Ontario seeks to cut pay for family doctors, but MDs dispute claim they make too much for too little work

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The provincial government wants to claw back how much it pays thousands of Ontario family doctors and force them to put in longer hours, arguing they are averaging $400,000-plus annually for what amounts to part-time work.

Doctors are up in arms over the proposals and charge that the government has got it wrong when it comes to their workload. They warn if they are hit with another pay cut — on top of one imposed four years ago as well as an ongoing compensation freeze — patients will pay the price because family physicians will be driven from the field.

Dr. Tara Kiran, vice chair of quality and innovation in the Department of Family and Community Medicine at the University of Toronto, said she worries deep cuts being proposed by the province will make if difficult for patients to find family doctors.
Dr. Tara Kiran, vice chair of quality and innovation in the Department of Family and Community Medicine at the University of Toronto, said she worries deep cuts being proposed by the province will make if difficult for patients to find family doctors.  (Rene Johnston / Toronto Star)

“I’m worried that the deep cuts being proposed will make it near impossible for people to find a family doctor, and that will have repercussions for the whole health system,” family doctor Tara Kiran, vice chair of quality and innovation in the Department of Family and Community Medicine at the University of Toronto, wrote in an email.

The two sides have been arguing their cases before a board of arbitration, which completed seven months of hearings Sunday. The Ontario Medical Association contends the government has built its case upon faulty findings by the provincial auditor.

The arbitration board is tasked with resolving an almost-five-year-old contract dispute between the government and the OMA, which represents the province’s 31,000 practising physicians.

Read more:

Province eyeing creation of ‘super health agency,’ sources say

Schism within government on how to deal with the Ontario Medical Association puts premier and health minister at odds

MDs question motives, results of vote by specialists trying to break away from OMA

The government’s proposed changes to family medicine (also known as primary care) are among the most controversial issues the board has been asked to weigh in on as part of its deliberations over the size of the physician services budget. Ontario now spends more than $12 billion — or 10 per cent of the entire provincial budget — on doctors.

The three-member board is expected to come down with binding decisions this spring, ending phase 1 of the arbitration process.

Phase 2, expected to be even more contentious, will address how to divvy up the pot of money among some 35 specialty groups.

All of this is happening at the same time the province is undertaking a massive restructuring of the entire health system. Next week, the government is expected to announce the creation of a new “super health agency” to replace more than 20 smaller agencies. Sources say the super agency will oversee primary care.

The 5,300-plus family doctors facing the prospect of pay cuts comprise about half of Ontario’s roughly 11,000 practising primary care doctors. They work in more than 800 group practices across the province, known as “family health organizations,” or FHOs.

FHOs were developed in 2007 to improve primary care — for example, by increasing access through after-hours availability — largely through changing financial incentives for doctors.

Twelve years later, the government argues it has paid for improvements in care, which have not materialized and that the price is too high to expand this model further.

In the past, family doctors were paid mostly through fee-for-service, which saw them reimbursed for every service rendered. There is an inherent incentive in the fee-for-service model to have high-volume practices; the more services provided, the more money made.

But under FHOs, doctors derive the bulk of their income through “capitation,” a form of compensation that reimburses them a set amount for each patient signed up with them — no matter how many times a patient is seen or even if a patient is not seen. The amount varies according to a patient’s age and health.

Three-person board of arbitration tasked with resolving OMA contract dispute: Ron Pink, OMA nominee, left, Bill Kaplan, board chair, centre, and Kevin Smith, health ministry nominee.
Three-person board of arbitration tasked with resolving OMA contract dispute: Ron Pink, OMA nominee, left, Bill Kaplan, board chair, centre, and Kevin Smith, health ministry nominee.  (Rene Johnston/Toronto Star)

In 2016/17, the average FHO doctor (with 1,300 patients) made $406,390, according to the government’s written submission to the arbitration panel. That compares to $214,015 for a family doctor paid fee-for-service.

(Physician compensation is not the same as income. From their compensation, FHO doctors have to pay for overhead costs such as staff salaries and rent. Arrangements vary from practice to practice, with the health ministry, hospitals and local communities also pitching in for non-physician expenses.)

Some fee-for-service family doctors and specialists have even taken to social media to argue that their FHO peers are paid too much.

The government’s submission states that FHOs have become so popular, the number of doctors working in them has surged by 154 per cent since 2008/09. To contain costs, the ministry says it was forced to limit their growth starting in 2012.

The government is now seeking to cut the pay of FHO doctors by an average of 9 per cent each, or about $33,600. That would be on top of a cut of 2.65 per cent the province imposed in 2015, as well as a compensation freeze in place since 2012.

In making its case, the government relies heavily on the 2016 provincial auditor’s report, which states that FHOs have not proven their worth. FHO doctors were paid $522 million more in 2014/15 than they would have received if they were paid fee-for-service, according to the report.

That was, in part, because they were paid for 1.8 million patients rostered with them, even though they did not actually see those patients, the auditor wrote.

“The $522 million is significant, as it indicates that the physicians were not providing core primary care services as often as they should be (or expected to be) and/or that base capitation payments are excessive,” the report reads.

The auditor found that an average FHO doctor works only 3.4 days per week.

The province made significant investments in FHOs, but “most objectives (were) not met,” wrote the auditor, charging that they failed to increase access to care, quality and continuity of care and cost effectiveness.

FHOs have not delivered on commitments to provide after-hours care, the auditor said, adding they have also not done much to shorten wait times for primary care.

Many patients get their primary care elsewhere, including walk-in clinics, other family doctors and hospital emergency departments, meaning the province is paying twice for these patients to be treated, according to the report.

The auditor concluded by urging the province to review how much it pays these doctors to ensure taxpayers are getting good value for money.

In addition to seeking pay cuts, the province wants more work and accountability from FHO doctors. The government wants the average physician to put in a 36-hour work week.

“It’s a very expensive model to deliver primary care physician services and it is not performing optimally,” government negotiating team member Bob Bass told the arbitration board on a recent hearing day. “From the government’s perspective, significant change is required to both moderate the costs and improve the quality.”

But the OMA says the government has built its case on bad information from the auditor who failed to understand how they work.

OMA lawyer Howard Goldblatt said the government is more intent on prescribing or dictating a solution without really diagnosing the problem.
OMA lawyer Howard Goldblatt said the government is more intent on prescribing or dictating a solution without really diagnosing the problem.  (Supplied photo)

“It was done by accountants, not by doctors,” OMA lawyer Howard Goldblatt told the arbitration panel, referring to the auditor’s report.

“The government is more intent on prescribing or dictating a solution without really diagnosing the problem,” he continued.

The OMA wants the government to join it in studying FHOs so that any decisions taken are based on what it contends is accurate information.

The auditor erred by calculating the workload of FHO doctors based on the number of patient visits, the OMA charges.

It stands to reason many patients would have fewer appointments, given one reason for creating FHOs was to move doctors away from high-volume, fee-for-service practices, the OMA argues. Financial incentives were changed to encourage doctors to deal with multiple conditions in a single visit rather than call patients back for multiple visits.

(Depending on the doctor, those working in fee-for-service family practices may also deal with multiple conditions in a single visit.)

The auditor also failed to take into account the fact FHO doctors are more likely to communicate with patients via email and phone since their pay is no longer based on face-to-face visits, the OMA adds.

Then there is all the paperwork that comes with working in a FHO, noted Kiran who practices out of one in downtown Toronto. Because FHOs provide full-service family medicine, there is much administrative work associated with appointments, tests and referrals, she explained, adding that FHO doctors also spend time communicating with other providers in a patient’s circle of care.

“This work is what can lead to burnout and frustration, and is not accounted for in the government’s proposals,” she wrote in her email.

Kiran and the OMA warn the proposed changes to family medicine will drive doctors back to practising high-volume, fee-for-service medicine.

“Family doctors would be forced to see a ludicrously high volume of patients in-person each day,” she said. “For patients, this would likely mean shorter appointments, less flexibility to bring up multiple problems in a single visit, and less flexibility to call or email your doctor about an issue.”

The OMA points out another reason for introducing FHOs was to address past shortages of family doctors by making family medicine more attractive. The proposed changes threaten to turn back the clock on those gains, doctors argue.

In a written brief submitted to the arbitration panel, the OMA used strong language to warn of dire consequences if the arbitrators and government get it wrong:

The ministry’s proposals have “the potential to cause huge destabilization in primary care … The very real risk to patient quality of care and provider well-being cannot be ignored.”

Theresa Boyle is a Toronto-based reporter covering health. Follow her on Twitter: @theresaboyle

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First Nations lobby Ottawa for a bigger cut of the multibillion-dollar gambling business

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First Nations leaders want to carve out a bigger slice of Canada’s multibillion-dollar gambling pie, and they are asking the Liberal government to change the Criminal Code to pave the way for more Indigenous-owned casinos.

While about 16 First Nations casinos are already operating in Canada, the Assembly of First Nations, the group that represents more than 600 chiefs from across the country, hopes to significantly boost that number by removing parts of the Criminal Code that have largely kept Indigenous peoples on the margins of the gaming industry.

Section 207 of the code essentially prohibits casinos on Indigenous lands unless they are sanctioned by the province. First Nations leaders want to build more casinos, seeing the gambling industry as a road to prosperity for impoverished communities with few natural resources.

« It’s all about recognizing and respecting First Nations jurisdiction. We’re pushing. We have to make this one of the items on all party platforms: respecting First Nations jurisdiction. It’s about creating really good paying jobs for all people, not just First Nations peoples — and it’s another avenue to creating economic stability, » Perry Bellegarde, national chief of the Assembly of First Nations, ​said in an interview with CBC News.

« Gaming has a huge impact on the economy. There is only one economy, and First Nations people have got to be part of that economy in a meaningful and substantive way, and this is just one of the pieces in the puzzle. Looking at Criminal Code amendments just makes good economic sense. »

But a spokesperson for Justice Minister David Lametti said the government is not considering such a  repeal « at this time. »

Bellegarde is pushing the federal government to amend the Criminal Code to make it easier for First Nations to build casinos. But the government says it ‘is not considering a repeal at this time.’ (CBC)

A 1985 agreement between Ottawa and the provinces devolved much of the regulatory authority over gambling operations to provincial governments. First Nations depend on the provinces to issue licences so any sort of gaming establishment can operate legally under federal law.

And, because gambling has the potential to be so lucrative, the provinces have been reluctant to cede jurisdiction for fear new First Nations properties could cannibalize existing facilities. A tweak to federal law could give Indigenous peoples a leg up in their dealings with the provinces.

Provincially owned gaming parlours have been a tremendous boon to government coffers. In Ontario alone, casinos generate about $1 billion a year in revenue.

Casino Rama, a casino and resort on the reserve land of the Chippewas of Rama First Nation in Orillia, Ont., is jointly owned by the band and the Ontario Lottery and Gaming Commission. It is one of largest Indigenous-owned casinos in Canada. (CBC)

In Manitoba, the group that represents chiefs is locked in a legal battle with the province over the right to build a casino in downtown Winnipeg.

Two Crown-owned casinos in that city have flourished while provincial leaders have restricted First Nations casinos to more isolated, rural regions where returns are modest.

Even in Alberta and Saskatchewan, where the bulk of the country’s First Nations-owned casinos are located, operators must hand over a significant portion of their profits to the provincial governments as a condition of their licences.

‘There may be more negatives’

This arrangement has prompted one Indigenous gaming expert to equate the current financial relationship with usury.

« It’s a usury fee in many ways. The provinces essentially said, ‘If you want casinos, you’re going to have to pay.’ It’s a fee for operations that’s stripping millions and millions from the communities that the gaming program was initially designed to help, » Yale Belanger, a professor of political science at the University of Lethbridge, said in an interview.

« It’s exploitative. »

Belanger said more gaming opportunities would be financial shot in the arm for some Indigenous communities — especially urban reserves — but he warned it is likely these operations are not « the economic panacea that First Nations leaders are anticipating that they could be become. »

« At the end of the day there may be more negatives confronting First Nations who choose to open casinos — based on social and political tensions — than what they’ll realize economically by doing so, » Belanger said.

An expansion of gaming could lead to a proliferation of gambling addictions among vulnerable and already impoverished people, for example.

Regardless, Bellegarde wants Ottawa to recognize that First Nations peoples have the right to regulate what happens on their lands — and that right should naturally extend to economic development efforts like building casinos.

Bellegarde hopes First Nations across the country can replicate the financial success of Indigenous casinos in his home province, Saskatchewan, where annual profits routinely exceed $80 million a year and up to 2,000 people have regular employment.

In the last 10 years, the six casinos run by the Saskatchewan Indian Gaming Authority have made nearly $1 billion in profits. Half of those funds have been distributed to individual Indigenous communities. The remaining funds go to the province and local economic development agencies.

The Dakota Dunes Casino is located on land belonging to the Whitecap Dakota First Nation south of Saskatoon. The six First Nations-owned casinos in Saskatchewan have generated nearly $1 billion in profits for First Nations communities and the province in the last decade. (Madeline Kotzer/CBC)

But a spokesperson for Justice Minister David Lametti said the government does not support the legislative changes Bellegarde is seeking.

« With respect to Section 207 of the Criminal Code, our government is not considering a repeal at this time; however, our government will continue to engage with Indigenous partners on how to address their concerns and support economic opportunities, » Célia Canon said in a statement.

U.S. Indigenous gaming is big business

The Indigenous gaming industry in Canada lags significantly behind operations in the U.S. American Indian groups have built gaming empires that rival mainstream operators like Las Vegas-based MGM Resorts.

A series of rulings from the U.S. Supreme Court in the 1980s gave tribal governments significant leeway to pursue economic development, including building and operating casinos.

Congress has since sought to regulate that activity through the National Indian Gaming Commission, but gaming is pervasive on reservations.

The Foxwoods Resorts Casino, the largest in the U.S., rises over the landscape in Ledyard, Conn. The Mashantucket Pequot Tribal Nation owns the casino. (Jessica Hill/Associated Press)

The industry has exploded since the early days of the Foxwoods Resort in Connecticut — not far from New York and Boston — which introduced Vegas-style table games like blackjack and roulette in the 1990s.

There are 460 gambling operations run by 240 tribes generating annual revenue of $27 billion, according to data from the National Indian Gaming Commission.

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Ford government’s tuition cut to cost universities $360 million and colleges $80 million

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Universities and colleges will take an estimated $440 million hit under the Ontario government’s planned 10 per cent tuition decrease — and it remains unclear if the province will make up the difference.

The tuition announcement, expected Thursday from Merrilee Fullerton, minister of training, colleges and universities, will cut and then freeze tuition rates for the next two years, a $360 million loss for universities alone. For colleges, the amount is about $80 million.

Merrilee Fullerton, Ontario’s minister of training, colleges and universities, speaks at a news conference outlining the province’s plan for social assistance reform on Nov. 22, 2018. Fullerton is set to cut post-secondary tuition by 10 per cent.
Merrilee Fullerton, Ontario’s minister of training, colleges and universities, speaks at a news conference outlining the province’s plan for social assistance reform on Nov. 22, 2018. Fullerton is set to cut post-secondary tuition by 10 per cent.  (Andrew Francis Wallace / Toronto Star)

The government is also expected to make changes to the OSAP student aid system, which under the previous Liberal government provided “free tuition” for 230,000 post-secondary students.

“Students will pay for this with larger classes and fewer professors,” said New Democrat MPP Chris Glover, a former Toronto public school board trustee and York University professor, calling it a “smoke and mirrors exercise.”

“Are they going to cut OSAP grants?” added the Spadina-Fort York MPP. “Any benefits students may get from this announcement — students will end up the losers on this.”

According to government documents obtained by the Star, the province will make changes to the Tuition Free Framework, slashing rates by 10 per cent — or about $340 a year for college students, and $660 for those in universities — for this fall, and keep that rate for the 2020-1 school year.

The documents from the Ministry of Training, Colleges and Universities say the changes will “protect students and provide a financially predictable environment” and “keep more money” in students’ pockets.

Current university tuition for undergraduate students is almost $9,000 a year.

Green Party Leader Mike Schreiner said he wants to be “optimistic that lower tuition fees will support students, but the jury is still out” and is worried about it being “an excuse for cuts to student aid or college and university budgets.”

He said “until the government announces all of its changes, we won’t know if this is yet another instance of (Premier Doug Ford) offering a shiny penny to distract from deeper cuts.”

Glover said Ontario’s post-secondary system have the lowest funding levels of all provinces and wonders about the impact on low-income students.

In her report last December, Ontario’s auditor general said the cost of the free-tuition plan would soon hit $2 billion a year, or 50 per cent higher than estimated.

Bonnie Lysyk also said there was no follow-up to ensure that the program, which provides non-repayable grants to qualifying students, was actually boosting the number of low-income students in the province’s colleges and universities. She also said there was no way to ensure that mature students receiving the grants were actually needy.

Students leaders and post-secondary institutions were waiting for more details on the Ford government’s plans before commenting.

However Gyllian Phillips, president of the Ontario Confederation of University Faculty Associations, called it “quite concerning that an announcement of this magnitude is occurring without the government consulting any stakeholders at Ontario’s universities or colleges.”

She said while “reducing tuition fees is good public policy for increasing access to post-secondary education … any reduction must be matched with an equivalent increase in public funding.”

Kristin Rushowy is a Toronto-based reporter covering Ontario politics. Follow her on Twitter: @krushowy

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Hike, cut or stand pat? Bank of Canada decides on interest rates today

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The Bank of Canada isn’t expected to change its benchmark interest rate when it reveals its latest decision Wednesday, but that doesn’t mean the bank’s policy-makers think nothing has changed in the country’s economy.

The bank’s rate, known as the target for the overnight rate, is the interest rate it charges retail banks for short-term loans, and it filters down into the rate that Canadian borrowers and savers get on savings accounts, lines of credit and variable rate mortgages.

The central bank will announce its latest rate decision at 10 a.m. ET. CBC News will have live coverage of the decision and a press conference that follows shortly after that.

In October, when the bank last raised its rate to its current level of 1.75 per cent, the central bank justified its decision by noting the various ways in which the economy was humming along. Inflation was on the high end of the range that the bank likes to see in setting monetary policy, and the job market was chugging along.

The price of a barrel of crude had fallen from its highs, but West Texas Intermediate was still trading north of $65 a barrel, and business investment was rounding into form, too. Add it all up, and the economy was on track to grow by about 2.1 per cent this year — enough to justify a modest tinkering of the bank’s rate to more normal levels.

But that was then, and this is now.

Canada’s economy has since shown enough signs of weakness that there’s speculation a cut may be coming sooner or later, and at a bare minimum economists who cover the central bank are downgrading their expectations of just how many hikes may be on the way.

On Tuesday, new numbers from Statistics Canada showed that Canada’s trade deficit doubled to $2.1 billion in November, largely because oil prices plummeted, eating into the export side of the ledger.

And according to Scotiabank economist Derek Holt, « the window on trade conditions will get cloudier yet, » as the U.S. government shutdown potentially affects December trade data and Alberta’s production cuts take down energy exports in January.

If there’s reason for optimism, Holt says, it’s that the slowdown comes on the heels of a « torrid » pace for Canadian exports earlier in the year, so some declines were to be expected. « One issue I’d like to hear the [Bank of Canada] address tomorrow is the extent to which they feel the recent data is due to … pulled forward export demand, » he said. 

Economist Avery Shenfeld with CIBC says the bank is in a tough spot, threading the needle between incorporating lowered expectations, and staying well clear of suggesting a cut might be required.

« We see the tone of the statement being along the lines of ‘we’ll get back to you later,’ rather than ‘we’re all done here, people’ in terms of further interest rate tightening, » Shenfeld said, adding that he expects the bank to stay on the sidelines until April at the earliest.

That’s a similar timeline to the one Robert Dent at Japanese investment bank Nomura Securities Inc. predicts, with a slight hike to two per cent in April followed by another cautious one at the end of the year.

Dent notes that despite some dark clouds on the horizon, Canada’s economy is doing well on a number of other fronts, notably the job market, where the jobless rate dropped to the lowest level on record in November at 5.6 per cent, and even managed to stay there through December, too.

Those data points will be factors the bank will consider, and a reason for the Bank of Canada to stay on the track it has already set for itself.

« The December statement suggests policy-makers remain confident that further rate hikes will be needed, » he said, but « the effect of rising interest rates on overly indebted households, persistently lower crude oil prices and slowing global growth all pose downside risks to the Bank of Canada outlook that may start to be acknowledged more forcefully at the January meeting. »

Bank of Montreal economist Benjamin Reitzes says with the picture looking cloudy, the bank is clearly going to err on the side of caution, but the question is, how much?

« Outside of a couple of decent domestic data points, » he said, « the policy backdrop has deteriorated, driven largely by global economic and financial conditions. Accordingly, expect more caution from Governor Poloz and the Bank to stay on the sidelines for at least the next couple of months. »

While all but one of the 18 economists tracked by Bloomberg think doing nothing is the likeliest outcome, traders in investments known as overnight index swaps think there’s about a one in six chance of a rate cut on Wednesday.

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Sask. film industry seven years after the provincial tax credit cut

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It was almost seven-years ago when the Saskatchewan Film Tax Credit was axed, an industry that once saw multi-million dollar movies made now is barely hanging on.

“We’re not gone, we’re just smaller,” ACTRA Saskatchewan Union Branch Representative Mike Burns said.

“We certainly are productive and we are still creative, and the industry is funded by Creative Saskatchewan which does a good job with the resources that they have. Unfortunately, resources they have are under what required to attract larger productions here.”

The province’s Creative Sask. gives the film industry two million dollars through grants.  A study commissioned by the Saskatchewan Chamber of Commerce and Sask Film that was done in 2012 said the industry generated $44.5 million in economic spinoffs and created about 850 jobs when the tax credit was available.

READ MORE: Chamber says Saskatchewan film tax cut kicked industry out at the knees

“We do continue to see activity in the province although it has declined, some film producers have chosen not to film in Saskatchewan, but overall we have not seen an impact in our provincial economy when it comes to that,” Ministry of Parks, Culture and Sports Dep. Asst. Minister of Stewardship Candace Caswell said.

“In Manitoba, they had a $220 million in business in 2018, in Alberta, almost $300 million, this isn’t small business this a big business,” Burns said.

While the industry still sees independent and low budget films using what Saskatchewan has to offer, Burns hopes to see bigger budget films make their way back to the province.

It would take a plot twist in this year’s provincial budget, which the premier has already said it’s going to be tight.

“We think eventually there will be a bigger and better film industry here again,” Burns said.

© 2018 Global News, a division of Corus Entertainment Inc.

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Specialized programs cut by province were ‘working well,’ teachers in Ontario say

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Teachers in Ontario are speaking out against a provincial government cut in funding for specialized school programs, saying the move was done without proper research and consultation and will affect marginalized students.

Many of the programs on the chopping block were « working well, » according to Liz Stuart, president of Ontario English Catholic Teachers’ Association. The association has nearly 45,000 members who work at publicly funded Ontario English Catholic schools. 

« There is no doubt that these cuts will negatively affect students and classrooms, especially given the government’s decision to implement them midway through the school year, » Stuart said in a statement released on Monday.

The Doug Ford government announced in a memo to school boards on Friday that it is cutting $25 million to a fund known as the Education Programs — Other (EPO). The cut affects 11 grants administered through the fund, which is separate from general operating money.

Cut sends ‘worrying signal’

The elementary and secondary school programs that will lose all funding or have their funding reduced include supports for mental health, Indigenous education initiatives and anti-poverty programs. They were developed to address priorities determined by the government as well as by teachers, parents and students.

Liz Stuart, president of Ontario English Catholic Teachers’ Association, says the cut will have a negative impact on the well-being and achievement of students. (CBC News)

Stuart said the cut sends a « worrying signal » about the government’s approach to education. The Ontario education ministry finished consulting the public about education on Saturday, but it announced the cut on Friday, before the consultation was completed, she noted.

« It is unfortunate that the government did not take the time to properly consult with teachers and others in the education community, who could have told them the impact these cuts are bound to have on student well-being and achievement, » she said. 

Decision ‘extremely rash and callous’

Sam Hammond, president of the Elementary Teachers’ Federation of Ontario, which has 83,000 members who work at Ontario public elementary schools, agreed, saying the decision was « extremely rash and callous. »

Hammond said the union is opposed to the cuts because the programs were key to students who needed additional help.

« These cuts will affect students on a number of different levels, » Hammond said on Monday. « Most of the programs being cut are vital extension programs for marginalized and vulnerable students. It’s going to take away those additional supports that those students have. »

Sam Hammond, president of the Elementary Teachers’ Federation of Ontario, says the decision to cut was ‘extremely rash and callous.’ (Grant Linton/CBC)

He dismissed a claim by the government that the EPO has been wasteful. « The government has pointed to mismanagement of funds. I find that hard to believe, » he said.

« I don’t believe for one minute that the research that needed to be done on these programs has been done. We think that the decisions have been made in haste. »

Hammond said he sat across from Education Minister Lisa Thompson at a meeting a week ago and she did not « in any way » indicate that the cut was coming. He said the way it was communicated is « disturbing. »

Cut to affect only 2018-2019 school year, province says

According to Kayla Iafelice, press secretary for Thompson, the EPO cut will only affect the 2018-2019 school year.

« As you know, we’ve recently wrapped up our education consultations and once that data is analyzed and reviewed, we will be looking at these programs again to see what supports can be put in place to support a revised curriculum, » Iafelice said in an email on Monday.

A spokesperson for Education Minister Lisa Thompson, pictured here, has said the fund « has a long track record of wasteful spending, » though she provided no examples. (Chris Young/Canadian Press)

Iafelice said, for the 2018-2019 fiscal year, EPO transfer payments will total $400 million to third-party organizations and school boards. The amount represents a $25-million reduction over allocations made in the previous fiscal year.

« Additionally, despite any reductions, it’s important to highlight that $400 million dollars in funding has gone out the door to some great innovative programs that provide direct support to students in the classrooms, » she said.

In an email to CBC Toronto on Sunday, Iafelice had said: « … this fund has a long track record of wasteful spending, overspending and millions of dollars of unfunded commitments. »

The EPO accounts for one per cent of the total annual revenue that school boards receive and the money is intended to help supplement general operating funds, she added.

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Allstate tried to cut off auto insurance sales to drivers in Brampton, lawsuit claims

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An Ontario woman is taking one of the province’s biggest insurance providers to court, alleging she was fired for pushing back on the company’s « discriminatory » effort to stop selling plans to drivers who live in Brampton. 

« It’s just wrong. There is no other word for it, » said Medha Joshi. « I said it was wrong, and I was reprimanded for it. »

Late last month, Joshi and her legal counsel, Andrew Monkhouse, filed a suit in Ontario’s Superior Court against Allstate Insurance Canada. Until October, Joshi held the position of agency manager at the company, where she presided over a sales team working out of Allstate’s Milton location.

She was initially hired by Allstate in 2012, though she left for number of months in 2014 to live in the U.K. 

Joshi says that in the late summer, after returning to work from a medical leave for treatment of a number of health conditions diagnosed several months earlier, she learned of an unwritten managerial directive to stop offering auto insurance policies to residents of Brampton. 

« It was very clearly said, in so many words, that there is a lot of fraud that happens in Brampton. That there is a very high number of claims and a very high number of fraudulent claims, » she said in an interview from her home in Rockwood, Ont., near Guelph. 

The explanation did not add up to Joshi. As a veteran in the industry, she had previously worked in downtown Toronto, Kingston and Brampton, before ending up in Milton.

« People are people. There was nothing that walked in through the door in Brampton that was different than any place else, » she said. 

It was clear, she alleges, that the directive targeted visible minorities.

« We know the community that resides in Brampton, and they are visible minorities, » Joshi said. 

The all-comers rule

Relatively high auto insurance are a perennial political issue in Brampton. According to insurance comparison site Kanetix.ca, drivers in the city regularly pay higher premiums for their policies than surrounding jurisdictions. In 2017, for example, Brampton drivers paid 70 per cent more per month for their insurance than the provincial average. 

And it is true that insurance companies have the prerogative to charge varying premiums for people of different ages and genders. However, increases and decreases to insurance premiums are regulated by the Financial Services Commission of Ontario (FISCO) — a company cannot unilaterally change rates. 

But what Allstate was trying to do was different, according to Joshi and Monkhouse. 

Insurance companies operating in Ontario follow what is known as « the all-comers rule. » If an applicant meets a set of criteria laid out by providers and approved by FISCO, they cannot be denied insurance, regardless of where they live or their ethnic background. 

Lawyer Andrew Monkhouse said the case could encourage individual residents in Brampton to launch their own human rights complaints against Allstate Insurance Canada. (Michael Cole/CBC)

« I think it is wrong to be so brazenly biased toward an entire community, » Joshi said. « I didn’t know how, in good faith, to go deliver this direction to my team, to deliver this message that I couldn’t stand behind. »

Those above her in the company made a point not to write any of the new policy down, she alleges. The harder she pushed to get clarification, or to have a manager put into words how the policy should be communicated to staff, the more isolated she became, Joshi said.

« I could not seem to get meetings with my manager, I could not seem to have weekly discussions with my manager. He ‘wasn’t available.’ He wouldn’t respond to emails. »

‘I also needed my benefits’

She admits that despite her own reservations about the alleged decision to cut off new policies in Brampton, she did try to compromise with her superiors. 

« While I was having conversations, I also needed my benefits. I also needed my company, my organization, to support me in my time of need. And not for a second did I think I would be penalized in such a manner. »

Finally, at what was supposed to be a routine meeting with her manager, her job was terminated. Joshi alleges she never received any prior warnings and that she was given no possible recourse after the fact.

Allstate claimed that she had taken part in an underhanded effort to have another employee transferred to a different location — an allegation that Joshi denies. 

She and Monkhouse are seeking some $600,000 in total damages from Allstate for wrongful dismissal and violations of the Ontario Human Rights Code. 

Allstate Insurance Canada did not respond to CBC Toronto’s request for comment. The company has, however, indicated to the court that it intends to mount a defence. Monkhouse said he expects Allstate to file a statement of defence, laying out its case against Joshi early in the new year. 

Monkhouse said the case would lead individual Brampton residents to launch their own human rights complaints against Allstate. 

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Tories cut cultural funding, revamp tribunals in scramble for savings

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The belts are being tightened at Queen’s Park.

Premier Doug Ford’s Progressive Conservatives are reviewing the future funding of a slew of government programs — including the Indigenous Culture Fund that was the province’s response to the Truth and Reconciliation Commission.

The fund, which supports First Nations, Inuit and Métis community-based cultural projects, was part of $250 million in programs the former Liberal government announced after the searing 2015 examination of residential schools.

“Our government is reviewing the Indigenous Culture Fund (ICF) to ensure that taxpayer dollars are being used responsibly and efficiently. Individuals who have already received grants through the ICF will not be affected during this review,” the government said in a statement Friday.

Sources told the Star the government is also slashing $15 million from the Ontario Trillium Foundation’s $120 million budget, which annually helps 700 community programs across the province.

“This change represents the first phase of the government’s review of tribunals accountable to the Ministry of the Attorney General to ensure that programs are effective, affordable and sustainable,” the memo said.

“It is intended to promote consistency in tribunal practices, procedures, decision-making and dispute resolution, while also providing a simplified and more accessible public interface.”

Attorney General Caroline Mulroney’s office said it is “taking action to improve access to justice and to make practical, reasonable and responsible decisions that respect taxpayers.”

“Tribunals Ontario will be led by a single executive chair, allowing for more co-ordinated and efficient leadership. Adjudicative tribunals play an important role in our justice system by providing a venue for the adjudication of numerous types of disputes,” Mulroney’s office said.

The changes come as the Ford’s government is coping with credit downgrade by Moody’s, the first for Ontario from the New York-based ratings company in six years.

While Finance Minister Vic Fedeli blamed “the recklessness of the previous Liberal government” for the setback, Moody’s suggested the new government bears some responsibility.

“Financing requirements for deficits and capital expenditures will result in an increase in the province’s already elevated net direct and indirect debt level,” the firm said, pointing to looming revenue shortfalls due to tax cuts.

“Recent actions undertaken by the province have included measures that reduce revenue levels, adding to budgetary pressure.”

Fedeli said the deficit is $14.5 billion, while the financial accountability officer maintains it is at least $1.2 billion lower.

The Tories have revised accounting methods and no longer count $11 billion in joint-sponsored public pensions as assets, which is worth anywhere between $1 billion and $5 billion to the annual bottom line.

Cindy Veinot, the provincial controller, resigned as the government’s top accountant in September after refusing to sign the public accounts because she felt the deficit was inflated.

NDP MPP Sandy Shaw said Moody’s downgrading of Ontario’s credit rating to Aa3 from Aa2 is due to both the Liberals and the Tories.

“The Liberal government let us down, but this credit rating is forward-looking, which means Doug Ford is now making things even worse,” said Shaw (Hamilton West-Ancaster-Dundas).

The government also quietly axed funding for the College of Midwives of Ontario, which had been waiting for the money since April 1.

“This means that the funding we had anticipated for the current fiscal year will not be received,” the college said in an update on its website. “We received this news on Nov. 8, 2018, eight months into our fiscal year.”

The college, which regulates the profession, has been receiving government grants from the health ministry for 25 years, and had been waiting for $705,553 in funding this year.

Green Party Leader Mike Schreiner called the decision “short-sighted and reactionary … the long-term financial costs and reduced health care services will far outweigh any ‘savings’ the government hopes to gain.”

In October, the government also cut all funding to the OPHEA, a non-profit resource and training organization for phys-ed teachers. It had received funding for the past 16 years. The organization was a key player in supporting the implementation of the updated sex-ed curriculum, which was scrapped by the Ford government.

Robert Benzie is the Star’s Queen’s Park bureau chief and a reporter covering Ontario politics. Follow him on Twitter: @robertbenzie

Kristin Rushowy is a Toronto-based reporter covering Ontario politics. Follow her on Twitter: @krushowy

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Who are the winners and losers from the Alberta oil production cut?

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Oil production cuts announced by the Alberta government will have the desired outcome of reducing steep discounts on its oil, but it will also create winners and losers, financial analysts say.

Shares in the companies most likely to benefit from the move to curtail crude production from larger producers starting Jan. 1 soared Monday as the price differential for heavy oilsands bitumen-blend fell.

READ MORE: Rachel Notley says Alberta is ‘essentially giving oil away for free’ in Toronto speech

Meanwhile, shares in oil producers who had been either benefiting or insulated from the discount prices stayed put or subsided.

“There are going to be a number of producers who will shoulder the brunt of the Alberta government’s 325,000 barrels per day in mandated production curtailments of raw crude and bitumen (namely the oilsands producers), but the broader health of the province is likely to benefit over the medium term from the decision as a result of narrowing differentials and stronger royalty revenue,” said a report from Calgary-based AltaCorp Capital.

Alberta Premier Rachel Notley announced Sunday the province will require producers with more than 10,000 barrels per day of output to cut production by about 8.7 per cent until there is enough shipping space on pipelines to improve prices, expected to take three months.

READ MORE: Alberta orders 8.7 per cent oil production cut to help deal with low prices

After that, the reduction will be lowered to 95,000 bpd through the rest of 2019.

In early trading Monday, Cenovus Energy Inc. rose as much as 13 per cent over its Friday close to $11.11, while Canadian Natural Resources Ltd. rose as much as 16 per cent to $38.74.

READ MORE: Shares in Cenovus, CNRL soar on news of Alberta crude production cuts

Cenovus CEO Alex Pourbaix was the first oilsands CEO to call for the province to curtail production. On Sunday both Cenovus and Canadian Natural issued statements of support for the Alberta move, as did Chinese-owned oilsands producer CNOOC-Nexen.

Canada’s largest oil and gas company, Suncor Energy Inc., said Monday its estimate of the impact of the provincial cuts will be provided when it issues its 2019 capital and production guidance.

“Suncor believes the market is the most effective means to balance supply and demand and normalize differentials,” it said. It has said it is insulated from price discounts because of its Canadian refineries and pipeline contracts.

In mid-day trading, Suncor was down 1.5 per cent while fellow Calgary-based companies that both produce and refine oil, Imperial Oil Ltd. and Husky Energy Inc., were off 4.1 per cent and 0.8 per cent, respectively.

READ MORE: Suncor assessing impact of Alberta’s move to cut oil production 8.7% next year

The winners from the curtailments will include the provincial government (which estimates it will earn $1.1 billion more from royalties in the 2019-20 fiscal year); energy producers in B.C. and Saskatchewan, who will benefit from better prices without having to cut production; condensate producers, as that light oil isn’t included in the curtailment; and junior energy producers who are exempt from the program, AltaCorp said in its report.

The losers include integrated producers who will likely pay more for their refining feedstock and companies that had intended to grow their production in the first half of 2019, it said.

Of the 378 operators with active oil production in Alberta in October, only 25 produce more than 10,000 bpd, AltaCorp noted.

WATCH BELOW: Ian Lee with Carleton University on premier Rachel Notley’s announcement that her province is cutting oil production due to the ongoing oil pricing crisis.






Oilfield service companies are also on the losing side of the equation, said GMP FirstEnergy in a note, because drilling budgets will likely shrink in early 2019.

Companies that previously reduced output voluntarily will receive credit under the Alberta plan.

Analysts said that means the market is already halfway to the provincial goal as estimates suggest about 150,000 bpd has already been shut in, mainly by Cenovus and Canadian Natural.

“Anecdotally, this will likely be a messy process with collateral damage (reservoir management, abandonments, take-or-pay overhang),” said a report from National Bank of Canada analysts.

READ MORE: Canadian oil price discounts costing economy billions of dollars

The discount between Western Canadian Select bitumen-blend oil and New York-traded West Texas Intermediate was about US$21 per barrel on Monday morning, an improvement of about US$7 per barrel from Friday, according to Net Energy. WTI was up almost US$2 per barrel.

“We estimate oil prices need to average only US$2.50 per barrel higher to offset the cash flow impact of the mandated production cut,” said senior analyst Jennifer Rowland of Edward Jones Equity Research in a note.

READ MORE: Maximize existing pipelines’ efficiency to help with oil glut, federal minister says

The cuts will hit the larger Canadian economy, according to BMO Capital Markets, which estimates gross domestic product will drop by more than two per cent on an annualized basis in the first quarter of 2019.

“The expected rebound in production later in the year should contain the full-year 2019 GDP impact and potentially lift 2020 slightly, depending on timing,” it added, adjusting its national growth forecast for 2019 to 1.8 per cent from 2.0 per cent.

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Alberta premier announces 8.7% oil production cut to increase prices

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Alberta Premier Rachel Notley has announced a temporary 8.7 per cent oil production cut, or decrease of 325,000 barrels a day, in the production of raw crude oil and bitumen starting Jan. 1, 2019.

In an announcement Sunday evening, Notley said the daily cuts will remain in place until the 35 million barrels of processed oil currently in storage is shipped to market, likely by the spring.

The reduction will drop to an average of 95,000 barrels a day until curtailment ends at the end of 2019, when Enbridge’s new Line 3 pipeline starts operating.

The Alberta government also expects to acquire locomotives and rail cars by the end of next year to transport 120,000 barrels a day.

Notley said the decision to impose mandatory curtailments was difficult, but necessary. 

« In Alberta we believe that markets are the best way to set prices, but when markets aren’t working, when companies are forced to sell our resources for pennies on the dollar, then we have a responsibility to act, » Notley said, adding the government has « a responsibility to defend our province and to defend our resources. »

Smaller companies not affected

The cuts will affect about 25 larger bitumen and conventional producers. Larger producers will see their first 10,000 barrels exempted each day. Companies that produce less than 10,000 barrels a day will not be affected by the daily cuts.

Notley’s announcement is aimed at addressing the difference in the price of Western Canadian Select oil relative to the benchmark West Texas Intermediate (WTI). That gap hit around $50 in late October due to a lack of pipeline capacity to get Alberta oil to market.

Watch as Premier Rachel Notley explains why she believes production cuts are necessary:

Alberta Premier Rachel Notley answers questions from reporters following announcement of a temporary oil production cut in the province. 1:11

The government estimates Alberta is losing $80 million a day due to this discount. The measures are expected to narrow the gap by $4 US a barrel and contribute an additional $1.1 billion to the Alberta treasury by the fiscal year ending in 2020. 

Alberta’s energy minister has power under existing legislation to set the curtailment amounts through a monthly ministerial order. Notley says the effect of the cuts will be measured each month to ensure production is not reduced any more than necessary.  

The government said it believed industry would not voluntarily make the cuts after sending three envoys to talk to small and large producers.

Industry divided

The split in industry opinion was revealed in the reaction that immediately followed Notley’s announcement.

Cenovus Energy asked the Alberta government last month to make mandatory production cuts. Unsurprisingly, the company sent a news release Sunday night supporting Notley’s actions.

« At Cenovus, we advocated for this mandatory production cut because we continue to believe it is the only short-term solution to the extraordinary situation Alberta find itself in, » said Cenovus CEO and president Alex Pourbaix in a statement.

While support for temporary mandatory cuts is not unanimous among Alberta oil and gas companies, « acknowledgement of the severity of the crisis facing our industry was, » Pourbaix said.

Imperial Oil remained firmly against the curtailment measures. CEO Rich Kruger said in a statement the company « respectfully disagreed » with the government’s decision as it may carry unintended consequences. 

« This intervention appears not to recognize the investment decisions companies have made to access higher value markets, » Kruger said in the statement. « Imperial has increased its take-away ability by securing contractual capacity in existing pipelines and by investing in extensive rail infrastructure that allows the company to reach higher value markets, to the benefit of all Albertans. »

Opposition reaction

Jason Kenney, leader of the United Conservative Party, Alberta’s official opposition, supported Notley’s announcement. but blamed the federal government for putting the province in the difficult position.

While Kenney initially supported cuts only if they were voluntary, he called last week for a mandatory cut of 10 per cent, or about 400,000 barrels a day, based on what he said he heard from stakeholders. Kenney said he is fine with the government’s numbers, as long as cuts reach the goal of reducing the differential. The price gap was $28.50 US a barrel when markets closed on Friday.

« If this does not adequately clear out the glut by the end of January, beginning of February 2019, then the government may have to go into deeper production cuts, » he said, adding he would support such action if it’s required. 

Any change in the price of oil has profound effects on Alberta’s resource-dependent economy.

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