Manitoba Committee Hansard — 25 May 2004 (Legislative Affairs Committee, Sitting 05, 38th Legislature, 2nd Session)

38-2-la05

Manitoba — Debates (Hansard)

Second Session - Thirty-Eighth Legislature of the Legislative Assembly of Manitoba Standing Committee on Legislative Affairs Chairperson Mr. Daryl Reid Constituency of Transcona Vol. LV No. 5 - 6:30 p.m., Tuesday, May 25, 2004 ISSN 1708-668X

MANITOBA LEGISLATIVE ASSEMBLY Thirty-Eighth Legislature Member Constituency Political Affiliation AGLUGUB, Cris The Maples N.D.P. ALLAN, Nancy, Hon. St. Vital N.D.P. ALTEMEYER, Rob Wolseley N.D.P. ASHTON, Steve, Hon. Thom pson N.D.P. BJORNSON, Peter, Hon. Gimli N.D.P. BRICK, Marilyn St. Norbert N.D.P. CALDWELL, Drew Brandon East N.D.P. CHOMIAK, Dave, Hon. Kildonan N.D.P. CUMMINGS, Glen Ste. Rose P.C. DERKACH, Leonard Russell P.C. DEWAR, Gregory Selkirk N.D.P. DOER, Gary, Hon. Concordia N.D.P. DRIEDGER, Myrna Charleswood P.C. DYCK, Peter Pembina P.C. EICHLER, Ralph Lakeside P.C.

FAURSCHOU, David Portage la Prairie P.C. GERRARD, Jon, Hon. River Heights Lib. GOERTZEN, Kelvin Steinbach P.C. HAWRANIK, Gerald Lac du Bonnet P.C. HICKES, George, Hon. Point Douglas N.D.P. IRVIN-ROSS, Kerri Fort Garry N.D.P. JENNISSEN, Gerard Flin Flon N.D.P. JHA, Bidhu Radisson N.D.P. KORZENIOWSKI, Bonnie St. James N.D.P. LAMOUREUX, Kevin Inkster Lib. LATHLIN, Oscar, Hon. The Pas N.D.P. LEMIEUX, Ron, Hon. La Verendrye N.D.P. LOEWEN, John Fort Whyte P.C. MACKINTOSH, Gord, Hon. St. Johns N.D.P. MAGUIRE, Larry Arthur-Virden P.C. MALOWAY, Jim Elmwood N.D.P. MARTINDALE, Doug Burrows N.D.P. McGIFFORD, Diane, Hon.

Lord Roberts N.D.P. MELNICK, Christine, Hon Riel N.D.P. VACANT Minto MITCHELSON, Bonnie River East P.C. MURRAY, Stuart Kirkfield Park P.C. NEVAKSHONOFF, Tom Interlake N.D.P. OSWALD, Theresa Seine River N.D.P. PENNER, Jack Emerson P.C. REID, Daryl Transcona N.D.P. REIMER, Jack Southdale P.C. ROBINSON, Eric, Hon. Rupertsland N.D.P. ROCAN, Denis Carman P.C. RONDEAU, Jim, Hon. Assiniboia N.D.P. ROWAT, Leanne Minnedosa P.C. SALE, Tim, Hon. Fort Rouge N.D.P. SANTOS, Conrad Wellington N.D.P. SCHELLENBERG, Harry Rossmere N.D.P. SCHULER, Ron Springfield P.C. SELINGER, Greg, Hon. St. Boniface N.D.P. SMITH, Scott, Hon.

Brandon West N.D.P. STEFANSON, Heather Tuxedo P.C. STRUTHERS, Stan, Hon. Dauphin-Roblin N.D.P. TAILLIEU, Mavis Morris P.C. VACANT Turtle Mountain WOWCHUK, Rosann, Hon. Swan River N.D.P.

137 LEGISLATIVE ASSEMBLY OF MANITOBA THE STANDING COMMITTEE ON LEGISLATIVE AFFAIRS Tuesday, May 25, 2004 TIME – 6:30 p.m. LOCATION – Winnipeg, Manitoba C HAIRPERSON – Mr. Daryl Reid (Transcona) VICE-CHAIRPERSON – Ms. Kerri Irvin-Ross Fort Garry) ( ATTENDANCE - 11 – QUORUM - 6 Members of the Committee present: Hon. Messrs. Lemieux, Robinson, Selinger Messrs. Cummings, Faurschou, Mses. Irvin- Ross, Korzeniowski, Messrs. Maguire, Martindale, Reid, Mrs. Taillieu Substitutions: Mr. Penner for Mrs. Taillieu Mr. Nevakshonoff for Ms. Korzeniowski APPEARING: Mr. Kevin Lamoureux, MLA for Inkster Mr.

Leonard Derkach, MLA for Russell WITNESSES Bill 12–The Highways and Transportation Amendment and Highway Traffic Amendment ct (Trucking Productivity Improvement Fund) A Mr. David Rolfe, President, Keystone Agricultural Producers Mr. Michael Martel, Director, Forest Industry Association of Manitoba Mr. Bob Dolyniuk, Manitoba Trucking Association Mr.Chris Lorenc, President, Manitoba Heavy Construction Association Bill 24–The Travel Manitoba Act Mr. Jim Baker, President and Chief Executive Officer, Manitoba Hotel Association Mr. Max Johnson, Co-Chair, Ministerial Advisory Council on Tourism Mr.

Jim Carr, Business Council of Manitoba MATTERS UNDER CONSIDERATION: Bill 5–The Manitoba Public Insurance Corporation Amendment Act (Claimant Advisers) Bill 12–The Highways and Transportation Amendment and Highway Traffic Amendment Act (Trucking Productivity Improvement Fund) Bill 24–The Travel Manitoba Act *** Mr. Chairperson: Good evening, everyone. Will the Standing Committee on Legislative Affairs please come to order. Our first orde r of business is to fill a vacancy in the position of committee Vice- Chairperson. Are there are any nominations for this position? Mr. Doug Marti ndale (Burrows): I nominate Ms.

Irvin-Ross. Mr. Chairperson: Are there any further nominations? Seeing no further nominations, Ms. Irvin-Ross is elected Vice-Chair of this committee. Committee Substitutions Mr. Chairperson: Now dealing with committee substitutions, my understanding is there are a number of substitutions. Mr. Glen Cummings (Ste. Rose): With the leave of the committee I would like to make the following membership substitution and effective immediately for the Standing Committee on Legislative Affairs, the Member for Emerson (Mr. Penner) for the Member for Morris (Mrs. Taillieu). Mr. Chairperson: Mr.

Cummings has indicated the Member for Emerson will be substituting for the Member for Morris. Is that agreed? [Agreed] Ms. Kerri Irvin-Ross (Fort Garry): With the unanimous consent of the committee, I would like to make the following membership substitution

138 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2004 effective immediately for the Standing Committee on Legislative Affairs, the Me mber for Interlake (Mr. Nevakshonoff) for the Member for St. James (Ms. Korzeniowski). Mr. Chairperson: It has been moved by Ms. Irvin- Ross that the Member for Interlake substitute for the Member for St. James. Is that agreed? [Agreed] * * * Mr.

Chairperson: This meeting has been called to consider the following bills: Bill 5, The Manitoba Public Insurance Corporation Amendment Act (Claimant Advisers); Bill 12, The Highways and Transportation Amendment and Highway Traffic Amendment Act (Trucking Productivity Improve- ment Fund); and Bill 24, The Travel Manitoba Act.

We have a number of presenters registered to speak this evening, as follows: Bill 12, Bob Dolyniuk, Manitoba Trucking Association; Chris Lorenc, President of Manitoba Heavy Construction Association; David Rolfe, Keystone Agricultural Producers; and Michael Martel, Forest Industry Association of Manitoba. For Bill 24, we have Jim Carr, Business Council of Manitoba, and Jim Baker, Manitoba Hotel Association. If there are any other members of the public wishing to make a presentation here this evening, if they could see the Clerk at the back of the committee room, we will add their names to the list.

For the information of all presenters, 20 copies of any written versions of presentations are required. If you need help with photocopying please speak to our staff. As well, I would like to inform presenters that in accordance with our rules a time limit of 10 minutes has been allotted for the presentations, with another 5 minutes allowed for questions from committee members. Also, in accordance with our rules, if a presenter is not in attendance, when their name is called, they will be dropped to the bottom of the list.

If the presenter is not in attendance when their name is called a second time, they will be removed from the presenters' list. I would also like to inform all in attendance of the provisions in our rules regarding the hour of adjournment. Except by unanimous consent, the standing committee meeting to consider a bill in the evening must not sit past midnight to hear presentations unless fewer than 20 presenters are registered to speak to all bills being considered when the committee meets at 6:30 p.m.

As of 6:30 this evening, there were 6 persons registered to speak to these bills; therefore, in accordance with our rules of this committee, this committee may sit past midnight to hear presentations. On the topic of determining the order of public presentations, I will note that we do have two out-of- town presenters in attendance, marked with an asterisk on the list. In what order does the committee wish to hear presentations? It has been suggested that we hear out-of-town presenters first.

Is that the will of the committee? [Agreed] Just prior to proceeding with the public presentations, I would like to advise members of the public regarding the process for questions from committee members on your presentation. The proceedings of our committee meetings are recorded in order to provide a verbatim transcript. Each time someone wishes to speak, whether it be an MLA or a presenter, the Chair, myself , must first recognize the individual to make sure th at person is recorded in Hansard.

This is a signal fo r the Hansard recorder to turn on and off the microphones for the individual presenters or committee members. For this reason, the Chairperson would need to recognize you, your name, prior to speaking. I offer that as information for all in attendance here this evening. I thank you for your patience and understanding. We will now proceed to public presentations. * (18:40) Bill 12–The Highways and Transportation Amendment and Highway Traffic Amendment Act Mr. Chairperson: I will now call on Bob Dolyniuk– oh, pardon me, out-of-town presenters, David Rolfe. Thank you, Mr.

Rolfe, for your patience. You may proceed. Mr. David Rolfe (President, Keystone Agricultural Producers): Thank you, Mr. Chair. First off, I would like to introduce myself. My name is David Rolfe. I am president of Keystone

May 25, 2004 LEGISLATIVE ASSEMBLY OF MANITOBA 139 Agricultural Producers. Keystone Agricultural Producers is the largest farm policy organization in Manitoba. On behalf of Keystone Agricultural Producers, I am pleased to share our organization's position with respect to Bill 12, The Highways and Transportation Amendment and Highway Traffic Amendment Act (Trucking Productivity Improvement Fund). KAP is a democratically controlled general farm policy organization representing and promoting the interests of agricultural producers in Manitoba. It is an organization run and funded by its members throughout Manitoba.

The Trucking Productivity Improvement Fund will help pay highway repairs required, as well as improvements to highways. As an organization representing farmers who frequently use highways for movement of goods, we do realize the importance of upgrading and maintenance of roadways. We do, however, have some concerns with this piece of legislation and the potential of unnecessary financial impact on the agricultural industry. This fund allows for collection of permitting fees and fines in relation to overweight and oversized vehicles by the Province.

The money taken in through this fund should be allocated for the maintenance and repairs of roadways where it is actually collected, not allocated to other roadways in various parts of the province. As well, the provincial government must not use this fund to offset its contribution to other programs, such as the Prairie Grain Roads Program. We need assurance that highway classes will not be decreased by government so that more permits will have to be obtained for carrying the same load. Clause 34.1(3) outlines the method in which payments will be made to the Trucking Productivity Improvement Fund. In

section 1 of this clause, it states: "Contributions made by private sector contributors, or other governments, by arrangement or agreement with the Government of Manitoba in relation to rehabilitating or improving specific highways or portions of highways, or specific highway infrastructure." This could be perceived as an avenue to introduce toll roads and, if so, this is of great concern. We need assu rance that this is not the intention of this clause. Clause 68 deals with offences as it relates to excess weight less than 2000 kilograms and excess weight of 2000 kilograms or more, as well as penalties.

If the purpose of this bill is to lessen and/or pay for road damage, then the Manitoba government should reconsider the overweight fines. The govern- ment should remove the gross vehicle overweight fines and apply the fines only to individual axle overweight. The last point we would like to make is dealing with clause 87.1. We believe it should be removed. This clause allows the Province to require a permit to cross a highway. The Province should allow movement along and crossing of highways, but there should not be a charge for doing so.

In closing, we would like to stress that farmers must not in any way be put at an unfair disadvantage as a result of this bill. As we stated in the introduction, we do agree with the ongoing main- tenance and repairs of our highway infrastructure and hope that our points are given due consideration. Thank you. Mr. Chairperson: Thank you, Mr. Rolfe, for your presentation. Do members of the committee have questions for the presenter? Mr. Larry Maguire (Arthur-Virden): Yes, thank you very much for your presentation, Mr. Rolfe. I note with interest your comments around this bill.

I am wondering if you could give us any insight into how you see these fund packages being set up for each individual road, and what your view might be as to setting up this plethora of categories for road maintenance. I do not think anybody is against road maintenance, as you have pointed out very clearly, but there has been some concern expressed about how government would manage establishing these funds and targetting them toward a particular road. Mr. Rolfe: Certainly, we realize the need for highway improvements and we have some concerns. I can give one example, Highway 5 between Glenboro and Carberry.

There is a stretch of highway on there that has been restricted and you require a permit. As we all know, that is one of the main trucking routes to the potato plant at Carberry, to Carnations. We have some concerns over just a

140 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2004 portion of that highway being restricted that essentially restricts the whole highway. Now, I guess the question related to how the fund should be structured and set up. Well, in the presentation, we made it fairly clear that any monies collected under the permitting system for one particular stretch of highway should be allocated to that stretch of highway and not just moved into a general fund for highway maintenance and construc- tion anywhere in the province.

If funds are being collected on that stretch of highway, then funds should be attributed to that stretch of highway so it can be repaired and rebuilt. That is exactly what the permitting system is designed to do. Mr. Maguire: Thank you, Mr. Rolfe. I also have a question around if a fund was established for a particular

section of road, do you believe that there should be any kind of a limit placed upon that particular road for fines? I mean, it is not just fines in this case. It is permit fees and voluntary private-sector support for that particular piece of road that could be, say, a processing company that wants an approach or some kind of means established in that regard. Would you feel that there should be some kind of a limit for the level at which the total amount of fines collected would be established at and any funds over and above that would go to general revenue?

I heard you say that the funds should not be used for general revenue purposes, but would you be in favour of any kind of a limit on each particular road being capped at a certain, say, maybe it is a quarter of a million dollars, maybe it is $10,000? I am not suggesting a number, but would you be in favour of any kind of a cap being established for each particular road in that area? Mr. Rolfe: When it comes to fines and permit fees, we would hope there would be a standardized formula across the province. Mr. Jack Penner (Emerson): Well, thank you very much, Mr. Chairperson. Mr.

Rolfe, you have indicated that you would recommend that the designated fines in a given area be designated to a given stretch of road that the fines were obtained on. This is the first time, I believe, that a government has introduced a designated fines repair fund in the province. I have never seen anything like this before and I am a bit surprised. My biggest fear is that the government of the day might, in fact, reduce the weight limits, as you have suggested they should not, and increase the fines.

I only go back to the spring when many of the roads in our area were reduced to less than half of their normal weight-carrying capacity and people had to move product off their farms and into the marketplace because much of the marketplace these days is on a defined schedule, in other words, on- time delivery. I think many of the small industries that have been built over the past decade or the previous to past decade under the previous government are such that export a large amount of their product into the export market and again on an on-time basis.

Would it be your view that this government might have taken a look at increasing the funding toward highways and highways repair and the upgrading of highways under the auspices of the Grain Roads Program, which is farmers' money in the first place that was taken out of the cap under the Crow benefit and designated to this which provinces now participate in? Should they, the Province, contribute a greater share instead of designating these fines to repairing highways? * (18:50) Mr. Rolfe: There are two points there.

One is the use of lower weights on highways as, and I hate to say this, a revenue tool, and we have one fear there that it may be used that way and we talked about toll roads. I hope that this legislation is not designed to be a back door to toll roads within the province and that it would not be used that way. In relationship to the provincial government's contribution to the Grain Ro ads Program, we said in our presentation that any monies collected under this should not be used to offset the Province's con- tribution to the Grain Roads Program.

We would hope that, considering the amount of product that is now moving by road, more resources would be allocated to rebuilding the highways and not relying strictly on this Trucking Productivity Improvement Fund. On the previous question, Mr. Maguire's question relating to the caps on the fund, should the

May 25, 2004 LEGISLATIVE ASSEMBLY OF MANITOBA 141 fund be capped off at–and I think he used the example of $250,000–we would hope that the amount of money that would be collected under this fund on one particular stretch of highway would not be more than was needed to rebuild the highway or would not be more than the trucking industry or producers' share of what th e cost would be to rebuild that portion of highway. As was referred to before, in some cases it is already farmers' money that is being used, especially in the Gr ain Roads Program.

It has been used more than once because the contribution that municipalities make, rural municipalities for the most part, is funded from and produces municipal taxes on that land. So we are paying, I guess if you stretch it out, we are paying more than once for that stretch of highway and now we are being asked to pay again. So it is three times in some cases. Mr. Penner: My biggest fear in this is that the minister's intent might be to set up inspection places close to an industry in rural Manitoba and use the fines to upgrade a specific stretch of road.

I simply cannot envision how a government would attempt to put forward this kind of legislation that would even leave the perception that they are thinking along those lines. Secondly, in my constituency five years prior to this government being elected, there was $41 million spent in a five-year period on upgrading of roads and this government has not spent one dollar on upgrad- ing even a mile of road in that same constituency. I think, clearly, the agenda of this government is being put on the line.

Can you tell me what sort of an alternate program should be put in place other than this kind of legislation to keep our roads operable for the agricultural community in rural Manitoba? Mr. Rolfe: I think, too, you are hinting again at the possibility of setting up restricted sections of highway leading to processing plants that indirectly could be used as toll roads. I have seen that example on Highway 5 where most of the product moves up to the Carnation plant, the Midwest plant there at Carberry.

Again, we need more provincial resources put into highway construction and not just simply a system of fines and tolls. It penalizes our industry. It penalizes agriculture because not only are farm trucks moving up and down there but there is an increasing number of farm products that move by truck since the demise of the railways. It seems that agriculture always is being targeted as paying its unfair share. There is more than agricultural products move along the highways. Unfortunately, it seems to be agriculture that gets targeted more often than not. Mr.

Kevin Lamoureux (Inkster): Just a very quick question, Mr. Rolfe. In your presentation, you state the Province should allow movement along and crossing of highways but there should not be a charge for doing so and then cited concern with regard to clause 87. Are we talking farm machinery, as a general rule anything affiliated with the farms, and that is where your concer n is and, if so, is there any indication that that, in fact, would be the case? Mr. Rolfe: Under the legislation, it appears that the Province would want to charge for trucks crossing sections of highway.

It may only be simply across an intersection, at least that is the way the legislation appears to read. There may be cases where a producer or a commercial truck, for example, has to cross, a mile of highway to get from one

section of highway to another, and we are saying in that case where there are only short stretches of highway involved, maybe a mile, mile and a half, to get to the next road, the next stretch of unrestricted highway, that in those cases permits should not be charged. Hon. Ron Lemieux (Minister of Transportation and Government Services): I want to take the opportunity to thank Mr. Rolfe for giving his presentation.

Keystone Agricultural Producers is a respected organization that we respect very much as a government and any suggestions that they have we certainly consider at any time those presentations are made to us. So I just want to take this opportunity to thank Mr. Rolfe for his presentation. Thank you. Mr. Chairperson: Thank you, Mr. Rolfe. The next presenter on our list is Michael Martel. Is he in the audience? My understanding, Mr. Martel, is that you have a verbal presentation to make? Thank you. You may proceed when you are ready. Mr.

Michael Martel (Dir ector, Forest Industry Association of Manitoba): Thank you, Mr. Chairman, members of government and committee members. My name is Michael Martel and I am here as a director of the Forest Industry Association of Manitoba. The Forest Industry Association of Manitoba, or FIAM, represents various small, large, and medium-sized timber producers in the province

142 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2004 extending from The Pas down to the American border, companies spread out throughout the province in small towns, largely in the small towns, small mid-size towns of the province. I would like to also say I am vice-president of Tembec in Pine Falls, the paper mill there, and have had some experience with productivity permit process during the last two years where we were given the privilege of being a pilot project for the program.

Although originally coming from Manitoba, I also spent 12 years in Sa skatchewan working in the forestry sector and at th at time saw the birth of a similar process, or a program there, what they called the Highways Partnership Program involving industral users, where industrial users were given opportunity to increase th e weights on the highway infrastructure, given that they were going to pay some of the incremental damage that was created through that program. I am here, really, to say one thing, and that is that the industry association is in support of this bill and we have three reasons.

The first is, we are in a very highly competitive environment. Our industry, we compete nationally, internationally, and certainly within North America for paper products, for solid wood products coming out of our various manu- facturing centres. And, as was previously mentioned, we are very much about delivering a product to market as it is required, which is 365 days of the year. When we are moving products to our facilities, however, we find that we are under significant restrictions in terms of moving timber to places like Pine Falls and The Pas and Swan River.

What we see is that the bill as introduced provides an opportunity to even the playing field in terms of our ability to deliver products to our facilities, to move beyond simply the winter season and extending that further out to 12 months of the year, or at least 8, 9 months of the year. So for us that is a benefit and it makes us a little more competitive with our neighbours, in particular Saskatchewan and Ontario. Secondly, we like the notion of partnership where we are working with the department of high- ways.

Our experience over the last two years has shown that it has been a partnership in working with them, looking at the rates and looking at the traffic flows and what the pavement damage can be. It is not just a one-way feedback; it has been two-way feedback, and we think that within any government department that is very positive. Third, we like the idea that fees get put back into the road system where the traffic occurs. To us, this is key.

In the case of Highway 304 north from Pine Falls up towards Manigotagan, we have seen the rates change and fluctuate with the exact estimate of what the incremental pavement damage will be. We are not here to talk about the specific improvements that could be made to the bill. We will leave that to others within the department. We are encouraged by this bill and we are pleased to be able to speak here today. Mr. Chair: Thank you, Mr. Martel, for your presentation. Are there questions for the presenter? Mr. Maguire : Thank you very much, Mr.

Martel, for your presentation, and you certainly do represent an industry that has many heavy loads to move in Manitoba and we respect the contribution that, certainly, the forestry industry makes to the gross domestic product of the province. I would, however, like to ask a question, and one of the concerns that I did not ask before was in relation to looking at fees going into roads. I know other provinces have partnershipped in some of these areas before, so this is not inventing the wheel here.

I think that I find a difference between fines and permits as opposed to private investment, private players wanting to have a sharing of costs in relation to a particular

section of road that you refer to. Would you see any distinction in those? The distinction is between private investment, which is the third

section of one of the three parts that the government can get revenue from in the Trucking Productivity Improvement Fund. It can come from, of course, fines and then permit fees, and of course, private-sector investment. I see quite a difference, is my point, between private-sector investment and a build-up of fines and permits which may not be as negotiable in relation to a particular

section of road. Can you just comment on that? * (19:00)

May 25, 2004 LEGISLATIVE ASSEMBLY OF MANITOBA 143 Mr. Martel: Yes, I can, and I am going to have to speak as an employee of Tembec Industries as opposed to the industry association in this regard. What I can say is that my two years of being in Manitoba, certainly, were very challenged in terms of meeting the needs of all Manitobans for education, social programs, health, and our highways infra- structure. I think if we are going to move forward, some form of partnerships have to be in place.

Now, if that means, for example, at Tembec, where we propose to build a sawmill, we fully anticipate that there will be some engagement in terms of infrastructure when we embark in that way. However, we do believe that it is on the onus of the Province to provide a basic level of infrastructure for all Manitobans, industry included. In terms of fines paid for violation of the highway regulations, my view is, you break the law and that money is going to go somewhere. I do not really have a position that that should go back into the road system. We are there in our industry to obey all the rules and regulations.

How the department uses those fees that the Province sets out, that is for them to decide. In terms of setting rates for incremental pavement damage, clearly we want to see that direc- ted to the road. Mr. David Faurschou (P ortage la Prairie): We appreciate the position and the larger perspective that you have, coming from Saskatchewan, as well.

I know this bill putting forward a separate fund here, it is not that we do not trust the Finance Minister here this evening to reinvest all the dollars from there, but it is something that I want to ask you as to how the government of Saskatchewan treats the participation in this type of legislation as it pertains to business transactions. The penalties that are assessed as fines are obviously under current legislation in Manitoba not effectively recognized as a deductible expense,

whereas a permit for overweight, oversize is a deductible expense. How then does Saskatchewan treat an actual direct investment? Is it a capitalized expenditure by the corporation and amortized over a number of years? How does the tax department treat that type of investment? Mr. Martel: In the case that I am familiar with in Saskatchewan, it was a capital investment. You were allowed to treat that as any capital investment in normal accounting rules for a capital road, 20 years, I believe it was.

In terms of the way the partnership program worked there, there was a separate account that was set up, that was co-managed by industry and the department, where you had to have agreement in terms of how the monies were used. A certain portion of that money was used for research to improve the road system. So it could be in looking at ways of engineering roads or it could be looked at in new configurations for trucking. Mr. Faurschou: Do you have any consideration that this fund is managed by the minister without that advisory body that you suggest is in operation in Saskatchewan? Mr.

Martel: I think this is a very good first step. I think that that could be a natural evolution, but at this time I think, given the amount of work that has gone into it and the amount of experience we have garnered over the last two years, that this is a good first step. Mr. Penner: It is good to see you here, Mr. Martel. As you know, the southeast part of the province is fairly involved in the forestry industry, which is my constituency as well. Many of the people that I know haul logs out of the bush and into delivery areas and/or directly to market.

It is very difficult for them to be able to weigh every load or determine exactly what the weight of a load will be. Can you see this being applied in an equitable manner or fair manner that would not penalize forestry operators for lo ading without weighing in the bush and taking that load directly to market? If an overweight did occur, do you think there should be some leeway given there? How should this be applied? Mr. Martel: I believe there should be leeway in terms of looking at penalties with individual operators. A lot of that falls onto education and experience of the officers involved.

But at the end of the day, the carrier is responsible for the weight on his truck. It is his job to understand that and to be in compliance. Now, saying that, there are errors that occur with every individual and every walk of life. That comes back to the experience and officers using common sense in terms of how they apply the penalties. I think there could be some movement in

144 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2004 that regard, but certainly in our area that is not a significant concern. Mr. Lemieux: Thank you very much, Mr. Martel, for your presentation. I appreciate your comments very much and your support with regard of this piece of legislation. We look forward to it moving ahead. Thank you for taking the time to present to us and give us your views today on behalf of your organization. Thank you. Mr. Chairperson: Thank you, Mr. Martel. The next presenter we have on our list is Bob Dolyniuk. Is Mr. Dolyniuk in the audience? Good evening, Mr. Dolyniuk.

Do you have a written presentation? Mr. Robert Dolyniuk (Manitoba Trucking Association): Yes, I do, Mr. Chairman. Mr. Chairperson: You may proceed when you are ready, Mr. Dolyniuk. Mr. Dolyniuk: Good evening, Mr. Chairman, ministers, committee members. The Manitoba Trucking Association is an industry association representing truck transportation companies in Manitoba and we are pleased to present our com- ments on Bill 12, specifically the Truck Productivity Improvement Fund. The truck transportation industry generates about 1.18 billion of Manitoba's GDP on an annual basis.

It directly and indirectly employs 33 000 Manitobans, expending about $655 million in salaries and benefits annually. Manitoba is home to approximately 12 of Canada's largest companies of which 2 are amongst the top 10 for size in Canada. From 1993 to 2003 Manitoba's trade with the U.S. has increased from 6.1 billion to 16.1 billion. Approximately 80 percent of the merchandise trade with the U.S. is shipped by truck. That translates into over 350 000 trucks crossing the Manitoba/U.S. border each year.

While Manitoba has enjoyed a prominent place in the Canadian trucking industry, it should be noted that in 1994 Manitoba was home to 5.1 percent of the Canadian commercial driver population and in 2002 Manitoba represented only 4.1 percent, which indicates a 20% reduction. The trucking industry plays a vital and vibrant role in the economies of Manitoba and Canada. Our industry is not only the dominant mode of freight transportation in Manitoba, Canada and North America it is also a major generator of economic activity within Manitoba.

To put this in better perspective, 90 percent of all consumer products and foodstuffs in Canada are shipped by truck and 95 percent of goods moved within Manitoba depend on trucks. Trucking is a demand-derived industry. The level of economic activity in the truck transportation industry is directly related to the economic well- being of the businesses it se rvices in every region in Manitoba and throughout North America.

Con- versely, the economic well-being of the businesses our industry serves is dependent in part on well-built, well-maintained, efficient and reliable transportation systems which include our roadways and highways. We must be cognizant that there are numerous communities within our province that are solely dependent on truck transportation for its trans- portation needs. To be able to serve these and other communities our industry needs a well-built and well-maintained road network. In Manitoba, our road network has been deteriorating for many, many years.

Successive governments have not invested adequately into our highway infrastructure. Today we are faced with the decaying and deteriorating highway system that is quickly reaching the end of its life cycle. Growth in Manitoba's trucking transportation industry is the result in part of deregulation and NAFTA. Additionally, we have witnessed the demise of the Crow rate, rail-line abandonment, the transition from small local grain elevators to widely dispersed high-throughput grain elevators and a general restructuring of grain movement. These changes have forced more products to be hauled further by truck.

In fact , more raw agricultural products are being moved further by truck than ever before both provincially and extra-provincially. These changes, along with the elimination of agricultural subsidies, have placed significant pressures on our highway infrastructure. This has been exacerbated by the fact that the appropriate and incremental financial investment into our highway infrastructure has not been maintained as these changes occur.

May 25, 2004 LEGISLATIVE ASSEMBLY OF MANITOBA 145 Today approximately $120 million per year is expended on highway capital programs while there is a need for at least $350 million per year. While this shortfall is allowed to continue our highway infra- structure continues to crumble.

Unless there is a significant change in the funding of our highways the situation will only continue to get worse until such time as our highway system totally collapses. * (19:10) While the Manitoba Trucking Association applauds this government for being prepared to dedicate provincial gas and diesel taxes to highways, roads and infrastructure we strongly advocate that all revenues generated by road users, including all fuel taxes, should be specifically committed to highways, roads, bridges and their related structures. Fuel taxes in whole or part should not be used to subsidize other programs or initiatives.

This recent introduction of Bill 14 will be particularly significant if, in fact, the fuel taxes raised are applied in their substantial majority to cover the actual costs for construction and maintenance. In respect to the proposed Truck Productivity Improvement Fund, the Manitoba Trucking Association specifically recommends:

(1) Any revenues generated by means of the fund process must be committed to the highways/roadways from which the revenue is generated.

(2) Revenues generated by means of the fund must not result in a reduction in the normal Department of Transportation and Government Services capital and maintenance funding of high- ways from the Treasury Board. Revenues generated by this fund must be in addition to the normal capital and maintenance funding.

(3) The trucking industry must have input into determining the distribution of any expenditures of revenues generated by means of the fund. Lastly, the Department of Transportation and Government Services must generate and distribute to the public an annual report which includes a detailed accounting of all revenues and expenditures from this fund, including the cost of administering the fund. Beyond the Truck Productivity Fund, Manitoba must also look to provid e for further transportation efficiencies. Within Manitoba our current highway system allows for limited use of extended-length vehicle combinations.

Further efficiencies can be garnered from our existing highway system by extending this network which, in turn, would reduce the number of trucks operating on our highways and, therefore, reduce the wear on those same roads. These efficiencies would also translate into less greenhouse gases being emitted by our industry. We encourage the Province of Manitoba to aggressively expand this network to allow for these potential efficiencies.

In regard to these vehicle combinations, we were pleased to be previously assured by the Department of Transportation the current use of these vehicle combinations will not result in the application of the Truck Productivity Improvement Fund. In fact, it would only be applied if there was a requirement to upgrade or improve certain sections of roadways for the operation of these vehicle combinations. Governments must broaden their scope beyond the trucking industry in their quest for highway infrastructure funding.

As previously stated, the demise of the Crow rate, the replacement of the local grain elevator with widely dispersed high-throughput elevators and rail line abandonment have forced more products to move further by truck. The elimination of this agricultural subsidy along with the reduction of the railway network and a reduction of the grain collection system have all placed significant pressures on our highway infrastructure.

In their efforts to direct further funds to highway infrastructure, governments are focusing on the industry that has been forced to increase its activities rather than those industries whose actions have caused these increased activities. Government should give consideration to the impacts of these actions rather than just focussing on the end users. Further, if Manitoba wishes to address the infrastructure deficit and direct more funds to highway capital and maintenance, it should be addressing the existing inequities relative to registration costs for trucks.

While a significant inequity exists between registration categories, as an example, the largest category for private or for-hire truck is $4,000 per year, while for a farm truck it is $600 per year, the primary use of these vehicles is the same and there exists no rationale to maintain these cost differentials. It is also well known within

146 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2004 our membership that there are many farm-plated vehicles operating illegally and in direct competition with for-hire carriers while maintaining this competitive cost advantage. At the same time these operators are subject to little, if any, enforcement. Truck registration costs should be rationalized and these revenues should be dedicated to the highway infrastructure capital and maintenance. Manitoba also maintains a differential in fuel tax rates, dependent on the truck registration category.

While all trucks purchase fuel for the same purpose, to haul goods and products on our roadways, some have a lower fuel tax rate than others, yet all categories have the same impact on our roadways. Farm trucks today are travelling five to six times further to move their products to an elevator. While farm-plated trucks are hauling more products further by road and in many instan ces acting in the capacity of for-hire carriers, they operate exempt from fuel tax. In this day and age, there is no rationale for a differential in truck fuel tax rates and, therefore, Manitoba should eliminate this differential.

In closing, we strongly recommend that this government ensure that along with the proposed revenues generated from the Truck Productivity Fund, further and appropriate funds be dedicated by the Treasury Board to our highways and bridges. Additionally, all revenues from equitable fuel tax and registration regimes should be dedicated to our highways and bridges. Lastly, Manitoba should give serious consideration to the impact of the actions of the industries that have been the cause of the increased highway activity. Thank you. Mr. Chairperson: Thank you, Mr. Dolyniuk, for your presentation.

Ar e there questions from committee members? Mr. Maguire: Thank you very much for your presentation, Mr. Dolyniuk. Certainly, the Manitoba Trucking Association has got a great stake in the Manitoba economy, and, as you pointed out, many of the largest firms in Canada, the largest companies in the trucking industry, are located here in Manitoba. I guess I have asked a question earlier just in regard to the issue of fees and permits as opposed to private-sector involvement. I wonder if you would see any differences there.

In a private company's entering into a partnership with anyone, with govern- ment or another business, to do a particular piece of infrastructure that would benefit them is, certainly, one thing and as has been indicated by the previous presenter that in some jurisdictions those are capitalized, depreciated over time, the same as any other infrastructure or any other capital investment by a company. But I wonder if you could just give me your views on any differences that you see between permits and fees as opposed to the private- sector investment in relation to a specific piece of highway. Mr.

Dolyniuk: I think the private-public partnerships are for specific projects and, you know, whatever the ratio split is between the private sector and the public sector certa inly, as was previously indicated, the private se ctor should have the opportunity to use it as a capital investment. * (19:20) As far as fines are concerned, certainly, the Manitoba Trucking Association has been on record with this government and previous governments that, No. 1, we do not feel there is enough on-road enforcement in place yesterday or today to, in fact, rigidly enforce the weight and dimension rules that we do have in place.

Obviously, not complying with the weight regulations is one of the causes of our deteriorating highways. We encourage if somebody is breaking the law, they should be penalized. We do not have a problem with that. As a matter of fact, as I said, this government and previous governments we have lobbied for more on-road enforcement because we continually hear of people using the back roads and virtually wrecking the back roads to sneak around scales. We do not support that. We do support stiff penalties for overweights.

As far as the permit system, I think the market will dictate, certainly from our part of the industry, whether or not industry will accept a permit. If the cost of the permit is cost-prohibitive to either the trucking company or the person who is buying the services, then that transaction just will not happen. So it obviously has to be a win-win situation. The price has to be acceptable to both the purchaser of the service and the trucking company and, obviously, the department, and if it is not, it is not going to work. Mr.

Faurschou: I just want to ask about a clearer definition on "all revenues," which you made in your

May 25, 2004 LEGISLATIVE ASSEMBLY OF MANITOBA 147 presentation here. Are you including driver's licences as well as registration for vehicles and any other revenues which are deemed transportation revenues? Mr. Dolyniuk: Yes, obviously, in our presentation we have said, "all." There would obviously have to be a cost of administering the department, et cetera, so part of the cost revenues generated would have to go to that. But, as an example, Driver and Vehicle Licencing, I may be off a bit, but I believe that they generate approximately $75 million a year. We believe that that should go into our infrastructure.

Mr. Faurschou: Yes, you are quite right in that, and registration fees in addition to it. Clarification in your relationship between farm-plated vehicles and commercial-plated vehicles: Are you suggesting that the practice of using marked fuels be done away with as far as road activity for haulage? Mr. Dolyniuk: In some circumstances, without question. As I said in our presentation, it is well known within our industry, within our members, where they are daily being confronted with vehicle operators operating on farm plates with what one can only assume marked gas in direct competition to for- hire industry.

We have had an issue with that for many years. We have brought it to this government and we have brought it to previous governments that there has to be a rationalization. It has to be reviewed and it has to be rationalized. In the time, let us go back in history, I do not know, 20, 30 years ago when farm trucks were operating exempt. They were operating one- and three-tonne trucks. They were going from the field to the farmyard, from the farmyard to the local elevator.

Today, we have farm-plated trucks that are 62 500-kg B-trains that are operating throughout Manitoba, western Canada and into the U.S. on farm plates; and as I said earlier, in some instances in direct competition with the for-hire industry. We cannot accept a differential in fuel tax rates and we cannot accept a differential in truck licence costs with somebody that we are competing with as it turns out. If we want to compete, let us put us all on a level playing field and we will gladly compete. Mr. Lamoureux: A couple of very quick questions.

Your association, would that then represent the interprovincial, international companies that would go beyond Manitoba's border? Would that make up– Mr. Doylniuk: As well. Mr. Lamoureux: –for hire? Mr. Dolyniuk: Sorry, Mr. Chair. Yes, our membership would include local, and I say local as far as Winnipeg or Brandon or some of the other urban centres, intraprovincial, some companies that operate just within Manitoba, and others that operate throughout Canada and the U.S. Mr. Lamoureux: I was impressed with the number when you mentioned 350 000 trucks crossing the U.S.A.-Canada border.

That is almost 1000 a day, virtually. The thought that came to my mind was, could you give us a sense, your best guesstimate, because that is likely what it would be, as to these four highways in the province that have 80 percent of all the truck traffic–can you just give some sort of an indication on, you know, what, if that is possible in terms of a guesstimate? Mr. Dolyniuk: I think the University of Manitoba would have better statistics in that regard, the engineering department, but I would suggest, Nos. 1, 75, 16 and probably 6 and 10, to me, and No. 2 as well.

I would like to say No. 3, but because of its condition it probably is not up there. Mr. Maguire: Just a couple of quick questions, Mr. Dolyniuk. You were referring to the issue of unfair competition in that industry. I assume you were indicating that that was farmers hauling grain for someone else that may not be their own product. Mr. Dolyniuk: I am going to get a slap on the wrist. Grain products, certainly agricultural products, is one thing. There are other products that are being hauled as well. Mr.

Maguire: If I could, I noted one of your points here in regard to your recommendations is that there be an accounting of the administration cost of these funds. One of the things that I see with this funds fees permits is that there will be more administration in regard to looking after the little funds of money on each of these roads around that could take a good deal of administration, either that or the fines are

148 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2004 going to have to go up to take care of the administration and the extra costs of administering each of these projects. I do not certainly have a problem with the whole accounting of revenues and expenditures from the fund, but can you just indicate to me what your views would be on how administration costs have been dealt with so far and how you think that they would be looked at or whether they would be increased or not by this bill? Mr.

Dolyniuk: I do not know that I am the appropriate one to speak as to how the department handles its accounting, but I would think, as an example of public-private partnership, that would be a contract; that would be a separate account. If you are talking about permits, there is a permit system. If it was automated, you are generally inputting into a data base, and the data base should be able to keep track of that for the depa rtment. As far as fines, again, the same thing, because on the fine there is a location.

I do not know that we would subscribe to the concept of putting a fine penalty to a specific highway, but perhaps in a pot where government and industry determines where it should be used. You could do it that way, I believe. Mr. Penner: Thank you very much, Mr. Dolyniuk. You indicate that the Manitoba trucking industry has lost 20 percent of its commercial driver population since 1994. What is the basis you base those numbers on? What records could you table here today or could you send to us that would show that clearly, and what would you attribute that to? Mr.

Dolyniuk: Those are Statistics Canada numbers that I pulled from a report that I have in my office that I would be happy to provide. I think there are a number of issues that caused that to happen. One only has to read the Saturday Free Press or The Winnipeg Sun or some of the regional newspapers to see that we are continually looking, our industry is looking for drivers. It is not a unique situation in Manitoba, but that is the situation that goes on across Canada and the United States. The reality is that if our industry cannot find drivers in Manitoba, then they will hire them somewhere else.

I would su ggest to you that there are Manitoba companies that have significant work- forces based out of Alberta and Ontario because they have not been able to find enough people here. Certainly that would be one of the issues right off the bat that would cause it. I have to give some thought to other impacts, but right off the bat that would be one issue. Mr. Penner: You also indicated your concern about farmers hauling other than their own product into the marketplace, be it commercial and/or their own product or their neighbours' products.

You indicated also that farm plates were sold at a lot lesser rate than your commercial rates were. How would you license, for instance, a farm truck that travels, let us just for argument's sake say, between 10 000 and 20 000 kilometres a year and is parked the rest of the year, for whatever reason is no t operated, compared to a truck that would travel 100 000 to 200 000 kilometres a year? How would you do the licensing procedure? Would you do it on a flat-rate com- mercial basis, or would you have an elevated basis of licensing fees, or how would you do it? * (19:30) Mr.

Dolyniuk: I guess if I were the decision maker, I would say that the months or the weeks that you are not using that truck, you submit your registration and the plates are off the truck and it is not operating. The same as a commercial truck: I can license it at the beginning of the year for X number of dollars if I only use it for six months; after six months I turn in the plates and the registration. I do not see why that could not be used for all categories of trucks. Mr. Penner: Mr.

Dolyniuk, what if I only have, let us say, two or three loads a month to haul and I have to haul them because we are on a quota system and you have to get your grain to market and you have to have them year-round, so how would you do that? Mr. Dolyniuk: Well, I guess in that situation I would suspect that you would have to buy the plate for a month. Mr.

Penner: If you have to deliver three loads a month year-round, on-time delivery; I guess what I am looking for is how you would make the differentiation for that truck that travels, let us say, 10 percent of the road miles that other fully commercialized trucks do. How would you make that delineation if you were the one that was applying the law? Mr. Dolyniuk: I guess, in our view a truck is a truck. It is hauling product. If I take an analogy of

May 25, 2004 LEGISLATIVE ASSEMBLY OF MANITOBA 149 your car and my car. If my car gets 5000 kilometres per year and you live right beside me, and you put on 60 000 kilometres per year on your car and it is identical cars, identical coverage, what have you. The registration cost for your car and my car is the same, regardless of the miles we put on. If I choose to have my car sit in my driveway year-round with the plates on it without using it, then I guess that is the decision that I made. Mr. Lemieux: Thank you very much, Mr.

Dolyniuk and your organization is a key stakeholder in the province of Manitoba and we appreciate your counsel any time. There are a lot of difficult issues and we appreciate your support with all the caveats therein and we look forward to having you provide advice to us on other occasions as well. Thank you very much for taking the time this evening to give us your presentation on behalf of your organization. Mr. Chairperson: Thank you very much, Mr. Dolyniuk. The next presenter on my list is Chris Lorenc. Good evening, Mr. Lorenc. Do you have a written presentation for the committee? Mr.

Chris Lorenc (President, Manitoba Heavy Construction Association): Yes, I do. Mr. Chairperson: I think your presentation has been circulated, Mr. Lorenc. You may proceed when you are ready. Mr. Lorenc: Thank you very much, Mr. Chairperson, ministers and members of the committee. I am pleased to present remarks pertaining to Bill 12 on behalf of the Manitoba Heavy Construction Association. My comments this evening will be focussed on the dedication principles.

As you may be aware, our association represents the heavy civil construction industry in Manitoba, and during the peak season period we employ roughly, directly and indirectly, 15 000 Manitobans. Bill 12 establishes the Trucking Productivity Improvement Fund, and we support the purposes to which that fund is directed.

We also agree with the substance of comments made this evening relating to the application of funds, the need for accountability and transparency, the need for a larger and more diverse stream of revenues allocated directly to re- investment in the provincial highway system which is under tremendous stress. We also support the apparent shift in thinking which supports through legislation the notion of dedicating revenue streams back to the system generating it for the benefit of all users and contributors.

We support the transparency and audit provisions which are attached to the creation of the improvement fund and we also have some friendly suggestions. There are two landmark pieces of legislation currently under House review. Those are Bill 12, and 14, The Gas Tax Accountabil ity Act. Our preference would be to create one account under Bill 14 or new legislation to which all sources of revenues derived from road use were deposited, and whose use would be limited to road and highway construction and maintenance programs including those funds proposed to be raised under Bill 12.

Road-use revenues could be deposited into a separate interest- bearing account in the Consolidated Fund, in trust for the intended purposes. Separate accounts from within the fund could then be established for permitted expenditures, including the purposes identified in Bill 12. This approach is specifically contemplated in

section 34 within the bill. The above support the underlining accountability and transparency principles. We understand that the practicality of such a change midstream in the process of considering these two separate bills is unlikely. However, we think it is important to observe that an overall approach is what is needed to address the funding challe nge. It is, therefore, offered for your consideration as a near future policy area requiring attention. In our view, departmental costs unrelated to actual construction and maintenance programs should be funded out of general provincial revenues.

This requirement would put the pressure to find efficiencies in department expenditures elsewhere without taking the easier way out of either raising fuel taxes, licences, or other charges, or reducing the portion of such combined revenues being applied to construction and maintenance programs. With respect to financial accountability, we think it is important to establish principles which will be consistently applied to the creation and dedication and accountability for dedicated fund streams.

The approach suggested in Bill 12 provides, in our view, a most appropriate level of transparency and public accountability for funds raised and expended. We

150 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2004 applaud the principles enunciated in Bill 12 and, in closing, thank you for the opportunity of making this presentation. Mr. Chairperson: Thank you, Mr. Lorenc, for your presentation. Are there questions of the presenter? Mr. Maguire: I would like to thank you for your presentation, Mr. Lorenc, in regard to the Trucking Productivity Improvement Fund. I have asked others about the differentiation between the fees and the permits and the private-sector involvement.

You have made another good suggestion about combining to look at putting the gas tax and any revenues that can be generated through other sources into more of a combined pot, if you will, to look at infrastructure maintenance. Do you think that there is a difference in how each of those can be utilized. I keep asking this question. As you have noted from the audience, I am sure, I have a concern that if there are a lot of fees and permits on a particular piece of road, then will that offset what private industry would have to put in to a particular piece of road or not?

If it would, then does that not leave private industry totally in charge of upgrading a particular piece of road where there are few fines or few permits? Mr. Lorenc: I am not really in a position to give you an informed answer. I frankly do not have much experience in that side of fund administration.

We, as an industry association, have long articulated the view that revenues generated from transportation should be reinvested back into the transportation system and that the objective, the public policy objective should be to raise revenues from users which equal the amount of reinvestment required in order to maintain the system in a safe, efficient manner. The minutiae of what you do with the accounts are best left, perhaps, to others to comment upon. * (19:40) Mr. Maguire: I know that it has been noted by the government that these funds are not meant to be a moneymaker in regard to these issues.

I find it hard to understand how it cannot be a moneymaker. I thought that was its purpose in regard to providing some funds for upgrading roads in some areas and that that would be a basic premise of this particular fund being established, to be used for the purposes that have been outlined in the bill by the minister, by the government.

I wonder if you can give us any indication as to, as I just previously asked the previous presenter as well, about whether or not the administration can be streamlined enough to prevent the costs from going up in the administration in regard to the collection of fines, the collection of permits, the collection of dealing with private-sector investors in those areas. That would be my first question. Mr. Lorenc: There are really two questions which you have just indicated.

With respect to admin- istration costs outstripping the growth of funds, our position again is that the funds should be used for the purposes for which they are intended, which is improvement, and that the administrative costs associated with running the department should come from general revenues. That provides some sepa- ration and it requires, then, fiscal discipline to be injected in terms of running and maintaining a department. With respect to whether or not this is a money- maker, I think in part the answer is two-fold.

The simple one is do not breach the overweight restriction regulations and you have nothing to worry about as a trucker. Secondly, I think the other observation that was correctly made by one of the presenters was one would expect and reasonably anticipate that there would be some amount of discretion exercised by enforcement officers. Mr. Maguire: I, too, would concur that as a former farm leader who was involved with issues of trucking in freight across the Prairies, I would certainly concur that if there are those who are breaching those circumstances then fines will be levied.

I know that they have been and will be and that the minister is putting forth a bill to deal with those in a certain way. I note that yourself, your organization as well as the previous one, The Manitoba Trucking Association, has indicated that there needs to be a more concerted effort in re gard to providing funding overall for highways in the province of Manitoba. Having said that, do you not see this as somewhat of a tax on industry or a tax on the setting up of processing or trucking in the province of Manitoba? Mr. Lorenc: Only two things certain in life, Mr. Chair, death and taxes.

You are only going to raise

May 25, 2004 LEGISLATIVE ASSEMBLY OF MANITOBA 151 revenues from users through the form of taxes, licence fees or other charges. Our view and our opinion and our position has been that those taxes, licences, fees, et cetera, should be reinvested in the transportation system. I know of no other way by which government raises funds other than licences, fees and taxes. It is a matter of balance and it is a matter then, ultimately, of how and where they are applied. Mr.

Maguire: Just a last question, I know that in the area of fees and fines and penalties, certainly, those are one circumstance, however, when private industry is being told that, you know, here is an opportunity for you to invest in infrastructure with us, I guess I look first and see that that maybe a replacement of funds that the government is presently working with today.

Or it may be that if this bill is there it is a coercion, if you will, for the private sector to have to come in and say well, it looks like we are going to have to partnership in this particular area or we will not be able to set up our industry here. Do you see any great concern in that area? I know that those kinds of partnerships do occur with some multi-national companies and that sort of thing but I guess I am looking at the agricultural base in Manitoba. I am looking at the size of that industry. I am looking at the means of individual farm units to be able to enter into those types of circumstances.

The last thing I would want to do is discourage small processing opportunities in the province. Mr. Lorenc: Mr. Chair, I think that, really, what we are talking about here is a series of steps that I see the government engaging in. The first step is to clearly indicate support for the concept of dedicating, limiting the purposes to which the funds can be put, in the context of transportation. As a sub to that first, opening the door to public-private partnerships is I think an appropriate step in the right direction. Public-private partnerships are not a panacea.

They are not going to apply in each and every instance. There is a matter of how you apportion and balance the risk as between the public and private sectors, whether or not there is an ability to handle the risk depending on the project, what the revenue streams are and so on. So public-private partnerships are one of the options that should be used and are used by government and public agencies as they are in the private sector to address capital investment needs.

The third step is one effort that the Chair chairs, and that is 2020–Manitoba's Transport Vision, which is intended to provide for public consumption and debate an overall picture of how we manage reinvestment in the transportation system. So I think these steps are all important and, hopefully, at the end of the day will result in a transportation investment strategy that has four corners within which government makes the investment decisions. Mr. Lamoureux: Very quickly, Mr. Lorenc, I think in terms of streets, road s, highways, the different levels of government, it is more of a general question.

Whatever you are driving on, it seems as if there is a need to improve the condition of that particular road. If you were to estimate or, again, guesstimate in terms of what sort of a cost factor, an annual cost factor, do you see would be necessary in order for proper roads in the province of Manitoba, whether it is in the city of Winnipeg, Brandon, or highways, because I know your association is quite heavily involved at all levels of government, we get the newsletter on a regular basis from your group, if you could answer that.

The second one would be if you had the federal revenues and provincial revenues that are all associated with the revenues generated from vehicle traffic, do you believe that amount would actually cover the cost of the maintenance that we currently collect? Mr. Lorenc: The provincial government collects approximately $205 million annually, $207 million, in provincial road use fuel taxes. The federal government collects from Manitobans roughly $155 to $165 million in federal road use fuel taxes. The combined amount is in the vicinity of $370 million.

The Department of Transportation and Government Services in reports leading to the 2020– Transport Vision process identified that there is an existing investment requirement over the next 10 years of $350 million in each of the next 10 years to bring the system up to a reasonable standard. So the short answer on the provincial highway system is that you need $350 million invested annually in each of the next 10 years before you can start making improvements to the system. So you are looking at a global investment deficit of $3.5 billion

152 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2004 which is growing exponentially the longer we fail to meet that gap. With respect to the city of Winnipeg, you are looking at an overall investment deficit of about $1 billion for street, sewer, water, and related infrastructure. With respect to rural Manitoba, in waste water treatment, as I recall, it is about $1 billion, and if you look at the numbers under the Canada Infrastruct ure Works Program, there was about $2 billion worth of application for funding for a variety of infrastructure assets.

So, in this province, you are looking at well in excess of a $7-billion investment deficit, and I want to hasten to add that Manitoba is not the only province in that situation. We have a national core municipal infrastructure deficit of about $57 billion. On the national highway system, it is about $19 billion, and, I think, on the remaining provincial highway systems, it is probably in the vicinity of $20 to $25 billion, so it is a huge problem. * (19:50) If we were in a position where all of the road-use fuel taxes were dedicated to highway construction, you would be able to address the problem.

But that, then, still leaves the other infrastructure transpor- tation assets in rural Manitoba, in urban Manitoba that are neglected. So it is a matter of balance. That is why we take the approach that it took us decades to work our way up to a $7.5-billion global infrastructure investment deficit in this province. It is not something we are going to fix overnight, and it is not something we are going to fix over the next decade.

It is going to take decades to resolve, but the steps that need to be taken in order to address that are some of the steps that we are discussing today: Adoption of and subscription to the principle of dedicated streams of revenue for specific purposes; subscription to the notion that you need to reach out to the private sector and use, where you can, public- private partnerships; then the overall transportation investment strategy, which was the process launched in 2020–Manitoba's Transport Vision.

We also are of the view, and have made this position to government over the last many years, that there needs to be a co-ordination of transportation and infrastructure assets that this province benefits by. That is something that we think provincial governments should take very serious note of as well, in order to eliminate the overlaps by ministries and, sometimes, the conflicting directions that might be taken by ministries because there is not, over decades, a co-ordination of investment in our infrastructure. Mr. Faurschou: Just in the presentation, Mr.

Lorenc, as we heard earlier this evening, similar legislation is in place in Saskatchewan where, in fact, they have third-party or participant direction within the funds expenditures. I know you are a very strong advocate of third-party or interested party partici- pation in fund expenditures. I do not see that in your presentation here tonight. I would like to give you this opportunity to, perhaps, comment. Mr. Lorenc: Mr. Chair, the observation is correct. As I said at the outset, I came prepared, really, to discuss the principle of dedication as the primary focus of attention.

In my answers, I did indicate that we subscribe to and support the concept of public-private partnerships, with the cav eat that they are not a panacea and do not apply to each and every instance, but, where, particularly in high traffic volume areas where you can identify streams of revenue, those might make sense.

You will see that in congested areas like Toronto and L.A. and other parts of the United States, where the volumes of traffic are horrific, but can generate revenues because you are providing an infrastructure a sset that cuts the travel time or reduces the distance between points, and the payment of fees is justified. In British Columbia, they have done that successfully. So public-private partnerships are an option. Typically, they have greater application in very high traffic and congestion areas, not the kind of prairie situation that Manitoba is either blessed or cursed by. Mr. Penner: Just one question, Mr.

Lorenc. In the agricultural community in Manitoba, we are faced with a situation, as primary operators, whereby when we leave our storage area to get to the marketplace, we are very often faced with a situation where we have to travel on three different weight-carrying capacities of roads. It causes us huge difficulty for the primary producer. This has to be done, as you know, on a far more regular basis than what it used

May 25, 2004 LEGISLATIVE ASSEMBLY OF MANITOBA 153 to be because of the diversity of products we haul these days and the extent of processing that goes on, either on farm or just off farm. Can you give us a bit of an overview as to what your perception would be of equalizing or providing funding out of a designated fund such as this to upgrade the standards of those roads to give equal access to a producer, regardless of where he operates out of? Mr. Lorenc: I am not sure I have an answer for that question.

The purpose of this fund is to try to identify revenue streams and re-invest those revenue streams back into roads for the purposes of their improve- ment. That is a principle that is worth supporting. Because I do not have any practical experience in how other jurisdictions may or may not have been working and/or how successful they were, I would really be taking a guess, and I would rather not give you a guess as an answer. Mr. Penner: Well, thank you.

The Prairie Grains Roads Program was initially the brainchild, I think in large part, of the farm community when the Crow benefit came along, and was initially intended–and I use the word "intended" for the upgrading of routes for rural access–specifica lly, for the agriculture community to get to market in a better transportation mode than they do today. What would your view be of redefining or developing a process of funding that would get us back to that initial principle that was enunciated under the grains roads program? Mr.

Lorenc: Well, the Prairie Grains Roads Program, as I understand and recall it, was an arrangement where you had three levels of government pool funds–municipal, provincial and federal–for identified routes which were affected as a result of the elimination of the Crow rate subsidy. Certainly, an agreement that identifies that routing system makes sense. There is an impact as a result of a federal decision, and the impact is higher than anticipated and heavie r than anticipated usage of certain roads in order to get the product to market, and there needs to be some adjustment and compensation for that.

But, again, it seems to me that this is not the fund, as I read it, in any event, that is intended to address signif icant issues of concern, such as you have described. What you have described is more properly in the domain of identifying in a public debate what the relative roles of government are as it relates to funding and maintaining of roads, whether they are urban or rural or highway in nature. I do not believe that it is the intention of this particular piece of legislation to address that issue.

This is simply saying we are identifying a piece of revenue, sources of revenue, and we are going to re-invest those funds so that the users can benefit by the reapplication of those funds. You are talking about a much higher level. What should the arrangements be between the federal and provincial governments as it relates to funding of roads? What should the provincial responsibility be as it relates to regional streets, bridges and related structures in the urban context?

That, I think, is a much broader area of policy debate, a very interesting one that I would love to engage in, but I am not sure that Bill 12 is about that. Mr. Chairperson: Mr. Maguire, with one short question, please. Mr. Maguire: Just the size of permits, Mr. Lorenc. Can you indicate to me whether you feel that, within sectors–or should all sectors be the same, for the size of some of the permit fees? How would you go about determining what the size of those permit values should be? Mr. Lorenc: Mr. Chair, that is not an area of my expertise, so I am not going to hazard a guess. Mr.

Chairperson: Minister of Transportation, did you wish to yield? Mr. Maguire. Mr. Maguire: Okay, thank you, Mr. Chairman, and thank you, Mr. Minister. Mr. Chairperson: We are running short of time. Mr. Maguire: Would you recommend that those permits be the same for all parts of the province? Mr. Lorenc: The same answer, Mr. Chair. Mr. Lemieux: Thank you very much, Mr. Lorenc. As president of the Manitoba Heavy Construction

154 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2004 Association, I appreciate your comments, and also your patience with regard to some of the questions we have posed to you in trying to get some feedback from your organization with regard to your position, and especially your clarity with regard to what Bill 12 is all about. It is not about the bigger picture with regard to financing the highway infrastructure program throughout all of Manitoba, but specifically toward a particular project. Thank you very much for your input and your comments. * (20:00) Mr. Lorenc: Thank you very much. Mr.

Chairperson: Thank you very much, Mr. Lorenc. Mr. Lorenc: Good evening. Mr. Chairperson: I think that concludes the list of registered presenters. Is there any member of the public in the audience here this evening who may wish to make a presentation on Bill 12? Seeing none, that concludes the presenters for Bill 12. Bill 24–The Travel Manitoba Act Mr. Chairperson: We will then proceed to the list of presenters for Bill 24, The Travel Manitoba Act. The first presenter registered is Jim Carr of the Business Council of Manitoba. Is Mr. Carr present this evening? Not seeing Mr.

Carr here this evening, his name will drop to the bottom of the list. The next presenter registered is Jim Baker, Manitoba Hotel Association. Is Mr. Baker in attendance here this even ing? Good evening, Mr. Baker. Do you have a written presentation for committee members? Mr. Jim Baker (President and Chief Executive Officer, Manitoba Hotel Association): No, I do not. Mr. Chairperson: Then you may proceed when you are ready, sir. Mr. Baker: Thank you, Mr. Chairperson. Minister and members of the committee, good evening. I am Jim Baker. I am the president and CEO of the Manitoba Hotel Association.

I am also a member of the Ministerial Advisory Council on Tourism, which was established in 2002 to provide advice to government on the development of the tourism industry. It is comprised of 28 repre- sentatives from all aspect s of the industry. I was appointed to the council to represent the interests of our Hotel Association. I would like to comment that this council has received very positive responses from government. We are extremely proud of our accomplishments to date.

In July of '03, we recommended that the government adjust the school year to after the Labour Day weekend, and the government, thankfully, responded positively to our recom- mendation. As a result, our industry benefits from an extra week of summer vacation and, hopefully, another week of summer, because we do need it this year. The Ministerial Advisory Council on Tourism has been working closely with the government on the development of a framework for the new corpo- ration, Travel Manitoba. Last spring we presented specific recommendations to transfer delivery of tourism programming to a stand-alone agency.

The council has analyzed tourism delivery models in other jurisdictions and is working in consultation with the industry on a made-in-Manitoba tourism solution. We are confident we can build a public- private partnership that builds on the capacity of the tourism sector to serve as a catalyst to economic, social and cultural growth. We know that to be successful in meeting the expectations of the intern ational tourism market we must have a co-ordinated approach between government and industry. Industry should have a stronger role in marketing, product development, quality assurance and training programs.

We need to find new ways for every sector in the tourism industry to partner-invest with Travel Manitoba to realize real growth in the future. The Manitoba Hotel Association supports the establishment of Travel Manitoba as an agency of the Crown. We believe the operation of Travel Manitoba should be premised on a public-private partnership where both government and the private sector invest to realize mutual benefit.

May 25, 2004 LEGISLATIVE ASSEMBLY OF MANITOBA 155 Those are my brief comments. Mr. Chairperson: Thank you very much, Mr. Baker. Are there any questions of the presenter by committee members? Mr. Glen Cummings (Ste. Rose): In reading the bill, I just wondered if you felt that the opportunity for active involvement and representation by the participating members in the industry was adequate in terms of the new association being responsive directly to the board. Are you satisfied that the conditions surrounding the appointment of the board are appropriate? Mr.

Baker: Well, as you probably know, the government has recruited a consultant, Western Management Consultants, to do preliminary work. So very much the formation of the board of directors, the policies, initial budgets and all that are evolving. I have had the privilege of listening to a presentation by that consulting firm and also from the government, and I am confident that there is going to be ample opportunity for the industry to contribute. Mr.

Cummings: Well, the reason I asked the question is that over the years I know that the industry has wanted in, as it were, terms of opportunity to be actively involved in the management of the tourism opportunities. That leads me to the question of whether or not we should be looking at any amendments that would further mandate the responsibility of having the industry placed in a leadership role, more than the bill contemplates today. Mr. Baker: This is certainly a major step towards doing exactly what you described.

I see it from being involved in the industry for a number of years and sitting on a Crown corp in the tourism business. This gives ample opportunity for representation across the industry on the board of directors. That, of course, will be the critical piece as to the appointees to that board, which will be, of course, by the government. We have assurances, and I believe and trust in them, that we will have ample opportunity to put forward good people, not just people necessarily from hotels or airlines, but for good people who can bring business acumen to the fore. So I think the process is appropriate Mr.

Cummings: I certainly respect your experience and the knowledge that you bring to the table. In trying to make some comparisons with other examples across the country, it seems to me that there is at least one other example where it is mandated that the industry sectors would be represented from recommendations or appointments that they would make directly to the management. The alternative, and the reason for asking the question, would be that it could become, with the greatest respect to the minister and the ministry, the playground for the appointment of friendlies. Mr.

Baker: Well, the government always has that option by the act, the legislation, to make the final appointment. My experience with government is that, when good candidates are brought forward, they typically are appointed. I really cannot comment on the assertion or the assumption that you advance. There should be a caution, of course. I think it rests on the industry and all the participants, our 28 members of this council that represent hundreds of private enterprise, to be diligent and do their homework and forward candidates that the government would see the logic in appointing. Mr.

Cummings: The other question that I have is regarding the ownership of capital assets. I know that our critic, who is unable to be here tonight, was quite interested in knowing how far the industry felt, or, in this case, how far you believe that the corporation should go in the ownership and management of Crown assets. Mr. Baker: My understanding of the capital assets that this agency would have would be those of minor amounts, meaning computer systems and office furniture and the like, that are presently employed in the management of our tourism industry right now.

If you are alluding to the purchase of a hotel, I would not see that being that appropriate, given the market conditions at this time. Mr. Cummings: That is exactly what I was alluding to. I appreciate your answer. Thank you very much. Mr. Larry Maguire (Arthur-Virden): I just had a question. We have heard a lot about private-public partnerships. I am pleased to hear your statements in regard to that in your opening remarks, and that the industry feels that they can build from that. I note

156 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2004 with interest that in some jurisdictions there have been other funding mechanisms put forward from the private sector being involved in these public-private partnerships. I wonder if you can give me some idea what examples of funding the private part of the operation would be involved in, in some of the other jurisdictions. * (20:10) Mr. Baker: Well, briefly, at the present time, there is Destination Winnipeg that is involved in marketing Winnipeg and, obviously, the province.

The Winnipeg Convention Centre markets, and every hotel of any major size–I sh ould not say of any size– any hotel is out there marketing their product. At the same time, we have the Canadian Tourism Commission with some 25 million of marketing dollars. Those dollars are not readily available by smaller operations.

There is an opportunity through this agency to combine some of those dollars–some of them are quite sizeable when it comes to the marketing of convention business meetings and convention business by some of our major hotels–to combine in a more effective manner and to also encourage, by the board coming from a broader sector, more co-operation between the various agencies and the industry people–better use of their dollars, focussing. Mr. Maguire: Just briefly, I wonder what your position would be in regard to hotel taxes.

It is my understanding that some provinces do have a percentage of a hotel room tax going towards this kind of a partnership at the present time. I know you have indicated, and I understand from working with many hotel members across the province of Manitoba, that they are out there in their com- munities trying to promote tourism and that sort of thing in every one of their communities on a daily basis. I trust that they are putting more than just their sweat equity into that. There are funds that go into community development as well.

I am wondering whether your association has taken a position in regard to any other direct percentage, as I should say, in regard to that. I guess there is no other way of saying it. It would be another tax in that area. Mr. Baker: This bill does not detail that, does not contemplate that. I do not think we have enough time for me to give a full discourse on hotel taxes because, in my mind, a misconception about some of these provinces, how they collect and use dollars– indeed, the province of Alberta has a room tax of 5 percent. It goes into general revenues, but some of that goes into marketing.

They, of course, do not have a provincial sales tax. You will get other provinces, British Columbia, for example, where rooms are excluded from the provincial sales tax, but they do, in some areas, have room taxes. The collection of money by way of taxation is endorsed or acquiesced by the industry where it goes totally into marketing efforts, and there is full participation by the industry. I believe that this government in this act is not moving in that direction. I approve of that lack of direction. Mr. Kevin Lamoureux (Inkster): A couple of very quick questions.

The Business Council of Manitoba and the Manitoba Hotel Association , I appreciate the fact that both organizations have their names here. The question that came to mind is in regard to the appointment–you have a board of between nine to fifteen people, three of which are appointees from the government, no matter what happens. There has been some suggestion, including from myself, that there would be benefit if we had outside groups to give it more of an arm's-length, independent feeling, that it might be better to have, for example, Manitoba Hotel Association, to appoint a member within themselves internally.

The question I have for you is do you feel the membership of your council would support having the opportunity to be able to appoint a person direct to the board. Mr. Baker: I take it that you are suggesting that the Hotel Association and other associations or interested parties would have an automatic seat at the table, that would be in the legislation. No, I do not think that is very workable at all. I advocate the best candidate put forward.

I have learned several things here, this Ministerial Advisory Council, and one of the things is, is to see the intelligence and the focus and the direction that comes from the smallest industry player, including the people that run biking tours in national parks. You do not need big organizations or big associations to get good people. I am very supportive of the quality of people that we have in the industry. What this council has done and this act will do will bring those voices forward as

May 25, 2004 LEGISLATIVE ASSEMBLY OF MANITOBA 157 opposed to having some of those voices perhaps blocked out because you are guaranteeing other voices. Certainly, from my standpoint, from our association, we will be working diligently to have proper representation on that board. The question is, should it be me as the paid person for the association or should it be somebody that is really involved in the industry and has, perhaps, more hands-on. I would hate to have a system where that type of constriction applies. Mr.

Lamoureux: Then your organization would not be able to, then, appoint someone to represent Manitoba Hotel Association to a board if, in fact, it was saw fit to allow it to occur. Mr. Baker: As I take the question or my answer to what I think the question was is that we feel we have an opportunity to bring forward multiple names and candidates for board position.

I do not have any concern about representation and if, in the extreme, because I think we are a major player and I would think that that would give some weighting to our suggestion of candidates, but if it did occur that we did not have somebody that is a member of our association, I have great confidence that the representation that will come from the broader industry will not only be adequate and good, but would also provide us for an input because we now have, through the Ministerial Advisory Council, a body to air some of the common interests. Mr. Jack Penner (Emerson): Mr.

Baker, the government of Manitoba has, on a number of occasions at least, hinted at the very significant deficit in operations at Hecla Resort in Manitoba. If this board that is being established under this act took it upon itself to want to acquire Hecla and operate it as an industry, do you see anything prohibiting that sort of action being taken by government to divest itself of an industry, and is there anything that would prevent the board from taking over a resort such as Hecla Island and operating it under this act? Mr. Baker: Firstly, the matter of Hecla is currently under review.

That board, and I am a member of that board, has been for years looking for ways to improve and to bolster the management and content of that property. It has been a concern of your government when you were in power and, certainly, from the government currently in power, when going back 20 years. My opinion would be that this agency would not be actively involved in that type of consideration. I think its mandate is focussed on the marketing, as opposed to managing assets. Mr. Penner: My question, Mr.

Baker, was simply: Is there anything preventing the ownership and operation of a resort such as Hecla under this act? Mr. Baker: I would have to review the act. I really cannot offer an opinion. That is a legal opinion, and I am a former accountant. Mr. Cummings: Following up on earlier questions, you have the advantage of being one of two presenters tonight so we get to ask more questions. But under the mandate that is being established here, there are some fairly sweepi ng powers.

First of all, those powers seem to indicate the ability of setting fees and raising funds, which the industry that you work with would be one of the first targets I would assume, which is more potential sources of revenue. Which leads me back to the first question that we asked is about whether or not, and certainly something that we on this side of the table have been considering, whether or not there should be a more mandated way of choosing the members of the board. Can you give us your understanding of the nature of raising funds that this new board may have capacity for and what areas it might be looking at?

Has that been discussed at all? Mr. Baker: Firstly, if you feel you have to ask me lots of questions to justify my time here, I also have to speak at Bill 21 down the hall. Clearly, our industry is under stress. Whenever there is added stress put to the industry in terms of our responsibilities to collect tax dollars, government dollars, we are going to have concern. Our active participation in the council demonstrated that we have access to government to discuss those issues. I have had many opportunities to discuss those issues with municipal governments as well.

It seems that our arguments have been successful. Clearly, I am prepared to defend our positions in regard to extra taxes that we may have to collect. As I said earlier, if there are any dollars generated that do not go to

158 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2004 marketing, I do not think the government would have a problem, seeing that investment in the marketing produces multiple benefits back to the province. My answer in short is: Common sense in business practice once explained to government would undoubtedly give the answer that there is no room for additional fees. * (20:20) Mr. Cummings: Well, I accept your answer and the trust that you are expressing in the system. There is a saying around here that laws and sausages are two things that you should not watch being made.

That leads to suspicious questions about what legislation should contain in order to protect the innocent. That was the premise for my questions. Thank you for your time. Mr. Baker: In response to that, my father worked in the packing-house industry for 40 years and I also worked in packing-house industries and I watched a lot of sausage being made, and I eat it. My brother was a lawyer and I watched him being a lawyer. Well, 50-50 is a pretty good deal. Hon. Eric Robinson (Minister of Culture, Heritage and Tourism): Allow me to thank you, Mr. Baker, for presenting tonight.

I think that you summarize it quite well in advising the committee that, indeed, the new Travel Manitoba agency will have certainly a greater agility and have the ability as well to respond to tourism market conditions and facilitate private-sector input and participation. But, more importantly, Mr. Baker, allow me to thank you on behalf of our government for your ongoing participation on a Ministerial Advisory Council on Tourism. You are indeed one of the 28 dynamic men and women that have done a tremendous job in bringing us this far in ensuring that this indeed becomes a reality in the near future.

I would like to thank you very much for your presentation tonight. Mr. Baker: Thank you very much for those comments, and thanks to former Minister Lemieux who was responsible for forming that committee quite some time ago. I appreciate having had the opportunity to participate. Mr. Chairperson: Thank you, Mr. Baker, for your presentation here this evening. For the information of committee members, there has been one additional presenter that has been registered, Max Johnson, co-chair of the Ministerial Advisory Council on Tourism. Mr. Johnson, if you are in the audience please come forward. Good evening, sir.

Do you have a written presentation? Mr. Max Johnson (Co-Chair, Ministerial Advisory Council on Tourism): I do not. Mr. Chairperson: Please proceed when you are ready. Mr. Johnson: I have been fortunate to be the co- chair of the Ministerial Advisory Council on Tourism, and as such I really am pleased to be here today to support The Travel Manitoba Act. The legislation is a very positive response by the government to the requests from the tourism industry that the government establish a stand-alone tourism agency.

The main reason for creating Travel Manitoba is to provide a much enhanced agility in responding to the shifting tourism market conditions, and more importantly perhaps to facilitate considerably more private-sector input and foster considerable growth in the tourism sector. The industry is a very important contributor to Manitoba's economy. In 2002, the sector contributed over $1.4 billion to the economy representing 4.1 percent of the provincial GDP. It also represents 60 000 direct and indirect jobs.

The Council on Tourism has been working in consultation with the staff from the Tourism division to develop a framework for the new co rporation for Travel Manitoba. Last spring we presented specific recommendations relating to the objectives and governance of this organization. Our vision is to establish a strong corporation that provides leadership in stimulating sustainable tourism growth for the province of Manitoba. The industry has got extremely ambitious expectations for the new organization, and we are confident that the legislation provides the framework for us to achieve the vision that we have.

We are delighted that the government is continuing to support the efforts. Independent consulting services that have been alluded to earlier have been recruited to

May 25, 2004 LEGISLATIVE ASSEMBLY OF MANITOBA 159 develop recommendations for the founding business plan of the organization. This week the consultants are meeting with the stakehol ders in every region of the province to seek their input in the founding business plan. It is imperative that this business plan outline a comprehensive tourism strategy. A strategy that identifies actions to address critical research, mar- keting, product development and training needs.

Ideally the strategy will also outline responsibilities of both the new corporation and government in achieving the goals of the tourism industry in the future. We recognize the need to the members of the tourism industry to find innovative ways to partner with Travel Manitoba in developing the industry. We are confident that by demonstrating success, the new corporation will be able to lever increased invest- ment in tourism. We believe the establishment of Travel Manitoba must be based on a public-private partnership where both government and private sector invest to realize mutual benefit.

We know there are more business opportunities awaiting us from our regional, national and international markets, and the key focus of the new agency, Travel Manitoba, will be to create and take advantage of these opportun ities. We all appreciate the value of tourism to the provincial economy and Travel Manitoba will build upon past successes by working more closely with the private sector to explore better ways to grow this industry. Thank you for your time. Mr. Chairperson: Thank you very much, Mr. Johnson. Are there any questions of the presenter? Mr. Robinson: Well, thank you very much, Mr. Chairman.

Allow me to thank you, Mr. Johnson, again. Your leadership and your insight into the Ministerial Advisory Council on Tourism are something that all of us value in government. As you pointed out, we as a government try to respond to industry's request that they have more input into the delivery of tourism programs in their desire to have a strong vehicle to facilitate partnerships. I believe that you and Doug Stephen, the co- chair, have done a tremendous amount of work along with the 27 other men and women that have served on the Ministerial Advisory Council on Tourism both for the previous minister, Mr.

Lemieux, and then later to myself. I believe that your leadership is something that we value a tremendous amount. At the same time, I think that your advice on the direction we are moving is something that we are very thankful for. Allow me to thank you on behalf of our government. Mr. Chairperson: Thank you very much, Mr. Johnson, for coming to make a presentation this evening. Mr. Carr was called and then moved to the bottom of the list. Mr. Carr, good evening to you, sir. Do you have a written presentation, sir? Mr. Jim Carr (Busine ss Council of Manitoba): I will just read from notes, Mr.

Chair, if that is okay? Mr. Chairperson: Please proceed when you are ready. Mr. Carr: Thank you. Well, first let me say how much a pleasure it is to be back in this building, in itself, I would think, a tourist attraction. They do, after all, come from all over the place to feel what it is like to be inside these walls. I, like so many of you around the table, have lots of fond memories of it. Really, I am here to praise Manitoba and to praise the potential of Manitoba.

At a time when the world is looking for ways of making the most of what they have, it is a time for us to reflect on just how bountiful those riches are. I want to say at the outset that I am here to speak in support of the bill and to make two or three modest suggestions about how I think it could be improved, but most of all to get excited along with you about what it is we are promoting here and how special a society it is we have built.

Just in this city, where we are now, within two miles of here, we have some of the finest cultural organizations in the country, perhaps the finest ballet company in Canada; one of the better symphony orchestras; an opera company; three or four dance companies; and three or four theatre companies. So we should be marketing these cultural riches to all of those who are close enough to come and enjoy them, I would think that that would be a radius of four or five hundred miles, that we have within a couple of hours of this capital city, some of the finest recreational property you will find anywhere in the

160 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2004 region, and that the kayaking on our rivers, the fishing in our lakes, the hunting opportunities, and that we are blessed with natural riches that are the envy of so many in the world. Well, why are not more coming here to take advantage of that? I must say that this is not a failure of any government, either current or preceding, but maybe just a lack of energy.

It is the energy that I think this bill will inject into the whole idea of promoting Manitoba and Manitoba tourism. * (20:30) The assets are absolutely impressive, and, Minister, you will know more than most, of the potential of the northern part of this province. Do you know that Churchill is probably the No. 1 international destination in the Prairie Provinces, that they come from all over the world? It is sometimes very hard to get the accommodation you need to properly look after tourists.

I know that even in my own family and friends, they come from New York City, we know that they come from Europe; they come from Asia because we offer them, in Churchill and in northern Manitoba, a quality of eco-tourism that they cannot find anywhere else. So when they are here, when they have taken that plane ride and when they come through Winnipeg, let us tell them about all of those things that we have here. So, I say that the natural ingredients that we are working with here are really impressive. We have to be a little bit less shy about talking about how impressive they are.

I think that this bill seeks to free up tourism promotion from rigidity, from constraints and, rather, to inject some entrepreneurial spirit into the way in which we see ourselves and the way we know others see us and how we want to present ourselves to the world. The time is right for tourism promotion to become far more important as a priority for this government. I think that the government is on the right road, that this bill will take us a long way to achieving what that potential can be. So I would like now just to make one word of caution before I talk about some specific suggestions.

Members around the table will know that very recently there was a new agency set up called Destination Winnipeg. It is the responsibility of Destination Winnipeg to promote Winnipeg to the rest of Canada and to the world. It has some specific functions, but, overall, it really wants to bring capital and people into the capital city. One of the goals of the agency that you are setting up through Travel Manitoba is to do the same thing.

So the word of caution is let us make sure as we establish these two agencies from scratch, as we have done in the case of one and as we are about to do in the case of the other, that they are complementary and not duplicative. We do not have enough resources to spread around in such a way that two are doing the same work. We ought to be doing the work that is specific to each of them. Three gentle suggestions as to how, perhaps, the bill could be improved. One is the appointment process to the board, Mr. Chair.

I see, in reading the statute, that the appointment of the board of directors is left to the Lieutenant-Governor-in-Council in all cases, that there are thr ee appointees who will represent the government, and the remainder will be reflective of a wide series of interests across the province. They are even articulated within the bill itself. I am just wondering if it would not be wiser, given all of the conversation around western societies about governance, that we ask the government to look at selecting names that have been suggested to it from some of these sectors rather than appointing directly.

I think that way the private sector and those who have a particular interest in the success of the tourism industry in Manitoba can be more involved directly in the work of this agency. There are other ways of doing it. There are models that the government can look at, but I think the one that is presented in the bill is not the best one. There are others that I think could maximize the effectiveness of the way this agency will work.

The second is, there is one clause; this could be just a mistake in drafting; this is clause 13, which gives the board the authority to appoint the employees necessary to carry out the activities of Tourism Manitoba. Well, that should not be a board function, Mr. Chair. That should a function of the chief executive officer, who will be appointed by the board, and that is appropriate. But it should stop there. You do not want a board of directors appointing middle management staff within this agency. They have to be accountable to the chief executive officer, who, in tu rn, is accountable to the board.

I think that can be solved relatively simply. I do not know what the argument would be not to. The third is that, especially when you are establishing an agency from scratch, you will want to give those who make up the board of directors and

May 25, 2004 LEGISLATIVE ASSEMBLY OF MANITOBA 161 the founding CEO the security of some multiyear funding. It is going necessarily to be a process of transition from the status quo to the agency you hope to create, but the certainty of multiyear funding I think would go a long way in giving the kind of security that those involved in the agency will want, knowing that it is fledgling, that it is being created out of nothing, a concept, an idea. I think those are three ideas that I would hope that you would discuss and perhaps even adopt.

The Business Council of Manitoba, as you know, is a group of 61 chief executive officers of Manitoba's leading companies. We argue what we believe to be the public interest. We pick our spots. Members will know that we do not appear in front of very many legislative committees. The fact that we have chosen to appear in front of this one tells you that the Business Council believes that the tourism industry is vital to the future of our province, that there is a potential that has not yet been realized, that this bill will take us along the road to achieving that potential.

On behalf of them, I thank the government and members of the opposition for this opportunity to share some thoughts with you. Thank you, Mr. Chair. Mr. Chairperson: Thank you, Mr. Carr, for your presentation. Questions from committee members? Mr. Cummings: After listening to your opening remarks, Mr. Carr, I was remembering fondly why it was nice to have you in these halls regularly. My question is related to your last comment, or almost last comments about the power to appoint.

A critic has been working on some amendments to that end to try and make it so that it flows in direct relationship to the civil service and the hiring conditions associated with that and appropriate competition for filling positions once it gets past the initial stages. I had a more specific question which would relate to funding. Have you given any thought to what areas you would see revenue coming from, once it gets past the initial stages of start-up money from the Province of Manitoba? Mr. Carr: Well, the co-chairs who have just presented to you would have a better answer to that question than I.

They are in the industry. I know that when you talk to hoteliers, for example, they believe that the potential to attract people into this province has barely been scratched–a simple idea, for example, of making Manitoba the bear capital of the world. Leo Ledohowski is very fond of taking the example of Anne of Green Gables and the power that Anne of Green Gables has had in Prince Edward Island to bring literally, is it billions of dollars or hundreds of millions of dollars into the PEI economy from Japanese tourists?

Well, he will also be quick to tell you that if you look at the revenues that come into the Disney corporation, it is by far Winnie the Pooh that outsells Mickey Mouse and Donald Duck and even Daisy and all of the others. So, if we were to bear down and try to create a series of attractions around the theme of the bear, the Poohseum at the park, making the bear component of the Assiniboine Park Zoo the finest in North America, by leading up to the polar bears in Churchill and creating some niche marketing to Manitoba, that there could be huge revenues that flow into this province.

Certainly, the agency would find one way or another to get hold of some of that money. I am talking about taking full advantage, Mr. Cummings, of a potential that has not yet been realized. There are creativ e people in the province looking at ways of doing that, investing their own money. I am confident that when the pieces fall in place that there will be a big payoff. * (20:40) There has been a terrific spirit of co-operation and wanting to make the best that this can be amongst senior staff of your department, minister.

I want to congratulate them publicly for reaching out to the private sector, for wanting to find the best model, for being candid in sharing what the government has in mind and looking for ways to make it better. It is precisely that kind of co- operation between the business community and the government that will lead to the best model and that co-operatively we can take the best advantage of it. Mr. Maguire: Thank you very much for your presentation, Mr. Carr. I wanted to just go back to one of your other suggestions.

I think it is a very good one in relation to the selection of names to be put forward to the board for the government to look

162 LEGISLATIVE ASSEMBLY OF MANITOBA May 25, 2004 at in establishing the board of Tourism Manitoba. I wonder if you could suggest or if your group has thought through from the Business Council, would that be a group of names presented at random from across the province? I am assuming that Business Council would have a list of areas that they may feel that these people should come from. Could you elaborate on that for me at all? Mr. Carr: Yes, there are a couple of ways of doing it.

One is for the government to say, we think that the ideal board would be comprised of people with these qualities and that they would be drawn from various sectors. You always want intelligent generalists. You should never stock a board so full of experts that there is nobody left that is smart and can think clearly. Perhaps that would be the three repre- sentatives that the government would represent. I am just thinking of two possible ways. One is that the government could say to an association that is involved in the industry, give us a name and we will appoint the person that you think is best.

Or give us three names, that is okay too. What we are trying to avoid is to have the board full of people who are appointed exclusively by the government and who may not have a balance of expertise that is in the best interests of the agency that you are creating. I think it is possible to be creative by delegating part of that authority to others. Let us look at some examples. There are committees that approve lawyers who want to become judges at the federal level. You cannot appoint a lawyer who has not applied to be a judge. You cannot appoint a lawyer who has not cleared a committee.

That is a safeguard to ensure that those who are ultimately appointed have met some kind of test of a standard. So those are two possibilities. I am sure the government, if it has the will to follow that path, can find others. It is just a principle to get the best possible people available to serve on this Crown corporation. Mr. Lamoureux: Mr. Carr, you have in essence answered the questions that I was hoping to be able to ask and have asked other presenters in regard to the makeup of the board, because I too just feel that it is so critical, but having said that, I just want to give my best to you.

You have always been a fountain of ideas. It is much appreciated. Thank you for coming out tonight. Mr. Chairperson: Any other questions for the presenter? Mr. Robinson: Well, thank you very much, Mr. Chairman, and Mr. Carr, thank you for coming out this evening. We always value, of course, your advice on any piece of legislation you speak on. I want to first of all ag ree with you on the world- class rivers that many Manitobans overlook, the Manigotagan, the Bloodvein, the Berens River further up north, the Seal River, the Hayes River, and all the other rivers that we have.

Fortunately, they are all in my constituency as well. We are certainly very proud as well of our commun ity of Churchill being a four-season destination. I want to say, first of all, that this legislation is something that we are not taking very lightly. It is something that has been worked on for quite some time now We have worked with the tourism industry and examined the experiences of other provinces on this. The concept has resulted in a Manitoba approach, we believe, in this growing area of the economy and it continues to grow and to prosper.

I think we have adopted the best practices from Tourism B.C., Tourism Saskatchewan, Travel Alberta along with the Canadian Tourism Commission. The research that we have done has told us that success is dependent on a partnership between the public and private sector, one that is based on a joint strategy for growth and where both government and business have shared investment in development and marketing programs.

We anticipate at the outset that the government will maintain its current commitment to funding tourism by $8.6 million in the 2004-2005 year, and that Travel Manitoba will receive an annual grant from the government to support the activities outlined in the business plan. Further, there will be some one-time cost factors that will be involved of course in the transitional period.

I want to say, right at the outset, the three recommendations that you have provided to us certainly I will take under advisement the appointment of the board, but I want to say that this is quite reflective of other agencies that operate

May 25, 2004 LEGISLATIVE ASSEMBLY OF MANITOBA 163 within government. An example would be Manitoba Film and Sound which the previous government had created in 1998 and that appears to be doing quite well. It has grown that industry from around $19 million annually to over $100 million today. So we believe that this has the same opportunity. The board make-up is quite similar to what we propose here and, again, the advice that we have received from the Ministerial Advisory Council on Tourism. Further, 13(

a) and (b), this is something that the critic, the honourable Me mber for Morris (Mrs. Taillieu), and I have talked about, and I will be talking with her, a possibility of an amendment is something that we can consider in that regard because it is not quite clear, but I think, if I could just tell you this, Mr. Carr, that we are open to that. On the issue of multi-year funding, I think I have addressed that previously in my response with respect to how much the government funds tourism in the province of Manitoba. Multi-year funding is something that we will take into consideration.

But the three areas that you have asked us to con- template, I want to assure you that we will certainly do that. Let me conclude my remarks by thanking you, Mr. Carr, for your ongoing advice and sometimes very blunt suggestions on where you see us as a government improving ways in which we, hopefully, enrich the lives of our fellow citizens in the province of Manitoba. Thank you very much for appearing before this committee tonight. Mr. Chairperson: Thank you very much, Mr. Carr. That concludes the list of registered presenters.

Are there any other members of the public present here this evening who may wish to make a presentation to this bill? Seeing none, then that concludes the list of presenters to Bill 24 and for Bill 12. Does the committee wish to proceed with clause- by-clause consideration of these bills and if yes, in what bill order does the committee wish to proceed? An Honourable Member: Numerical. Mr. Chairperson: Numerical order has been suggested. Is that the will of the committee? [Agreed] Bill 5–The Manitoba Public Insurance Corporation Amendment Act (Claimant Advisers) Mr.

Chairperson: Does the minister responsible for Bill 5 have an opening statement? Hon. Greg Selinger (Minister of Finance): No. Mr. Chairperson: Thank the minister. Does the critic for the official oppo sition have an opening statement? Mr. Glen Cummings (Ste. Rose): In this bill and others, would the minister be prepared to answer a question or two about the intent? Mr. Selinger: Sure. Mr. Chairperson: With leave of the committee, we would ask for your indulgence in allowing questions to occur at this point during the opening statements rather than clause by clause.

Is that the will of the committee? [Agreed] Please proceed, Mr. Cummings. Mr. Cummings: My questions around this very simple bill, my questions are only for some clarity because it is structured the way it is, as an amendment. The hiring of claimant advisers, can the mini

Document details

Collection	Manitoba — Debates (Hansard)
Citation	38-2-la05
Type	hansard
Volume / chapter	38th 2nd hansardpdf la05.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	0f617acbe08794c014a043a6370f8456d4d17b59

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