grade 7 and 8 students in their catchment area.

Recommendation 6-26: To mitigate further increases, the province should, in future discussions with the Ontario Teachers’ Federation, reject further employer rate increases to the Teachers’ Pension Plan beyond the current rate, and instead examine which benefits could be reduced prospectively to make the Plan more affordable and benchmark any changes to the provisions contained in other plans.

Recommendation 6-27: The government should work in a co-ordinated fashion to discuss supply planning and, in particular, the overproduction of teachers, with Ontario’s 13 universities offering teacher education programs. Attempts should be made to direct teacher education spaces to areas of greater need, especially in light of the staffing changes contemplated by the Commission between now and 2017–18.

Chapter 7: Post-Secondary Education

Recommendation 7-1: Grow government funding for the post-secondary education sector by 1.5 per cent per year until 2017–18.

Recommendation 7-2: Work with post-secondary institutions to reduce bargained compensation increases, where they exist, and instead align them with trends in more recent settlements in the broader public sector; a rigorous performance system should also be introduced to guide compensation, where one is not already in place.

Recommendation 7-3: If capital budgets are constrained, post-secondary institutions should consider using alternative financing and procurement, especially for buildings that do not qualify for government funding, such as residences.

Recommendation 7-4: By 2012–13, establish multi-year mandate agreements with universities and colleges that provide more differentiation and minimize duplication; these should be implemented beginning in 2013–14.

Recommendation 7-5: Institute a process for establishing mandate agreements using a review by either a blue-ribbon panel or the Higher Education Quality Council of Ontario to ensure the highest-quality programs are funded to grow and expand. This should be completed in the 2012–13 fiscal year and must be transparent for the institutions and the public.

Recommendation 7-6: Establish and implement a rational and strategic division of roles between the college and university systems.

Recommendation 7-7: Create a comprehensive, enforceable credit recognition system between and among universities and colleges. This is an absolutely essential feature of differentiation.

Recommendation 7-8: Post-secondary institutions need to devote more resources to experiential learning such as internships; allow for more independent or self-assigned study; develop problem-based learning modules; and increase study abroad and international experiences. Many institutions already incorporate these features into their programs, funding them from within existing portfolios.

Recommendation 7-9: Encourage universities that do not presently have flexible provisions regarding teaching and research workloads in their collective agreements with faculty to consider such provisions in future bargaining. While each university must conduct teaching and research, top-performing teachers and researchers should be recognized with the appropriate workloads and rewards.

Recommendation 7-10: Have post-secondary institutions redesign incentive systems to reward excellent teachers, as is currently done for researchers.

Recommendation 7-11: Link further provincial funding allocations to quality objectives, which will encourage post-secondary institutions to be more responsive. In addition, the province should alter the funding model to also reward degrees awarded, rather than just enrolment levels.

Recommendation 7-12: Government and post-secondary institutions must measure learning outcomes; that is, the value added through education, not just whether a person graduates.

Recommendation 7-13: Enhance performance measures in multi-year accountability agreements with post-secondary institutions through the use of teacher performance scores and student satisfaction ratings where the primary reasons for dissatisfaction are adequately captured.

Recommendation 7-14: Work with private career colleges to collect and publish the same performance indicators as public colleges and universities. Private career colleges should bear the cost of such reporting.

Recommendation 7-15: As a part of the mandate agreements with post-secondary institutions, tie outcome quality indicators to funding.

Recommendation 7-16: Evaluate the research funding system of post-secondary institutions and research hospitals as a whole, including how it is affecting university and hospital budgeting practices.

Recommendation 7-17: Award provincial research funding more strategically and manage it more efficiently. Consolidating and offering a single-window approach for access and reporting through an online portal will greatly improve efficiency and reduce paperwork, both for government and for post-secondary institutions.

Recommendation 7-18: Maintain the existing tuition framework, which allows annual tuition increases of five per cent. However, simplify the design to maintain the overall ceiling but allow institutions greater flexibility to adjust tuition fees at the program level, within the ceiling.

Recommendation 7-19: Maintain the Ontario Student Access Guarantee, which represents 10 per cent of additional tuition revenue that institutions are required to set aside to fund bursaries and other student assistance programs.

Recommendation 7-20: Reshape student financial assistance provided by both the federal and provincial governments, including the newly announced 30% Off Ontario Tuition grant, to target more of the assistance to low-income students whose access is most likely to be compromised by financial obstacles and broaden the approach to improving access to

post-secondary education.

Recommendation 7-21: Explore phasing out provincial tuition and education tax credits to invest in upfront grants.

Recommendation 7-22: Streamline student financial assistance by decoupling loans and grants. Eligibility for grants should not be contingent on loan applications.

Recommendation 7-23: Harmonize the variety of scholarships, grants and other assistance programs that the government offers, into already-existing programs of a similar nature, across post-secondary institutions.

Recommendation 7-24: Lower the current 25 per cent Ontario Student Assistance Program default-rate threshold for triggering cost-sharing to 20 per cent for all post-secondary institutions in Ontario and work with institutions towards the objective of setting a still-lower threshold in future.

Recommendation 7-25: Extend the review period for Ontario Student Assistance Program default rates, which are now measured roughly two years after borrowers start repaying.

Recommendation 7-26: Have the post-secondary sector leverage its existing collective purchasing capacity through the Ontario Education Collaborative Marketplace and regional buying groups.

Recommendation 7-27: Establish a single pension fund administrator for all university and college pensions, while recognizing differences in pensions.

Recommendation 7-28: Before new capital spaces are approved, require universities and colleges to demonstrate increased use of space and consider year-round optimization of existing spaces. Priority should be given to the deferred maintenance in the current capital stock before new capital projects.

Recommendation 7-29: Compel post-secondary institutions to examine whether they can compress some four-year degrees into three years by continuing throughout the summer.

Recommendation 7-30: Cease funding for international marketing of Ontario’s universities and integrate it into existing trade mission activities. Universities, colleges and the federal government already invest in these activities.

Chapter 8: Social Programs

Recommendation 8-1: Hold growth in social programs spending to 0.5 per cent per year.

Recommendation 8-2: Move aggressively towards a fully integrated benefits system that simplifies client access, improves client outcomes and improves fiscal sustainability through greater program effectiveness and reduced administrative costs.

Recommendation 8-3: A fully integrated benefits system should seek efficiencies by, at a minimum, centralizing income testing and payment delivery; automating the processing of applications, eligibility and payments; automating income verification; consolidating program delivery; and standardizing eligibility criteria.

Recommendation 8-4: Collect the information necessary to deliver and evaluate a fully integrated benefits system. In doing so, continue to respect and protect personal information and privacy.

Recommendation 8-5: The Commission for the Review of Social Assistance in Ontario should examine system design options that deliver a more efficient and higher-quality service to social assistance recipients. This examination should consider combining Ontario Works and the Ontario Disability Support Program, and having the combined program delivered at the local level. It should also address the further integration of employment services available through Employment Ontario.

Recommendation 8-6: Undertake a thorough initial assessment of new entrants into social assistance to identify the degree of intervention required to help them return to the labour market. Triage new entrants to appropriate supports according to this assessment.

Recommendation 8-7: Streamline and integrate other employment and training services with Employment Ontario, including the bulk of the employment and training service component of social assistance, in a carefully sequenced manner.

Recommendation 8-8: Prepare and support people with disabilities who are entering the workplace. Work with employers and fellow employees to properly understand and accommodate the specific needs of the individual in the workplace.

Recommendation 8-9: Advocate for federal reforms in two key areas:

Work with other provinces and the federal government to establish a national income-support program for people with disabilities who are unlikely to re-enter the workforce.

Implement the final recommendations of the Mowat Centre Employment Insurance Task Force.

Recommendation 8-10: If growth in expenditures for social programs is contained below the 0.5 per cent annual growth rate, reinvest savings into social assistance, with priority given to:

Increasing asset limits for social assistance qualification;

Tying specific benefits (beginning with the Ontario Drug Benefit program) to income levels rather than to social assistance status to help tear down the “welfare wall”; and

If funds remain, raising basic needs and shelter amounts.

Recommendation 8-11: Continue implementing reforms to child welfare proposed by the Commission to Promote Sustainable Child Welfare. This must include building on reforms to Children’s Aid Societies, implementing an outcome-based accountability structure and strengthening links between the child welfare sector and services in other sectors, such as education, post-secondary education, and employment and training services.

Recommendation 8-12: In light of the Commission’s recommendation to reinvest savings achieved by holding the increase of social program spending below the recommended 0.5 per cent annual growth rate into specific social assistance reforms, the government should retain the current maximum level of the Ontario Child Benefit.

Recommendation 8-13: Reconfigure child and youth mental health services to consolidate agencies and improve service delivery and integration both within the sector itself and with other sectors such as children’s services, health, education and youth justice.

Recommendation 8-14: Integrate children’s services to enhance early identification and intervention.

Recommendation 8-15: Move towards consolidating developmental services funding for community-based support programs into a single direct funding program.

Recommendation 8-16: Reduce excess capacity in the youth justice system through strategic closures of facilities.

Recommendation 8-17: Reform funding practices in the non-profit sector to increase flexibility and reduce administrative costs by focusing on measuring outcomes rather than inputs.

Recommendation 8-18: Provide a single point of access within government for the non-profit sector to improve and broaden relationships across ministries that enter into contracts with the non-profit sector, using a model such as the Open for Business initiative.

Recommendation 8-19: Undertake pilot projects using social impact bonds across a range of applications.

Chapter 9: Employment and Training Services

Recommendation 9-1: Focus the efforts of Employment Ontario on clients who need complex interventions. Streamline clients requiring modest intervention to low-cost, self-serve resources as efficiently as possible.

Recommendation 9-2: Streamline and integrate other employment and training services with Employment Ontario, including the bulk of the employment and training service component of social assistance and integration and settlement services for newcomers, in a carefully sequenced manner.

Recommendation 9-3: Advocate for a comprehensive training agreement to replace the patchwork of federal-provincial employment and training funding agreements currently in place, many of which are about to expire, with a single arrangement.

Recommendation 9-4: Tie employment and training programs more explicitly to measured outcomes. Data collection must in turn be improved.

Recommendation 9-5: Advocate for the collection of sub-provincial data in all future federal surveys on labour vacancies. Leverage labour vacancy data to inform employment and training program design and delivery.

Recommendation 9-6: Transfer responsibility for Workforce Planning Boards to the Ministry of Training, Colleges and Universities’ regional offices to develop stronger local linkages and broaden community and regional planning for economic development.

Recommendation 9-7: Direct Workforce Planning Boards to encourage employers to increase investments in workplace-based training.

Recommendation 9-8: Develop a labour-market policy framework to link planning for employment and training services more strongly to economic development initiatives led by ministries such as Economic Development and Innovation; Agriculture, Food and Rural Affairs; and Northern Development and Mines.

Recommendation 9-9: Shift the responsibility for all apprenticeship administration to other actors in the sector. Functions related to the administration of apprenticeship classroom training should be given to colleges and union training centres. All other administrative responsibilities for apprenticeships should be transferred to the College of Trades over time.

Chapter 10: Immigration

Recommendation 10-1: Develop a position on immigration policies that is in the province’s best economic and social interests. Present this position to the federal government with the expectation that, as the largest recipient of immigrants in Canada, Ontario’s interest will be given considerable weight in federal policy development.

Recommendation 10-2: Catalyze national discussions on immigration policy as the successful integration of immigrants is critical for Canada’s and Ontario’s economic futures.

Recommendation 10-3: Advocate the federal government for a greater provincial role in immigrant selection to ensure that the level and mix of immigrants coming to Ontario is optimized to support economic prosperity and improve outcomes for immigrants. Barring success, advocate for an expanded Provincial Nominee Program.

Recommendation 10-4: Press the federal government to be more transparent in its refugee policies and practices and to compensate Ontario for the costs of providing additional social supports to refugees and refugee claimants.

Recommendation 10-5: Advocate for the federal government to undertake a pilot program equivalent to Australia’s pre-application skills assessment.

Recommendation 10-6: Streamline and integrate provincially delivered integration and settlement services for recent immigrants with Employment Ontario.

Recommendation 10-7: Advocate for devolving federal immigrant settlement and training programs to the province with an appropriate funding mechanism, similar to those established in British Columbia and Manitoba.

Chapter 11: Business Support

Recommendation 11-1: Government needs to publish an “economic vision” for Ontario.

Recommendation 11-2: Expand government reviews of direct business support programs and tax expenditures to include supports such as business services, procurement, and publicly funded research and development.

Recommendation 11-3: Refocus the mandate of business support programs from job creation to productivity growth in the private sector.

Recommendation 11-4: Starting in 2012–13, make ministries responsible and accountable for tax expenditures that align with their respective program areas. Ministries should initially be provided with the means to fund the tax expenditures (i.e., a net zero impact for the ministries), but after that they will have to manage the pooled envelope of tax expenditures and direct business support programs to meet budgetary targets.

Recommendation 11-5: Introduce a new funding model that encourages efficiency and harmonizes efforts across ministries. We propose that money for both direct and indirect business support programs, including refundable tax credits, should be pooled into a single funding envelope.

Recommendation 11-6: Sunset all current direct business support programs in 2012–13. After accounting for legal commitments and legacy projects, as well as the 2017–18 deficit reduction target, pool the remaining funds and tax expenditures into a single envelope used to fund business support programs submitted by ministries. These programs must align with the productivity focus of the government economic development policy and meet rigorous design criteria.

Recommendation 11-7: Follow the Public Sector Accounting Board ( PSAB ) recommendation to report transfers through the tax system as expenses, and adopt the PSAB standard for tax revenue beginning with the 2012 Ontario Budget. In 2011, Ontario provided refundable business tax credits (tax credits that are “refunded” or paid out, even if no tax is payable) totalling $723 million to three main areas: media industries, research and development, and apprenticeship and co-op student training. Many of these tax credits overlap with the objectives of direct business support programs, and all should be subjected to the same degree of scrutiny as program spending. Further gains could be achieved by making the tax system more neutral, removing special preferences that favour some business activities over others, and better aligning refundable corporate income tax credits with direct business support programs.

Recommendation 11-8: Introduce legislation to sunset all current refundable corporate income tax (CIT) credits in 2012–13 as part of the government’s tax expenditure review. Add refundable CIT credits that demonstrate effectiveness and administrative efficiency into the single envelope used to fund business support programs, and include revenue forgone from those tax credits in the funding allocation of an appropriate ministry.

Recommendation 11-9: Restrict the Ontario small business deduction ( SBD ) for large Canadian-controlled private corporations by paralleling the federal business limit reduction, and include the Ontario SBD in the review of tax expenditures for effectiveness and administrative efficiency.

Recommendation 11-10: Work with the federal government to ensure that tax expenditures outside of Ontario’s control maximize value for money and directly support economic growth in Ontario.

Recommendation 11-11: Review and rationalize the current provincial financial support provided to the horse racing industry so that the industry is more appropriately sustained by the wagering revenues it generates rather than through subsidies or their preferential treatments.

Recommendation 11-12: Eliminate the Ontario resource tax credit and review the mining tax system to ensure that the province is supporting the exploration and production of minerals in Ontario while receiving a fair return on its natural resources.

Recommendation 11-13: Establish a more user-friendly, “one-window” portal where clients can have seamless access to information about all business support and other economic development programs provided by all ministries, and be able to make online transactions such as applications, approvals, and financial and other types of reports.

Recommendation 11-14: Establish single, shared “back-office” support for all ministries in the delivery of their business support programs, including contract administration, payment processing, expenditure tracking, client contacts, project milestones and outcomes.

Recommendation 11-15: Establish a four-year sunset rule for all future business support programs. Extend only programs that have demonstrated their merit through a mandatory, comprehensive evaluation in the third year of operation — and end all others.

Recommendation 11-16: Publish an annual list of direct business support programs, tax expenditures and related annual spending. In addition, a list of companies receiving direct financial support from the government, including total amount received, should be published.

Chapter 12: Infrastructure, Real Estate and Electricity

Recommendation 12-1: Place more emphasis on achieving greater value from existing assets in asset management plan reporting requirements than is currently proposed in the Long-Term Infrastructure Plan for certain organizations (e.g., universities, municipalities, etc.).

Recommendation 12-2: Implement full cost pricing for water and wastewater services.

Recommendation 12-3: Where gaps in information and evidence exist, review the roles and operations of public and private mass transit service providers in the Greater Toronto and Hamilton Area and services provided by Ontario Northland Transportation Commission in the north to find efficiencies in those regions’ transportation networks. Act on that evidence to improve the efficiency of those services.

Recommendation 12-4: Following the precedent set by the Toronto Transit Commission, begin charging for parking at GO Transit parking lots.

Recommendation 12-5: Pursue a national transit strategy with the federal government, other provinces and municipalities.

Recommendation 12-6: Engage citizens in an open, public dialogue on how best to create new revenue sources for future transportation capital needs.

Recommendation 12-7: Subject ministries to market prices for the use of government real estate.

Recommendation 12-8: Consolidate the real estate and accommodation function now resting in line ministries and locate it centrally at the Ministry of Infrastructure.

Recommendation 12-9: Develop a strategic plan for the province’s real estate portfolio that adopts market principles for the acquisition, disposition, use and investment in real estate.

Recommendation 12-10: Eliminate the Ontario Clean Energy Benefit as quickly as possible.

Recommendation 12-11: Review all other energy subsidy programs against measures of value for money and achievement of specific policy goals.

Recommendation 12-12: Produce an Integrated Power System Plan built on the foundation of the province’s Long-Term Energy Plan.

Recommendation 12-13: Consolidate Ontario’s 80 local distribution companies along regional lines to create economies of scale.

Recommendation 12-14: As part of the review of the feed-in tariff ( FIT ) program, take steps to mitigate its impact on electricity prices by:

Lowering the initial prices offered in the FIT contract and introducing degression rates that reduce the tariff over time to encourage innovation and discourage any reliance on public subsidies; and

contract and introducing degression rates that reduce the tariff over time to encourage innovation and discourage any reliance on public subsidies; and Making better use of “off-ramps” built into existing contracts.

Recommendation 12-15: Procure larger generation facilities through a request for proposal process.

Recommendation 12-16: Review the roles of various electricity sector agencies to identify areas for economies in administration. This could include investigating the potential to co-ordinate back-office functions.

Recommendation 12-17: Make wholesale electricity prices inclusive of transmission costs such as capacity limitations and congestion as part of a comprehensive restructuring of the wholesale electricity market.

Recommendation 12-18: Make regulated prices more reflective of wholesale prices by increasing the on-peak to off-peak price ratio of time-of-use pricing and by making critical peak pricing available on an opt-in basis.

Recommendation 12-19: Co-ordinate a comprehensive, proactive electricity education strategy across sector participants that at a minimum covers:

Ontario’s electricity resources including nuclear, hydroelectric, thermal and renewable generation;

The role and value of electricity import and export markets;

Roles and responsibilities of the various entities operating in the electricity sector;

The evolving role of the electricity ratepayer in the smart grid paradigm; and

Electricity prices — what drives them, how they are communicated and how they are best responded to.

Recommendation 12-20: Strategically promote Ontario’s strengths in the energy sector, capitalizing on export opportunities for domestic goods and services.

Chapter 13: Environment and Natural Resources

Recommendation 13-1: Move towards full cost recovery and user-pay models for environmental programs and services.

Recommendation 13-2: Rationalize roles and responsibilities for environmental protections that are currently shared across levels of government.

Recommendation 13-3: Employ a risk-based approach for environmental approvals that focuses on improving outcomes and prevention.

Recommendation 13-4: Review opportunities to further streamline the environmental assessment process, such as co-ordinating further with the federal government’s process or integrating it with certain approvals.

Recommendation 13-5: Place greater emphasis on prevention and the polluter-pay principle for contaminated sites using appropriate financial tools, such as financial assurance.

Recommendation 13-6: Review the effectiveness of the current governance structure of the Ontario Clean Water Agency to evaluate the merits of restructuring it as a for-profit, wholly owned government entity.

Recommendation 13-7: Rationalize and consolidate the entities and agencies involved in land use planning and resources management.

Recommendation 13-8: Ensure that the government’s approach to the Ring of Fire maximizes opportunities for Aboriginal Peoples and all Ontarians.

Chapter 14: Justice Sector

Recommendation 14-1: Improve evidence-based data collection in the justice sector to achieve better outcomes in sector programs.

Recommendation 14-2: Increase use of the Justice On Target program to assist with the reduction of custody remand, and implement evidence-based approaches to increase efficiency in the field of family law and family courts.

Recommendation 14-3: Expand diversion programs for low-risk, non-violent offenders with mental illness as an alternative to incarceration.

Recommendation 14-4: Review the core responsibilities of police to eliminate their use for non-core duties. This review would include an examination of alternative models of police service delivery. Criteria for the review would include determining the relative costs of the various security providers and an evaluation of their respective comparative advantages.

Recommendation 14-5: Use alternative service delivery for the delivery of non-core services within correctional facilities, where it is feasible.

Recommendation 14-6: Continue the process of clustering adjudicative tribunals across the Ontario Public Service.

Recommendation 14-7: Examine integration opportunities and consolidate where possible public safety training in policing, fire services and correctional services, which are currently delivered individually through their respective colleges.

Recommendation 14-8: Have the justice sector continue to work with Infrastructure Ontario to use alternative financing and procurement to assist in replenishing its capital infrastructure.

Recommendation 14-9: Improve co-ordination between federal and provincial governments in areas such as justice policy and legislation, law enforcement and correctional services.

Recommendation 14-10: Negotiate the transfer of responsibility for incarceration for sentences longer than six months to the federal government.

Chapter 15: Labour Relations and Compensation

Recommendation 15-1: Establish an independent working group to consider and determine which broader public-sector occupations and industries should be deemed as providing essential services, the appropriate essential-worker designation process, and the appropriate form of dispute resolution mechanism for broader public-sector industries and occupations.

Recommendation 15-2: Establish the overall principles/outcomes necessary for reform to the interest arbitration process going forward.

Recommendation 15-3: The normal course of an arbitration process should begin with mediation, prior to arbitration, to attempt to arrive at a negotiated settlement between the parties.

Recommendation 15-4: The arbitration system needs to be shifted in favour of more objective analysis, based on objective criteria, and supported by systematic data and research.

Recommendation 15-5: Provide zero budget increase for wage costs in the Ontario government so any increases must be accounted for within the respective growth rates recommended in this report.

Recommendation 15-6: Bumping provisions (i.e., seniority) in collective agreements are unduly impeding the move towards a progressive and efficient public service. The government needs to work with bargaining agents and employers to explore options for modifying these provisions and monitor progress towards fixing this problem.

Recommendation 15-7: Do not let concerns about successor rights in the broader public sector stop privatizations or amalgamations that make sense and are critical to successful reform. Inherited agreements do not live forever; provisions can be accepted initially and bargained differently when they come up for renewal.

Recommendation 15-8: Consider expanding the authority of the Ontario Labour Relations Board to facilitate the establishment of effective and rationalized bargaining structures that support the delivery of quality and effective public services.

Recommendation 15-9: Further rationalize bargaining, while recognizing that multiple models of rationalized bargaining exist (e.g., centralized, co-ordinated, legislated, voluntary). Work collaboratively with broader public-sector employers and bargaining agents to determine the most appropriate model on a sector-by-sector basis.

Recommendation 15-10: The government should facilitate a voluntary movement to centralized bargaining for municipalities — particularly in relation to police and firefighting bargaining.

Recommendation 15-11: Establish a Labour Relations Information Bureau to collect and disseminate the range of data and information relevant to employers and unions in the broader public sector in their negotiations, and identify data and other information/knowledge gaps. Of particular importance is developing data and measures of productivity.

Recommendation 15-12: Introduce a comprehensive and transparent benchmarking system for Ontario Public Service and broader public-sector compensation, which would include a costing of the full compensation package, including benefits, pensions and moving through “grids” with seniority.

Recommendation 15-13: Ensure that leaders in the Ontario Public Service and broader public sector are held to account and that they are adequately compensated and encouraged through incentives to lead and excel.

Recommendation 15-14: Ensure that the job descriptions and collective agreement provisions defining management’s ability to organize work are flexible enough to allow for the movement of people to ensure that the best people are in the right places at the right time.

Recommendation 15-15: Provide a better sense of expectations and objectives for each program, how those fit into the broader public policy thrust, and communicate those expectations to the broader public sector.

Chapter 16: Operating and Back-Office Expenditures

Recommendation 16-1: Expand the services ServiceOntario delivers. This includes pursuing additional partnerships for service delivery within the Ontario Public Service, and furthering service delivery partnerships with municipal and federal levels of government.

Recommendation 16-2: The government should direct clients to more convenient and less expensive channels, such as online service delivery for birth registration.

Recommendation 16-3: ServiceOntario should optimize current virtual processes.

Recommendation 16-4: The government needs to increase ServiceOntario’s current annual $2 million capital budget.

Recommendation 16-5: Savings from efficiency gains in ServiceOntario operations should be used to generate a fiscal dividend.

Recommendation 16-6: Where possible, private-sector participation should be used to move ServiceOntario further towards a full cost recovery model.

Recommendation 16-7: The government should review existing agency mandates and functions to determine if greater efficiencies could be achieved through rationalization or consolidation of programs, delivery through existing ministry resources, or the outright elimination of functions.

Recommendation 16-8: Where there is an existing non-tax revenue stream or where such a revenue stream can be created, strong consideration should be given to transferring or establishing responsibility for direct delivery to an arm’s-length, not-for-profit corporation, under the Delegated Administrative Authorities or similar model.

Recommendation 16-9: Consideration should be given to rationalizing and consolidating programs that regulate inter-related sectors or that could otherwise gain efficiencies from greater integration.

Recommendation 16-10: The government should shift its service delivery of information and information technology (I& IT ) from in-house to external sources, where feasible.

Recommendation 16-11: The government should ask the Ontario Auditor General to help find an appropriate balance between ensuring accountability and continuing oversight of compliance with rules and regulations.

Recommendation 16-12: At a minimum, the government should allow principles of efficiency to drive accountability programs, such as switching from individually tracked expenses to a per diem for civil servants and consultants, as is done by the federal government.

Recommendation 16-13: Selected shared services should be expanded to agencies, boards and commissions and the broader public sector.

Recommendation 16-14: The government should consolidate information and information technology (I& IT ) services throughout the broader public sector.

Recommendation 16-15: Significant savings and efficiencies can be achieved by further co-ordinating existing horizontal supply chains across the broader public sector.

Recommendation 16-16: The province should take a direct leadership role in using core provincial infrastructure and expertise to foster shared services across the broader public sector. Significant economies of scale can be created through common shared services foundations, applications, resources and expertise.

Recommendation 16-17: Expand consolidation of maintenance and plant management practices already established in the Ontario Public Service into the broader public sector to create efficiencies.

Recommendation 16-18: The Ontario Public Service should develop an integrated transfer payment operation centre and an enterprise grant management system.

Recommendation 16-19: Consolidate back-office operations for grant programs or transfer payments with identical recipients.

Chapter 17: Government Business Enterprises

Recommendation 17-1: Do not partially or fully divest any or all of the province’s government business enterprises — Ontario Lottery and Gaming Corporation, Liquor Control Board of Ontario, Ontario Power Generation and Hydro One — unless the net, long-term benefit to Ontario is considerable and can be clearly demonstrated through comprehensive analysis.

Recommendation 17-2: While continuing to promote socially responsible consumption, undertake initiatives to enhance the Liquor Control Board of Ontario’s profits, including:

Direct it to use its purchasing power more effectively and improve its markup structure for setting retail prices;

Continually compare the merits of providing supports to Ontario producers against desired policy outcomes; and

More aggressively pursue store expansion.

Recommendation 17-3: Improve the Ontario Lottery and Gaming Corporation’s efficiency through, at a minimum, the following measures:

Close one of the two head offices;

Close one of the two casinos in Niagara Falls;

Allow slot machine operations at sites that are not co-located with horse racing venues; and

Stop subsidizing the purchase and provision of lottery terminals to point-of-sale locations and begin to introduce other points of sale for lotteries.

Recommendation 17-4: Re-evaluate, on a value-for-money basis, the practice of providing a portion of net slot revenues to the horse racing and breeding industry and municipalities in order to substantially reduce and better target that support.

Recommendation 17-5: Consider directing the Ontario Lottery and Gaming Corporation to expand its existing business lines, develop new gaming opportunities and make effective use of private-sector involvement.

Recommendation 17-6: The government should avoid intervening in Ontario Power Generation or Hydro One’s rate filings for the purpose of delaying short-term price increases; too often this leads to greater costs down the road. When regulations or directives are required that impinge on normal utility business practices, the policy objectives being sought must be transparent.

Recommendation 17-7: The government should seek and achieve efficiencies within the operations of Ontario Power Generation and Hydro One through means such as strategic partnerships.

Recommendation 17-8: Each government business enterprise must continue to build on its industry’s best practices to improve its operational efficiency. Each should revisit memorandums of understanding and other agreements to ensure that they reflect commercial mandates. And each should undergo peer ranking and benchmarking on the basis of financial and other metrics both to better understand the organization’s relative performance and find efficiencies.

Chapter 18: Revenue Integrity

Recommendation 18-1: Work with the federal government to ensure that a fair share of a company’s worldwide income is allocated to Canada and the provinces.

Recommendation 18-2: Work with the federal government to address aggressive interprovincial and international tax avoidance activities by:

Undertaking additional data review and research to identify activities of particular concern to Ontario;

Entering into an agreement with the Canada Revenue Agency to invest resources in additional compliance efforts; and

Implementing additional reporting requirements that disclose activities that cause income and losses to be allocated to a province where the underlying economic activity was minimal or did not occur.

Recommendation 18-3: Collaborate with the federal government and other provinces to investigate options to tax corporations on a consolidated basis, with the purpose of ensuring a fair allocation of losses and income across Canada.

Recommendation 18-4: Enhance Ontario’s ability to detect and recover revenues from underground economic activity by linking more databases to reported transactions for tax purposes.

Recommendation 18-5: Review the adoption of government-authorized sales-recording modules in certain sectors (e.g., food services) to address “zapper” software (zappers remove a vendor’s record of sale).

Recommendation 18-6: Develop a concept of self-certification of electronic point-of-sales (ePOS) software. The self-certification is based on the principle of tax authorities developing and publishing a set of requirements for accounting software and ePOS systems.

Recommendation 18-7: Develop a public awareness campaign on the impact of the underground economy. For example, by using unregistered contractors or contractors who do not issue receipts, there are risks of not obtaining a warranty for repairs, risks of not being able to seek legal remedy for poor workmanship, and risks of liability for injuries or damages that occur on a customer’s premises.

Recommendation 18-8: Create employee deeming provisions where businesses substitute independent contractors for employees to avoid paying Ontario’s Employer Health Tax.

Recommendation 18-9: Establish a forum to discuss emerging issues and trends in the underground economy as well as innovations and best practices for addressing them. The forum should include representatives from various ministries, and federal and municipal governments as well as industry associations.

Recommendation 18-10: The Ministry of Finance should take the lead by providing assistance to municipalities in developing policy for the collection of unpaid Provincial Offences Act fines in the province.

Recommendation 18-11: Use licence and registration suspensions as a tool to facilitate the collection of Provincial Offences Act fines related to vehicles, including parking, speeding and automobile insurance violations.

Recommendation 18-12: Allow fines to be added via the property tax roll by adding Provincial Offences Act fines to the offender’s property tax bill, even if the property is jointly owned.

Recommendation 18-13: Offset tax refunds against unpaid Provincial Offences Act fines.

Recommendation 18-14: Require that recipients of government grants or refundable tax credits, contracts, loans and loan guarantees are first in good standing with the government in terms of accounts receivable and have no outstanding taxes due before providing assistance.

Recommendation 18-15: Require that all ministries record Crown debt receivables in the enterprise financial system so that collection action can be commenced in a timely fashion.

Recommendation 18-16: Proceed with the 2011 Ontario Budget proposals by moving to rationalize the collection of non-tax revenue between Ontario Shared Services and the Ministry of Finance with the intent to consolidate, in a staged fashion, all non-tax and tax collection functions into the Ministry of Finance.

Recommendation 18-17: Develop a legislative framework to provide the Ministry of Finance with the authority to collect all provincial Crown debts and incorporate more effective collections tools and mechanisms.

Recommendation 18-18: Develop standard policies and practices across the Ontario Public Service for collections to ensure the optimum return for dollars spent.

Recommendation 18-19: Work with the Office of the Information and Privacy Commissioner of Ontario to ensure the protection of privacy in the implementation of these proposals.

Recommendation 18-20: Improve methods for information gathering and sharing across government, including making greater use of the Regulatory Modernization Act, in order to identify emerging and current issues to improve responsiveness in a compliance environment.

Recommendation 18-21: Use the Ministry of Finance’s risk assessment technology to better focus enterprise-wide audit activity on areas where rates of return are highest for the province.

Recommendation 18-22: Implement measures to better co-ordinate and consolidate government audits of companies within the Ministry of Finance to recover funds on behalf of the province.

Recommendation 18-23: Develop risk assessment approaches with other jurisdictions to help address audit issues that cross provincial and international boundaries.

Recommendation 18-24: Instead of user fees remaining in fixed nominal terms, they should be updated using a blend of full cost recovery and indexation and be phased in over the next two years.

Recommendation 18-25: Conduct a review of education tax rate-setting policies for residential and business tax rates to maintain a stable level of education tax revenues in real terms.

Recommendation 18-26: Continue to implement the business education tax ( BET ) reduction plan while considering options for adjusting the plan in order to avoid part or all of the revenue loss associated with reducing high BET rates by also increasing low BET rates.

Recommendation 18-27: Build on the existing business education tax ( BET ) reduction plan to address historical BET rate inequities and distortions by gradually implementing a single uniform BET rate.

Recommendation 18-28: Further develop and implement results-focused strategies to deter illegal tobacco, including enforcing existing laws and developing new partnerships and legislative and regulatory tools.

Recommendation 18-29: Replace taxes tied to a good’s volume with taxes tied to the good’s value (i.e., replace specific taxes with ad valorem taxes or otherwise capture changes in values).

Chapter 19: Liability Management

Recommendation 19-1: General risks can and should be handled through the contingency reserve, which should be set higher than in recent budgets and should grow over time to address the possibility of growth rate biases in the revenue projection. Modest internal risks should be addressed through an operating reserve. The contingency reserve should be increased to cover a 0.2 percentage point annual overestimate of revenue growth.

Recommendation 19-2: Specific risks should be addressed through an explicit strategy. Care should be taken in budget-setting processes to diligently identify any known risks of significant fiscal magnitude, and a strategy developed to mitigate those risks.

Recommendation 19-3: We recommend that the province either terminate the Pension Benefits Guarantee Fund or explore the possibility of transferring it to a private insurer. The Fund is no longer sustainable in its current form as it presents a large fiscal risk for the province in the event of another economic downturn.

Recommendation 19-4: The Ontario government should conduct and publish its own liability management assessment of the public-sector pension plans and develop plans to contain any fiscal risks identified.

Recommendation 19-5: Clarify who bears the ultimate financial responsibility for funding deficits of the public-sector pension plans as the Commission encountered considerable confusion on this issue.

Recommendation 19-6: In the proposed liability management assessment report, the government should make public the current and prospective financial health of public-sector pension plans.

Recommendation 19-7: In the liability management assessment report, the government should test the fiscal health of the plans against the possibility of rates of return being higher or lower than assumed. This could be done using a higher or lower discount rate, or could rely on a probability distribution.

Recommendation 19-8: The government’s objective, when faced with pension funding deficits, should be to reduce prospective benefits rather than increase the contribution rate beyond current levels. This would help to close the funding gap and reduce the accrual of pension benefits on a prospective basis, mitigating the impact on the fiscal plan. The government may need to consider legislative options, should negotiations with plan sponsors be unsuccessful.

Recommendation 19-9: The government should accelerate work on the design of public-sector benefits and make containing the growth in the cost of benefits part of the broader public-sector compensation negotiation strategy.

Recommendation 19-10: The province should examine opportunities to achieve savings and better investment returns through the consolidation of the administrative functions and investment pooling of pension plans across the broader public sector.

Recommendation 19-11: The province must make the government’s cost of the public-sector pension plans — both in concept and in magnitude — much clearer in the Public Accounts and other financial statements, including the Budget.

Recommendation 19-12: To better protect the province against the costs of environmental cleanup, adjust the current legislative framework so that more focus is placed on the polluter-pays principle.

Recommendation 19-13: Work with the federal government to mitigate risks to the Ontario fiscal framework from federal policy changes. Known risks at the time include the Canada–European Union Free Trade Agreement being negotiated, proposed changes to personal income taxes and the federal omnibus crime bill (Bill C-10).

Recommendation 19-14: Ontario should negotiate with the federal government to commit to a housing framework for Canada that includes adequate, stable, long-term federal funding and encourages its housing partners and stakeholders, including municipal governments, to work with the federal government to secure this commitment.

Recommendation 19-15: Work with the municipal sector to mitigate risks to the Ontario fiscal framework by ensuring that commitments are adhered to. Known risks at this time include potential overruns in municipal infrastructure and the Pan Am Games.

Recommendation 19-16: Modify or eliminate the Taxpayer Protection Act so that both spending and taxes can be used as required to address threats to fiscal sustainability.

Chapter 20: Intergovernmental Relations

Recommendation 20-1: Establish an understanding with the federal government that actions taken at the federal level pose fiscal risks to Ontario.

Recommendation 20-2: Advocate strongly for reforming federal programs that are not working effectively in Ontario’s interests.

Recommendation 20-3: Advocate for reforms to Equalization by, at a minimum, fully capturing resource revenues and accommodating differing price levels between provinces.

Recommendation 20-4: Simultaneously eliminate the Canada Social Transfer and transfer the equivalent tax points to the provinces.

Recommendation 20-5: Advocate for federal greenhouse gas mitigation programs to provide fair and equitable support for Ontario’s clean energy initiatives.

Recommendation 20-6: Sort out areas of responsibility with the federal government where there is overlap and duplication and establish a more efficient economic and fiscal relationship that saves money and provides better services to citizens.

Recommendation 20-7: Extend the period of the final $500 million of upload by another two years, so it is not complete until 2020. For illustration, if we reach 2015’s $232 million by 2017, that would save $165 million ($397 million minus $232 million).

Recommendation 20-8: Ensure that, beginning in 2013, the Ontario Municipal Partnership Fund ( OMPF ) declines to the planned $500 million by 2016. A reasonable assumption would be a $25 million decrease in each of the next four years beginning in 2013, resulting in a $500 million OMPF envelope in 2016.

Recommendation 20-9: The province and municipalities must work together to establish an accountability framework that would track how municipalities are investing the benefits realized as a result of the uploads.