Manitoba Hansard — 8 May 1975 (Sitting 78, 30th Legislature, 2nd Session)

30-2-78

Manitoba — Debates (Hansard)

THE LEGISLATIVE ASSEMBLY OF MANITOBA 8:00 o'clock, Thursday, May 8, 1975 COMMITTEE OF SUPPLY - DEPARTMENT OF INDUSTRY AND COMMERCE 2255 MR. CHAIRMAN: Resolution 68(b)(l)-- passed; (b)(2)--The Honourable Member for La Verendrye. MR. BANMAN: I was just wondering if the Minister could explain the decrease in the amount of Other Expenditures in this particular. I notice that we're dropping by about $20, OOO. Has there been a transfer of some responsibilities to another department or are we sort of taking a little bit of a cutting as far as the food industry is concerned? MR.

CHAIRMAN: The Honourable Minister of Industry and Commerce . MR. EVANS: Yes, Mr. Chairman. You notice this is a characteristic of a number of these items. There has been a reorganization in the department effected a few months ago which of course is reflected in the expenditure pattern in the forthcoming year. A number of staff have been transferred to the Small Business Assistance Centre and into management or productivity activities. MR. CHAIRMAN: (b)--passed. The Honourable Member for Birtle-Russell. MR. GRAHAM: Mr.

Chairman, the other night I commenced to ask some questions about the question of dead livestock and the problems that occurred when the Department of Industry and Commerce encouraged, and the Department of Agriculture encouraged a prog ram, and at that time I was told that probably the best place to raise this was under the Food Industry

section of the estimates. I somehow find that difficult to place that in my own mind but if that's where the Minister wants us to talk about it, I'm prepared to live with that now. Mr. Chairman, at that time I was concerned about a program that was instituted in the province where individuals were encouraged to go into a program of collecting dead animals, processing or cutting up the meat and a market was established in the Montreal-Toronto area as well as in B.C. I don't believe too much of it was actually canned in this area. It did two or three things.

It certainly met with the approval of the Environment Commission to which considerable concern had been expressed over the prevalence of dead animals lying around the country. This way they were at least disposed of in a manner that met with their approval Since that time, sir, the market has practically disappeared completely in Eastern Canada and these people are now being almost forced out of business. We are going to be back in the position where the Environment Commission will be concerned once more with dead animals being left around throughout the country.

I was wondering if the Minister had any program or if he could offer any inducement or encouragement for these people to carry on during this period which may be temporary, may be permanent in which there is no market but in which we are doing a great service to our environment in removing these dead animals. I was wondering if he had any program to encourage these people who are now being forced out of business. MR.

EVANS: Well I'm not aware perhaps as much as my honourable friend is about the certain people that are being forced out of business but I can tell you that there is con sideration being given to a system of dead animal collection throughout the province. This will be part and parcel of an environmental management program, and the main emphasis of course is to remove a form of pollution from the countryside which seems to be increasing in some ways with the increase in the animal population, livestock population and so on.

This is a program that is bdng worked on and when the final details of the program are completed, they will be announced of course. However, this is a matter that's I believe under the juris diction of the Minister responsible for Environmental Management and also the Minister of Agriculture. MR. GRAHAM: Well, Mr. Chairman, I can readily understand the Minister's reluc tance to address himself to this problem.

It's something that I wasn't surprised at but at the same time the fact remains that these places have been established, they are now either closed or in the process of closing and I would hope that the Minister would use his good office to expedite a program, whether it be through his department or through the Department of Agriculture or through the Department of Mines and Natural Resources, I couldn't care less, but something has to be done. If something is going to be done it has to bee done now becausce

2256 May 8, 1975 SUPPLY - INDUSTRY AND COMMERCE (MR. GRAHAM cont'd) ..•.• the problem is immediate and if we wait for another month or two months, there will be no industry left and we're going to have to start from scratch all over again. MR . CHAIRMAN: Resolution 68(b}-- The Honourable Member for Brandon West. MR.

McGILL: I can't let this item on Food Industries go by without reviewing what the Minister said about the matter of the possible expansion of Morden Foods owned entirely by the Province of Manitoba and the possibility of other food industries coming into the province, and the fact that the department is reviewing at the moment two or three possibilities, I think that was what the Minister said. Mr.

Chairman, in an earlier item we discussed the difficulty which the province and the department niust find itself in when it is providing incentive grants to industries when the industries in the field may be not only those which the department has an equity position but also industries which are competitive with those that the government owns. I'm wondering, Mr.

Chairman, if the Minister can tell me whether there is any conflict within his depart ment when an application is received from a food processing operato r who is considering the possibility of a plant in Manitoba, when such an application is received at the same time as the Morden Fine Foods who are owned by the province are considering expansion which might be, in a sense, competitive with the other applications. Mr.

Chairman, I would find this to be a very difficult situation to deal with if I were in the position of the Minister, and I would wonder how it would be possible for him to take a completely objective view in this, or for his department for that matter, if they're consider ing an expansion of their own plant, to deal in an entirely fair and objective way with some other applications or some other inquiries from manufacturers who are looking at the Manitoba situation.

Is it possible to deal with those two situations at the same time without having some bias in the matter, and this is just an example of the kind of thing that I think we're developing for ourselves in this province the kind of situation which may be repeated many times over unless some decision is made, some direct approach is made to this prob lem. I would certainly like the Minister to again give me the reasons that he has perhaps stated in the previous discussions of this matter and tell me how he can deal with this situa tion without some bias or some prejudice entering into the whole negotiation. MR .

CHAIRMAN: The Honourable Minister of Industry and Commerce. MR. EVANS: Mr. Chairman, I want to make it clear that the type of expansion that is being considered at Morden, with regard to Morden Fine Foods, into the frozen vegetable business or to have had a frozen vegetable capability, is a type of process that to the best of our knowledge no one is now seeking to establish in the Province of Manitoba. So that on the specifics there is no problem. And I think in the general this is a non-problem. This is the thesis that the honourable member pursued yesterday and is obviously attempting to pursue again today.

The fact of the matter is, Mr. Chairman, that I suppose if one were wanting to philos ophize, the reason that there was a Department of Industry and Commerce set up here many years ago, many many years before any of us entered into the political arena, and the reason that a Manitoba Development Fund now call the Manitoba Development Corporation was created was surely because the governments of the day did not believe that the amount of in vestment forthcoming into industry and into commerce from the private sector was not as great as it co-uld be or should be.

Surely there must have been a feeling on the part of gov ernments o-f the day that government per se had a responsibility to do something to stimulate the industrial and commercial development of this province.

And whether it be by way of a lending agency or by way of an industrial development agency that engages in market research, feasibility studies and all the other programs that we now pursue in the Department of Industry and Commerce, regardless, the fact is that we believe, and I think governments prior be lieved, that private enterprise left to its own, purely left to its own in a pure laissez-faire fashion, would not develop enough jobs in the Province of Manitoba to give our people the opportunities to stay here if they so wished.

And I think it's the system that has now de veloped in our western economy where you have ever increasing concentration of industrial activity that has worked against historically the last many decades, has worked against the industrialization of Manitoba and Saskatchewan and Alberta and other similar geographic areas in North America. You look to the states to the south of us and you see the same trend

May 8, 1975 2257 SUPPLY - INDUSTRY AND COMMERCE (MR. EVANS cont'd) •.... that has occurred, a diminution in their relative position. In fact what has occurred south of us is far worse than what has occurred north of the border. I think that I would like to have seen a greater rate of industrialization in Manitoba but I look south of us and I see in the Dakotas, Nebraska and so on an actual diminution and deteriora tion in their relative industrial capability. The large investor, the large company, the multi-national company tends to be pre pared to locate plants anywhere in the world.

Very often in the secondary sector plants are located near large markets, and the fact is that - and I've said this many a time before, - we do not have the size of market in Manitoba that is sometimes conducive to attracting certain types of secondary industry here. And what happened at Morden, you know, is a classic example. You know I think the government of the day, I think it was even before the now Leader of the Opposition who was former Minister of Industry, I think it was even before his time, when Canadian Canners set up the plant at Morden. Was it during your time when they established the plant? MR.

SPIVAK: Prior. MR. EVANS: It was prior. Yes, that's what I thought, that's what I'm saying, it was established prior to the Member for River Heights being the Minister of Industry and Com merce and the fact is that Canadian Canners for their own good reasons withdrew from Manitoba because their accountants told them that they can make a greater return on their dollar by having a concentration of this vegeta ble canning in Hamilton, Ontario. They were making money here but they could make even more money by concentrating down east. That, Mr.

Chairman, is the dilemma that is facing us, and it's a dilemma that we face when we rely strictly on the private sector in many industries. And you can't fault - I suppose you can't fault the management, the President, the Chairman of the Board of Canadian Canners for doing what they did. If I was in their posi tion I would have perhaps done the same thing, because if it was my job to maximize profits that's what I would have to do. But what is good for private enterprise, large scale enter prise, and what was good for Canadian Canners is not necessarily good for Manitoba.

There is a conflict and this is not to our advantage, the fact that industry is tending to concentrate near large market locations. And if we left it simply to the so-called laissez-faire process, we would have even less industry in Manitoba today than we have, if it was left strictly to laissez-faire. And the only reason we have a package seed plant in Brandon is because of government decisions. The only reason we have Morden Fine Foods in existence in Morden is because of a government investment decision or through an agency of the government and so on.

The fact is that I wish the point that the honourable member brought up was a real prob lem in the sense that we had so many people coming in and the government through the MDC or what have you getting into the act was sort of somehow or other preventing the flow of private investment.

Because I have no evidence of that, I have no evidence where the activi ties of the government either through MDC or through the Department of Industry and Com merce in the investing, in manufacturing, in the secondary industry field, in commerce, what have you, has caused a basic industry to not enter the province or to leave the province. Okay, the honourable member's going to jump up in his seat and talk about Autopac. That is an automobile insurance program which governments traditionally are getting into, govern ments are getting into the insurance field.

The Federal Government is the biggest life in surance company in Canada today, because it runs the Canada Pension Plan. Don't kid your self that that isn't a government life insurance program, it is. The Canada Pension Plan is . A MEMBER: It isn't very sound actuarially. MR. EVANS: It's not very sound actuarially. Well I don't know, but I know a lot of people who are very pleased that there is such a thing as the Canada Pension Plan. MR. SHAFRANSKY: Private business is not ripping off, therefore it's no good MR. CHAIRMAN: Order please. MR. EVANS: At any rate, Mr.

Speaker, as I understand it u·, and I Lmderline "if'' because there is no decision made on this and it may not go ahead, but if a frozen vegetable capability was added to the Morden plant it could - rather than be a detriment to other de velopments in the food processing sector it could act as a catalyst and perhaps promote and

2258 May 8, 1975 SUPPLY - INDUSTRY AND COMMERCE (MR. EVANS cont'd) ••... stimulate certain ancillary developments in the private food processing business. MR. CHAIRMAN: The Honourable Member from Brandon West. MR. McGILL: Mr. Chairman, I won't pursue this debate but I just take from what the Minister has said that he can wear three hats without any difficulty. He can be in the indus trial development of Manitoba, he can be a promoter, a regulator and an operator, and that none of those three functions in any way overlaps or reflects upon his full and objective per formance in the other. That is, in my view, Mr.

Chairman, an amazing feat if this can be done with objectivity and ••• MR . CHAIRMAN: Order please. MR . McGILL: Mr. Chairman, if my

interpretation of what the Minister has said is a correct one then I will assume that that is what he is capable of doing, that is what his gov ernment is capable of doing without any difficulty whatever. MR . CHAIRMAN: The H�nourable Minister of Industry and Commerce. MR . EVANS: You see, Mr. Chairman, the problem that the Honourable Member from Brandon West has, and I think the problem some of his colleagues have, is that they have ideological blinkers on them.

You know theyrre true Conservatives - I'll have to be careful here because I know some Conservatives historically at least have been very very great on government involvement in industry, that is in historical setting. But the Conservative party that we see today in Manitoba at least he's being true to the very narrow-minded ideologically constraining view of industrial development vis-a-vis ownership.

Because you think in your heart, and I don't fault you for your philosophy, you're entitled to it, but I say you are the people that have the ideological blinkers on because you think that the only way we should create jobs in Manitoba, the only way we can create viable enterprise in Manitoba is through private ownership. And we're saying that we can do it through government owner ship, we're saying we can do it through co-operative ownership, because we've set up a co-operative development department, and we're saying we'll do it by trying to help the small and medium size private enterpriser in this province.

We're saying, we're not narrow minded, we don't have ideological blinkers on and say that the only way you can create jobs is through the public sector. We're not saying that. We're saying that we're living in a particular economic situation in North America at this particular time that demands that the peoples' provincial government, the provincial government of the people of Manitoba use various techniques in order to provide jobs for its people.

And you know you can have mass ive giveaways if you want, as was the case under your jurisdiction prior to this government coming into office in 1969, yes you can and you can get some things happening. But what I'm suggesting, Mr. Speaker, is that there's plenty of evidence that the previous Conservative government financed projects in this province up to the tune of 100 percent, and who knows maybe over 100 percent. We have the evidence. In my own con stituency.

I think it's an efficient enterprise, it has come along, the Simplot Fertilizer Company, the evidence is quite clear that Jack Simplot, that great private enterpriser, and I remember him making a speech the day that he announced it in Brandon, I was invited to the dinner, it was a free dinner, and he waxed eloquently of how governments should stay out of business. And my God here I find out a few years later when we got the documentation, that it wasn't Jack Si mplot' s money that developed that fertilizer plant, it was the peoples money, it was the peoples money. A MEMBER: What a dinner. MR .

EVANS: Yes, and the dinner was paid for by the taxpayers also and not Jack Simplot. Same people. And we're not kidding about it.

But here's the case of what I would call, if you want to use the term, •disguised' public investment, disguised public investment, only that's the worst kind of public investment because it's sort of tails you lose and heads they win, doesn't matter which way, in the sense that if the enterprise went bust then it was your money that was lost, but if the enterprise succeeds then the profits go to that particular corporation that received 100 or maybe 105 percent or whatever it might be, because I'm not only counting the MDF funding I'm also counting the grants received from the Federal Government, the Industrial Incentive Grants and which were cash grants.

And I can under stand the government of the day, as I said, being very anxious to develop jobs, You know they had the MDF and they ... But I say that we're not afraid of helping private industry,

Ma y 8, 1975 2259 SUPPLY - INDUSTRY AND CO MMERCE (MR. EVAN S co nt'd) ..... because we are helping private enterprise through fre Depart ment of Indust ry and Co mmerce and thro ugh some ot her programs . We don't J-ave blinkers on, we're not ideologica lly J·ide bound as the ronourable members across think government shoul d be. You know tbat's all .

And again I repeat, you know you peo ple are upset because tr.ere is some public invest ment in man ufac turing and I tell you tl·at-trat today is becoming more t! e rule than the exception, and all you' ve got to do is look at Western Europe and you look at democra tic co untries in Western Europe that don't necessarily !-·ave a so-cal led "S ocialist" government either, there are some right wing governments in Europe that bave es tablished manu facturing enterprises owned by the State. And you can have that in some of these Latin-American dic tator ships, you can have st ate-run enterprises as well.

I'm just telling you that ths quest ion, as I said the other night, the whole question of state ownership of indust ry is not necessar ily a question of philosophical dis pute. But what I'm saying is that we are trying our best --(Interjection)-- it shouldn't be, it may be in your eyes, it's not in my eyes - we're trying our best to create jobs for our people.

And particularl y in rural Manitob a and particu larly in areas which we think there are - well particula rly in areas where we think there are ... wel l, you know, you wouldn't have the . .. well I' m not going to go into all these details again, but the fact is that regardless of whether it be a private do llar or a dollar from a public investment agency, if you're crea ting jobs and helping to create wealth in the province I'm convinced that the people of this province will be satisfie d .

I think the people in my own const ituency appreciate the fact that this gover nment stood behind McKenzie Seeds and has ma intained an operation there and has given hundreds of jobs in the Cit y of Brandon that would not exist otherwi se. So I say again that my friend from Brandon West is talking abo ut a non-problem when he talks ab0ut scaring off private investment dollars, because the private investment dollar into the se condary sector was pretty darn scarce when they were in government and I can shqw you lots of figures on that and we'd like to se e it more abundant today than it is.

And the reason it is is because of the economic facts of the sit uation, it wasn't because ou r honourable friends were in gover nment at the time that they happened to scare off the private investment that was wanting. And Manitob a was wanting for new jobs in the 1960s. The Government of Manitoba was, figur atively speaking, on its knees begging for jobs and I think this is ultima tely why it got into the CFI fiasco . MR. CHAIRMAN: The Honourable Leader of the Opposition. MR. SPIVAK: Mr. Chairman, I just don't !mow how I can read the argument presented by the Minis ter of Indus try and Commerce.

The profound statem ents that we on this side are mo re or less lim ited on the basis of our ideological blinkers and that he has, you know, the pers pective and the dimension of what's happening without our soci ety within this province is almost overwhelming.

You know, our problem right from the very beginning is that the Minis ter is a very fooHsh person who talks fooli sh rhetoric about a series of events, about a series of events, a series of events now and in the past, whose chronology is not as he tries to su ggest and whose res ults are far more sub s tantial in ma ny ways than the results he woul d like to present to the me mbers here.

Our concern in the very be5inning has been an unders tanding of exactly the direct ion and the emphasis that the government is going to take with res pect to. its involvem ent, by the involvement at least of the public sector in the commercial business activities in this province and the way in which it would create and attem pt to try and build the clima te and ma xim ize the opportun itie s that really exist within this province for future developm ent.

And we're very much aware that in the food processing indus try there are unique opportunities for this province and that if it's to be developed, it has to be devel op ed with the expertise and the ma rketing ca pability of ma jor national and mu lti-national corp orations who are capable of bringing their expertise, their rese arc h to the new processes that are developing to util ize our agricultura l resource.

Now no one is gomg to take away from the fact that there was an attem pt to try and sa lvage Morden Fine Foods but, you know, that is only one part of this whole equation, and one must say to the Minis ter that we recognize that for whatever reason Ca nadian Ca nners, as a private enterprise organiz ation, made a decision to close up a plant that they felt was not in a position, to close up a plant which they felt coul d, whose produc tion could be better reproduce d from one of their exist ing operations, with or without an expansion, and I don't even know

2260 May 8, 1975 SUPPLY - INDUSTRY AND COMMERCE (MR. SPIVAK cont'd) •••.• whether that was to take place.

But I must say to the Minister in the negotiations that took place between the government of which I was a Minister and a Minister of Industry of Commerce at the time with Canadian Canners for the purchase of their assets, the price we were dealing with was one-fifth of the price that the Minister paid for it, one-fifth of the price that he paid for it, and I find it very strange for him to stand up and to indicate that, you know, he assumed a responsibility that in fact it really commenced in terms of negotiations at an earlier stage when we: were govern ment.

But our problem right now, and this is a very serious problem, is to understand whether the operation which is now making money or at least breaking even and maybe making some cash profit and thus accomplishing the objective of maintaining the industry, whether its expansion will in fact prevent the possible development of a major enterprise in this province. And the thing that is concerning to us, I think, is to understand the logic of the government and really understand their ideology with respect to this expansion.

The Chairman of the Manitoba Development Corporation this morning, on his own, with out any prompting or even discussion, suggested that the operation could be, the expansion could be in competition with a company whose name has been mooted several times, of the possibility at least of that company coming to Manitoba. And I may say that I think it's common knowledge that development would be a $50 million development if it was to come to Manitoba. That• s a substantial investment with substantial implications for the province.

Now whether this is true or not, I don't know, but the Chairman of the Manitoba Development Corporation mentioned the company's name. The problem we have is to understand the logic of the government in its expansion, --(Interjection)-- the name is McCains - and the thing that we find a bit surprising at this point is if there is any possibility, that why would the govern ment consider expansion in a very limited way which would possibly in fact compete. That's something we'd like to establish. But then there are a couple of other points that are involved in it.

We understand as well that in the application, there was an application to the Federal Government for a DREE grant of a $1, 500, OOO, the expansion being $3 1/2 million, a DREE grant of a million and a half, that is Federal Government money being asked to be put in to a Provincial Government enterprise, public enterprise. So when I hear you sort of make remarks about Simplot and about the way in which he funded out, and the way in which he received loan and grant money from the Federal Government, I say to you, who are you to start criticizing?

Who are you to start criticizing private enterprise if it is in fact receiving grants from the Federal Government when the chairman has indicated that the Provincial Government isn't going to proceed with a development that they think is necessary, unless the Federal Government gives 33 1/3 percent of the requirement by way of grant. We already know that there's an application of the Federal Government for Crocus Food for a DREE grant. So, you know, the question of ideology becomes very hard to determine here and the question of motive becomes very hard to understand.

And the question was put as to whether there is logic in the expansion of Morden without the grant coming from the Federal Government, because if the plant is something that's worthwhile surely the Provincial Govern ment would put it in. One has to see the millions being put in other developments and if this one is going to be able to make a profit and this one is necessary and this one can be justified, then one would think it would continue on without a DREE grant.

But the information supplied this morning, as I understood it and I think I'm correct, is that no such event would take place unless the DREE grant came forward, that was the condition on the application. And on the basis of what happened this morning, it would appear that the Crocus Plant will not go through because the condition is that without the grant it would not proceed. So in terms of our industrial development there are strange turnabouts and it's not easy to identify people into ideological slots as the Honourable Minister wants to suggest.

When one talks about McKenzie Seeds and the purchases of the two companies, you know, even those purchas0s have never really been fully discussed without this Legislature nor the implications of the negotiations that took place in the purchase of those companies.

And the fact that in one case, as I understand it and the Minister can correct me, a purchase was made with individuals selling prior to, I believe, valuation day or right after valuation day, in which in effect payout was over a period of time to allow the individuals the opportunity to effectively make a capital gain for themselves so there would be no tax payable, and the government co-operated in that.

Ma y 8, 1975 22 61 SUPPLY - INDUSTRY AND CO MME RCE (MR . SPIVAK cont'd) •.•.. The Provincial Gov ernmen t co-op erated in that kind of negoti· ation to basic ally maxim ize the advantage for the peop le who were selling and in effect, legally, to allow people to avo id paying normal taxation to the Federal Gove rnment.

Now one hears these particular facts, one relates the experience that we have had so far, he has cert ain information, recognizes that there are a number of public enterprises that are in fact losing money and appear to be continuing to lose money and that really very little information has been given, except optim ist ic expectations of what will happen, all of which have in the past proved to be very false, or have proved to be bad errors in judgment.

And one has to say to the Honour able Minister, you know, when we talk abo ut the econ omy of this province and we talk about food industries which es sentially are im port ant to our fu ture development, we have to be concerned what is happening to the private sect or into the gove rn ment 's intrusion into business.

We have to be concerned about, you know, where we' re going and we have to be ultim ately concerned as to what is going to happen, and our problem at this point is that there' s no evidence to indic ate that in wearing the three hats that the Honoura ble Membe r for Brandon West referred to, that the Minister is ca pable of basicall y judging effec tively the position he has to take in every position that he finds himself wearing a different hat.

You know, and I come to something pretty basic at this time - the statist ical data, the econ omic indicators indic ate that in the private sect or we are down subs tantially in capital re pair investment forecast for this year .

And I daresa y that when the next statistical informa tion is forthcoming it will even be down more and one that has to say if that is happening and the private sect or is in fact going down, then su rely, su rely --(Interjection) -- Yes, the private is going down . • . su rely at this point, if that's the case, sure ly if that's the case that it is going down, then one has to be basica lly, you know, con-cerned and prepared to deal and talk about in this Legisl ature the direct ion the econ omy is going. And therefo re, Mr.

Ch airman, I say to the Honour able Min ist er, I think that the fight about ideological blinkers which is some thing that he woul d like to bring up at this point as a me ans of effect ively stopping the criticism being offered about him and about the de partmental activity which he's undertaken, as I su ggest the departmental activity which he's undertaken is not some thing that is met just by that simple argument; that the facts and an unders tanding of the events are im portant, and that the record by any means is not clea r, and the failures of the gove rnme nt, the public enterprises entered into by the gov ernmen t, a re so serious as to warrant whether the effort and the time, the energy and the money has in fact been warranted, and whether it wouldn• t have been better in the long run to have cre ated a clim ate in which private initi ative would have been able to flourish and to develop and to allow the ma ximiza tion of the op portunity in that way.

And the problem that we see is that the continued direct ion and the continual activi ty, in ma ny cases the lack of activity on the part of the Minister, is goi.ng to co ntribute to a de terior ating sit uation with respect to the opportunities that exist in this provi nce, and those op portunities in ma ny res pect s are limited, but neverthele ss the opportunities we have to maxi mize within the sphere of those limited opportunit ies are pote ntial.

And to that extent, there has been, I believe, a failure, and I sug gest again to the the Minister that it' s fool ish to try and bring the argum ent down, as he has, on the ideological basis. It doesn't wash, it will not sta nd, and the facts are not su pportive of his position. MR. CHAIRMAN: The Honour able Minister of Indust ry and Commerc e . MR. EVANS: Mr . Ch airman, I did not start this debate on ideological positions.

The Honour able Membe r for Brandon was the one who raised this concern, you know, about possible conflict, and I get the feeling that no matter what type of industry it is, if the public sector is involved then it's some how or other bad or secon d rate.

And as far as I'm concerned and, I think I' m right on as far as the average Manitoban's concerned, the average worker' s concern ed, they don't really care whether the sh areholde rs are somewhere scattered over North America or wherever, or whether the taxpayers --(Interjection)-- Well, you go and talk to the people who work at McKenzie Seeds, or go up to Gimli and talk to the people at Saunders. MR. CHAIRMAN: Order please . MR. EVANS: They don't want us in at Girnli, eh? Okay. The average worker su re doe s. --(lnterjection)-- MR. CH AIRMAN: Order. The honour able memb er has had his say.

In due course he will be recognized again. MR . EVANS: Well, Mr. Ch airman, just a coup le of points. I am now advised,

2262 May 8, 1975 SUPPLY - INDUSTRY AND COMMERCE (MR. EVANS cont'd) ••••. apparently we have been dealing with the McCain Company, which you've now mentioned and we are talking about them, and we are looking at a different element here. The expansion of frozen vegetables from Morden, I understand, are for the institutional market, a bulk market,

whereas the other is for the retail trade. But so what, you know! You extol competition, you extol the virtues of competition in one breath and in the next breath you seem to be damning it, that there's a possibility of competition here. We, from our point of view don't see any problem. But at any rate, Mr. Chairman, on the matter of the value of the assets of Morden Foods, I'm not apprised of what the Honourable Minister may have verbally discussed with the company, that's not information that I have available. All I know is that the staff of the MDC at that time made what was a reasonable offer for the assets.

A,; a matter of fact there was one offer made for the assets by a non-governmental group and the company laughed at them and was about to take the various bits and pieces of machinery out of the plant and move it to Hamilton, they were going to cannibalize the plant. So much for the so-called low offers. The member, I think he said one-fifth. Well that's just nonsense. It's just nonsense because I know the offer that was made was greater than one-fifth what we paid and they laughed them out of the office, and they were going to move the machinery to Hamilton. Well you can shake your head.

But, you know, you have the advantage because you say you discussed this and you have this informa tion, so I don't know what you discussed. At any rate, I know they were going to move a year before, I know that. Mr. Borden, the president of the company, said they were going to move in 1968, they were going to move in 1968 I think it was or 1969. Somehow or other they were persuaded to stay at least one more year and the department went out and tried to sell some of their merchandise, I think, but I'm not sure of that.

Well let it be clear though that on the value of the assets and the reasonableness of the purchase price, I just don't accept the honourable member's criticisms in that respect. With regard to his concern about the fall off in investment, we don't have, to my know ledge, a breakdown between the private and public investment forecast by Statistics Canada. As Pm advised, the outlook that we have for 1975 is a combined figure. Do you have the information that separates it between private and public? Well I don't, all I've got is the combined .information and I thought that that was the latest information available.

I don't know whether any of the staff upstairs realize that there is, and I wish they'd be listening to me at this point. The Manitoba Bureau of Statistics may be able to tell me whether there is this outlook information of private versus public investment outlook, the forecast for 1975 . The only information I have is a combined figure, public plus private, in the outlook for 1975. That• s the only information I have.

But at any rate, as I said before, the public investment dollars is as good as the private investment dollar; in some cases it can be more valuable, particularly if it's into the basic resource development area. In the case of Manitoba, I indicated that there was to be an increase of 10 percent in the level of capital and repair expenditures in totality, public and private investment in the year 1975, over the year 1974, a 10 percent increase, giving Manitoba approximately its normal share of the total Canadian investment picture.

When he casts about his fears about a slump and a fall off in investment in Manitoba, I simply say to him, please, Mr. Leader of the Opposition, look about you, look down south, look in the east, and you will see that there is a major economic recession going on in the United States of America; and he knows that.

You know, for him to go on and blithely say, well we've got to worry about this, that, and the other thing, the fact is that we've had this government in power for five and a half, six years, and we've had more prosperity, particularly in the last three years, than we've ever had I think since before the First World War, in relative terms. In fact our problem has been in order to find enough people to fill the various jobs. As a matter of fact there are still factories around Winnipeg who have big signs up, Help Wanted, layout men, welders, and so on. I know we're very short of people up north.

The mining companies are still advertising; they were advertising on the radio this morning: "Come up and work for us. We need you." All kinds of jobs. --(Interjection)-- Yes, come up and work for us, you know, lovely communities up north, very friendly atmosphere up there, modern convenience, and so forth and so on. Come and work for us. We need you. As I said, there are still factories - I know one factory that I passed the other day, they had a big sign out, Help Wanted, Help Wanted, and I submit, Mr. Chairman, that that big sign, that symbolic sign of Help Wanted is not found today in the United States.

May 8, 1975 2263 SUPPLY - INDUSTRY AND CO MMERCE (MR. EVANS co nt'd) •••.. And it's not found in Ontario. And it's not found in the Mari·· times. To su ggest that because of the policies of this gove rnment that all of a su dden there' s going to be a major economic crisis or a major decl ine in industrial deve lopment because of our policy, is simpl y, well to use his type of phraseology, simply will not wash.

If he would recognize that there is a major slump in the private sect or in the United States, he will - and I would venture to predict that in the United States of America, that bastion of free enterprise, that there's going to be more gove rnment involv ement in the econ omy in the years ahead, and that's already been announced by the American administrat ion.

At any rate, I' ve now received some more information on this potato proce ssing business and from the information I have it seems more than ever before there is no conflict and as I said, even if they were producing the same thing, what,.s wrong with comp et ition. MR .C HAIRMAN: Resol ution 68 (d) -- passed. (c) (10 -- pass ed. (c) (2) .•. The Honour able Member for La Verendrye MR. BANMAN: I noticed again that under the Other Expenditures there has been a drop in budgetary requireme nts and I'm wondering again if the Minister could outlin e what has happened.

Has there been a reorg anization within that department also? MR. CHAIRMAN: The Honour able Minister of Indust ry and Commerce. MR. EVANS: Yes, Mr. Speaker, I me ntioned a few minutes ago that this applied to all of these items. There has been a reorg anization and certain economies effected in staffing and that's why the figure s are down. MR. CHAIBMAN: (c) (2) - Pass? The Honour able Leader of the Oppos ition. MR.

SPIVAK: I wonder if the Minister is in a position to deal with the auto agreement with the United States in reference to ma chinery and equipment, and we'll be talking I guess under trade develop ment as well, with reference to the potential changes that can occur which would affect our farm ma chinery indust ry, whether he has any knowledge of what likely is to take place within this next fisca l year, if anything. I mean whether there are any danger si gnals for the industry and for the provi nce. MR. CHAIRMAN: The Ho noura ble Minist er of Industry and Co mmerc e . MR.

EVANS: Well I don't have that information offhand. I sup pose we could do a study and we could talk to some of the agricultural implement com panies, but as I said the ot her day, in general terms, the ma nufacturing industry in Manitoba has been su s tained because the bulk of its mark et is in the prairie region and as long as there are high income flows into farming and into the ot her resource indust rie s, this will tend to sust ain our ma nufacturing indust ry which is still ess entfa.1.ly geared to the prairie market. I can't spea k precisely for agricultural imp lements, I don' t have that information.

MR. CHAIRMAN: The Honour able Le'l.der of the Opposit ion. MR. SPIVAK: If I underst and you correct ly, you're su ggesting that in terms of the farm im plement business that the major portion of the marketing of the product is in the prairie region and not in the United States? --(Interjection)-- But we have some sub stantial invest me nts in farm ma chinery manufacturing with a number of people who are emp loyed there, and my unders tanding is the ma rket, to a large extent at least , the growing ma rket is in the United States.

And again, I wonder if the de partment's in any position to give an as ses sment of what the implications will be if the auto agreement is changed. We are aware of what the im plica tions are for Eastern Ca nada and we know the problems that have occurred in the United States during its rece ss ionary period.

Now, my concern woul d be to de t ermin e whether any monit oring of the sit uation is taking place, whether there are any danger signals, and, you know, what represe ntation, if any, the gove rnme nt's ma king in connection with this, because any re al si gnificant change could have a direct effect on emp loyme nt in this province. MR. CHAIRlVIAN: The Honour able Minister of Indust ry and Comme rce. MR.

EVANS: Well , I am advised that we're meet ing with a large group of federal of fici als on trade problems next week, but more specUically about the conjecture, I would say that the trade in agric ultural implements, I would remin d the honourable memb er - or correct the honour able memb er - that does not come under the Au to Pact agreeme nt, the exchange in agricultural ma chinery. That is under free trade arrangeme nts between the two cou ntries. Well, that's what I'm told here . Is that correct?

It's our inform ation that agric ultural ma chinery goe s into the United States free regardless, it is not governed by the Au to Pact trade agreeme nt. --(Interjection)-- Parts . No, I don't think so. Unless they're interchange- able parts, like for trucks or some thing like this, but as far as comb ines are con cerned or,

2264 May 8, 1975 SUPPLY - INDUSTRY AND COMMERCE (MR. EVANS cont'd) ••..• you !mow, harrows or rakes or what have you. But I would say this, that I suspect that in the American prairies that generally they're experiencing more or le ss the same situation that we are in the Canadian prairies, and that is, they are receiving better prices for their farm products and I think that, relatively speaking - I think - I think relatively speaking the American farmer is far better off than the American industrial worker in the Eastern United States, because that's where the unemployment is.

I think Texas is still pretty prosperous, as Alberta is. MR. CHAIRMAN: The Honourable Leader of the Opposition. MR . SPIVAK: I wonder if the Minister can indicate whether his department and this particular group were involved in representations to the Federal Government in connection with Sekine Bicycle and the problems they had with respect to the tariff changed. MR. CHAIRMAN: The Honourable Minister of Industry and Commerce. MR . EVANS: Yes, Mr. Speaker, we were, and I'm very pleased to see that there's been some correction by the Federal Government.

We wi;re very much involved with this whole venture right from the beginning, including the sending of staff to Tokyo and discussions with H. C. Paul and Company and discussions with the Sekine people, and we have worked with them and offered our good offices. We1re still assisting them very directly, as a matter of fact. We are still assisting Sekine very directly in Rivers and we did everything we could to help them with the tariff situation. I spoke to them about a month ago, and I'm advised that things are progressing, that the plant is progressing fairly well.

As a matter of fact, I'm advised that this particular plant in Rivers, the level of productivity - now this isn't my measurement; this is the statement by the Japanese people - that the level of productivity in the Rivers plant exceeds the level of productivity in any plant that they have in Japan, and I thought that was rather interesting considering that this is a training program and involves a lot of people that are inexperienced. But as far as the farm machinery sector, again I would like to just go back for a moment and say that we expect a good year again for the farm machinery industry in Manitoba.

The sales to the prairie region are very high and we expect them to be sustained in the American West. We are not affected by what occurs in Eastern Canada or the Eastern United States because we don't sell our machinery into that region of Canada or United States, so we look forward to another good year for the Manitoba farm machinery industry. MR. CHAIRMAN: (c) (2) passed. (c) - passed. (d)(l) - The Honourable Member for Assiniboia. MR. PATRICK: Mr. Chairman, I do wish to put a couple of questions to the Minister.

I !mow that several years ago the Minister made reports in this House, with great expectation what the Misawa Homes would do for the Province of Manitoba and it would solve our housing problems. That's not what has happened, so I wonder if the Minister can indicate what is the present situation as far as Misawa is concerned, prefabrication in Gimli: is that still in operation, how many homes they're putting out, or what has happened? Or is the factory closed and has the government still got any involvement in it?

I !mow that the reports that we used to get from the Minister's department, the Economic Development Consolidated Report that we used to read at one time, we were told that there was great potential in manufacturing of furniture, office furniture and other furniture in this province. And I'm sure the Resource Industries and Construction, I can bring this matter to the Minister at the present time, we also were given to believe that there is great potential in such a thing as manufacturing of mobile homes, and this industry could become one of the largest in Western Canada.

The information that I get from some of the mobile home people, I'm told that the government has not been as co-operative as they could have been in this industry. We !mow that 85 percent or almost 90 percent of materials that go into the manufacture of mobile homes are right here in Manitoba, Manitoba-used products, so this could be a very viable and very exciting and potential industry. I see that we're importing more of our mobile homes than probably, not exporting, but manufacturing right here.

And there's an area that I don't know if his department has been involved or got involved, and see what could be done that this industry can expand, because it's very highly labour-intensive and also, as I say, it uses 95 percent of the materials right here that are produced in Manitoba. So it could be the kind of industry that should excite the Minister, really, and his department.

May 8, 1975 226 5 SUPPLY - INDUSTRY AN D COMMERCE (M R. PATRICK cont'

d) o o The other one I would like to know where we stand and what is the potential, and has he checked into, and make any ob servations as far as ma nufacturing of office furniture and other furnitures are concerned in this province, because at one time we had glowing reports from the departme nt itse l f that there was a great potential in this area, in the ma nufacturing of furniture o So I would like to ask the Minister at this time what is the position in that respect. Are we increasin g our potential in the ma nufa cturing of furniture, or has it decreased? What is the situation?

Ca n we increase production of mo bile homes instead of im porting more and more from the other provi nces, particula rly Alberta? And the other one, what is the situation as far as prefabrication of houses is concerned, and particul arly the Mi sawa Ho mes? MR o CH AIRMAN: The Honourable Minister of Industry and Commerce . MR o EVANS: On Misa wa Homes, I'm not prepared to co mment on that.

That is a matter - although I know we'v e been philosophizing here talking about different com panies, that is a matter •.• Yes, I know it is an industry but, you know, you'r e asking a number of de tailed question that pertain to the MDCo Well, you' re asking whether we still own it and what the position of that com pany is and so on, and I'd su ggest that is some thing that could be asked at the Economic Development Commit tee . I know we had Mr. Parsons here this morn ing for about 2 1/2 hours and I would hope that you could come to that committee and ask those questions.

But I can' t answer some of those questions that you' ve asked us. I think they've had, I know they've had their problems. I can't tell you right at the moment what their parti cul ar status is. With regard to the furniture industry, I don't know what their present status is in Manitoba, and ma ybe I can find some figures on it here in a minute or two, but we believe that the output is increasing.

I can' t tell you what each individual com pany is doi ng, but as an indust ry I believe the output of the Manitoba fu rniture ma nufacturing indu stry last year probably was at a higher level than --(Interjection)-- It was, ye s. I' m advised that it was. Any export? Well we've been trying to promot e the exports . There is export, yes. There 's three com panies we !mow of that are exporting in a fairly si gnific ant way. But ... well, at any rate tho se com panies that are selling to the United States are going to run into problems and I sus pect they are running into problems because of the recession in the U.

S. But, you know, that's some thing we can't do much about. But with regard to office furniture in particular, I was talking about all kinds of furniture but with regard to office fu rniture we are still attempting to attract these types of com panies here. We' re still talking to some prospects but, you !mow, whether they will es tablish here only the futu re will tell. MR. CHAIRMAN: (d) (! )- passed. (d)(2) -passed. (d) -pass. (e)( l) -The Honour able Memb er for La Verendrye. MR. BANMAN: Mr . Ch airman, Project Developme nt.

I wonder if the Mi nister could el aborate a little bit as to what the functions and the purpose of this particu lar department is. MR. EVANS: The ma jor role of the Project Development Branch is to identify major potential job-creating invest me nt opportunities in the province in co- operation with the other branches, and also if it do esn' t fall within the scope of some of the other branches. You mig ht consider the Proj ect Development Branch to be sort of a front office for the industrial develop men t activi ties per se of the department.

I would sim ply say that, by and large, they tend to be engaged in some of the larger potential projects that are pending. It' s a very sma ll group. There are only about three people in it, but they are the people working on some of these cu rrent larger investment projects . You !mow, I could go on and tell you the various commit-· tees that they serve and the various technique s that they use, etc. , but basically they have specialized in the field of chemicals, petrachernicals, energy and elec tronics, elect rical apparatus.

MR, CHAIRMAN: Resolution, (e)( l) -passed; (2) -passed; (e) -passed, Resolution , 68 (f) (1) . The Honour able Mem ber for As sinoboi a. MR o PATRICK: Mr . Chairm an, I would like to ask the Minister, or can he inform the House if the gover nnrnnt has any trade offices or trade development offices in any jurisdi ction? Is there one in Ottawa or in any other country? I know there's been some de bate and discussion during the last session and prior to that time, I do know that some of the other provinces had some success by at least es tablishing a trade development office, say, in Ottawa, where there

2266 May 8, 1975 SUPPLY - INDUSTRY AND COMMERCE (MR. PATRICK cont'd) .•.•. is some action or activity from other countries when people are travelling and they can come into a trade development office in Ottawa, or Manitoba Trade Office in Ottawa. Has the Minister given any consideration to such trade offices and maybe he has them established - I don't know. But live had an opportunity to talk to some people that have had that experience in trade development offices, and they've at least convinced me, and I'm inclined to believe that they would be of great assistance to the Minister .

Can he indicate to me now if he has any offices or what is his promotion and programming in respect to trade development in other countries, and what is the connection, say, in respect to the Federal Government? MR . CHAIRMAN: The Honourable Minister of Industry and Commerce. MR. EVANS: I'm glad you asked the last question because it'll help me answer the first question. That is, I could be perhaps a bit facetious and yet a bit serious and say yes, we have trade offices all over the world, pretty well all over the world. Wherever there's a Canadian Trade Commissioner, Manitoba has an office.

Now, you see, you're not satisfied with that. But it's our belief that with regard to federal trade, with regard to foreign trade offices, trade offices representing Canada abroad, this should be the responsibility of the Federal Government. We have considered establishing commercial offices abroad and rightly or wrongly, we have rejected that avenue of approach. You are correct. There are many provinces that do so. I think it's an eternal embarrassment to Canada.

In the case of Minneapolis, for example, after some years of us cajoling Ottawa into putting a trade office there to promote our interests, particularly Western Canada trade interests, you find the Government of Ontario has a trade office 30 feet down the hall from the Canadian Trade Commission. You know, that sort of thing is ridiculous and I think is a waste of the taxpayers' money, that duplication. Our procedure has been to promote trade through our Manitoba Trading Corporation and our Trade Develop ment Branch.

We do have at the present time four people who are, you might say, travelling salesmen of a sort, one that concentrates on Canada outside of Manitoba, and one in the United States, the upper midwestern portion in particular. We have one who works Europe and another one that works Latin America. These are not offices - they do not have offices.

While two of them may reside abroad, they are actually engaged in contacting agencies, etc. that could handle Manitoba-made products, and I think it's safe to say that where we've had the opportunity to utilize the Canadian trade offices, the Canadian trade offices have been very responsive. And I think, with these travelling salesmen, we are able to get far more from the Federal Government and from the federal Canadian trade offices abroad than we would otherwise, and we have had some degree of success, particularly in Latin America. I think this is where we're going to have to concentrate.

What I mean is the underdeveloped areas of the world - there's a considerable potential. But there may be some in Europe and the United States, therefore we are attempting to promote the sale of Manitoba products there as well. MR . CHAIRMAN: The Honourable Member for Assiniboia. MR . PATRICK: Mr. Chairman, I thank the Minister for at least his attitude, the way he feels about trade offices. Can he give any consideration or tell me if the government did give any consideration to establishing an office in Ottawa?

I don't mean a large office with great bureaucracy, but perhaps one person or two pe::iple, because I have talked to quite a few trade commissioners, Canadian trade commissioners, and I can tell him right now I talked to somebody last week and I hope that I'll be able to bring something to the Minister that may be of some interest to him. There are people from Europe today that are prepared to invest large amounts of money in this country because they feel this is still a stable country.

When they are travelling through Eastern Canada that's as far as they come, and they want information about Manitoba and about Manitoba potential and possibilities . It would be quite easy for a businessman to walk into a Manitoba office in, say, be it located in Ottawa, and at least get the kind of information that they need about different industries. I'm sure the Minister knows; he spent some time with some people from Italy just recently who are prepared to invest millions of dollars in establishing sugar refineries in the provincr� and they ca1ae and spent here a few weeks.

And after, they did a complete research and found out it wasn't a viable operation at the present time. That's the kind of an office I'm suggesting or asking the Minister has he given any consideration, which would be of great assistance to these people who do come

May 8, 1975 2267 SUPPLY - INDUSTRY AND COMMERCE (M R, PATRICK cont' d) .••.• as far as Ottawa and consult the federal people, and it ma y be of some assis tance if the Minister wo uld have better connnection. MR. EVANS: Well, Mr. Ch airman, we did consider est ablishing an office in Ottawa back, I think it was three years ago . We gave it a lot of thought and we decided in the negative .

But I want to assure the honour able me mb er that, apart from trade development, we do have an indust rial development program and this is done on a very select ive basis where we ide ntify oppo rtunities and we go after the specific companie s. We have a progra m now relating to Japan, not to sell to Japan, but actu ally to attract certain Japanese ma nufacturers here . But that• s done on a very sek<Jt ive basis. That is, in my opinion, the way to get the greatest val ue for your doll ar. MR. CHAIRMAN: (f) (1) pass? The Honour able Member for La Verendrye. MR. BANMAN: Thank you, Mr . Ch airman.

I woul d like to just say at the offset here, I appreciate that some thing like trade deve lopmen t is possi bly something like educa tion - maybe you don' t see the immedi ate res ults of what is to happen. And I noticed when looking through the Estimat es that we are spending a fair am ount of mon ey with regard to trade developme nt and a fair amount of time also, and realizing actu ally very few sal es.

And when I look at the Ma nitoba Export Corporation we're looking at sales actua lly shipped of $100, OOO last year, which was less than the am ount allowe d for the oper atio n of that particu lar corporation. But I would like to at this time, just for clarification, ask the Minist er, when in annual reports they show the sa les of different trade fairs and things that we are involved in, on the spot sales or future sales, I wo nder if those are firm fu ture orders or is that prospects ? MR. EVANS: The data that we refer to are based on the reports that the compa nies give to us.

You know, they're not our est imat es, they're what they tell us; and I gue ss like any fut ure sale, some of them ma terialize and some of them don' t. I think you coul d call them prosp ects . Yo u know, they' re hopes of what they' re going to sel l in the next period of time or whatever.

You shoul d not judge the expenditure of this mon ey on trade development with regard to the oper atio n of the Manitoba Trading Corpora tion only, because for some years the departmen t has had a Trade Develo pment Branch and this is still here, and this is a service to Manitoba companies of a technical nature, of a service nature, helping them with their problems in overcoming some of the red tape of cu stoms regul atio ns, import rest rictions that certain countries might have, and so on.

And this takes up a fair am ount of time, and you don't show any return in a sa le by the Manitoba Trading Corporation but some of the staff that su pport the Manitoba Trading Co rpor atio n are spending their time in helping Manitoba companies in docume ntation to sell abroad, and this I unders tand can take up a considera ble amount of our resources from time to time.

Al so, there's a lot of activity, a lot of effort that goes into trade fairs and exhibitions and so on, and I unders tand that we as sist ed in the generatio n of approxi ma tely $6 mil lion worth of export business via the Exhibition and Fair rout e in the past year . But talking about the export assis tance I was talking about, there were at leas t a hundred companies that we assist ed in the ye ar 1974- 75, and this related on the average, we're told that they came to us about six or seven times, so actu ally we had 600 or 700 expor t problems, speci fic problems, that were dealt with.

With regard to ManiTrade itse lf, the Manitoba Trading Co rporation, in the past year it has helped Manitoba enterprises sell orders in 21 coun tries totalli ng abo ut a million dolla rs. MR. CH AIRMAN: The Honour able Member for La Vere ndrye. MR. BANMAN: Mr. Chairman, I wonder if the Minist er co uld tell us, under the Manitoba Trading Corpor ation, coul d you tell us the amount of money that will be allotted for that corporation this year? MR. EVANS: Mr. Ch airm an, it' s in here. It's $90, OOO. It' s (f) (3) . MR . CHAIRMAN: I wonder if the honour able member woul d bring that question up under (f) (3).

We' re on (f) (1). Under (f) (1). MR. BANM<\N: Mr. Ch airm an, I' d like to ask the Minister, and there's been a lot of talk about trade deve lopmen t with Latin America coun tries, and of course the one in particul ar that seem s to be in the spotlight right now is the one with regard to the cou ntry of Cub a.

I know members on this side as well as the ot her side, I'm sure, have had some qu est ions with regard to what precisel y is going on with the Manitoba Gov ernment as far as the hote l in Cuba is concerned, and I wonder if the Minister coul d clear up some of the questions, that I know have been asked of me and I'm sure have been asked of him with regard to the Cub an hotel. Are we

2268 May 8, 1975 SUPPLY - INDUSTRY AND COMMERCE (MR. BANMAN cont'd) ••••• taking an equity position in that particular hotel by furnishing them with certain materials and goods from Manitoba? Are there any loans involved from the Manitoba Government towards the reconstruction or renovation of this hotel? Is there one hotel in specific or are there other enterprises that the Manitoba Government or the Trading Corpo ration is presently engaged in with the Cuban Government, and, if so, if he would mention to us here what those particular enterprises would be? MR.

CHAIRMAN: The Honourable Minister of Industry and Commerce. MR. EVANS: There is no equity in this particular project by the Manitoba Government through the Trading Corporation. There are no loans. It's one hotel, and if there's any financing at all by Mani Trade, Manitoba Trading Corporation, it's strictly interim or bridge financing to the Manitoba companies who are going to be supplying the goods and services if - underline that five or six times - if the deal goes through. MR. CHAIRMAN: (f) (1) -- The Honourable Member for La Verendrye. MR.

BANMAN: I wonder if the Minister could advise us as to whether the extended vacation of the Attorney-General, the Honourable Attorney-General last winter, this past winter, was with regards to this particular item, the hotel. MR. EVANS: Oh no. No, Mr. Chairman. As I understand, my colleague the Honourable Howard Pawley went to Cuba on one of the growing, among the growing charter vacation business that's occurring between Canadians going down to Cuba. It's very economical, I understand. The weather's very nice and warm and the beaches are very clean, I am told.

They need a new hotel or a refurbished hotel which we may help with, but, no, this was strictly a personal vacation, although I believe he spent a day or two on some business relating to his particular responsibilities with the Manitoba Liquor Commission. But he had no involve ment with the negotiations that we've been conducting vis-a-vis the refurbishing of the Hotel Nationale.

Just for the information of honourable members across I'm advised that there are about four aircraft a week in the winter months, on average, going to Cuba taking about 600 Canadians a week, and of course, as the honourable member knows, the federal Minister, the Honourable Alastair Gillespie, federal Minister of Industry and Commerce, was down there only a few weeks ago, and also the Ontario Minister of Industry and Co mmerce was down there, I believe, two years ago. Unfortunately, this Minister of Industry and Commerce has never been to Cuba. MR. CHAIRMAN: The Honourable Member for La Verendrye. MR.

BANMAN: I suppose the question we should ask then is, when is he going? But of course, Mr.

Chairman, what concerns us - and he mentioned some of the federal Ministers being.there and we've also heard that there were some problems with Air Canada with regard to somebody getting a villa down there, and that was in the Barbados, I understand, but Cuba's not far from the Barbados - would the Minister have the information with regard to the estimated future sales that were spelled out last year in the annual report by the companies participating in the trade fairs, in the different t:rade shows, out of the future sales that were anticipated?

I wonder if he would have a breakdown at all to show, actually a year later, what was really sold with regard to these trade fairs by the companies . MR. CHAIRMAN: The Honourable Minister of Industry and Commerce. MR. EVANS: Well, we'd have to go back to all those companies and ask them. This is the information they gave us at the time of the conclusion of the Exhibition and this is what was reported. The only way we could firm up whether their expected future sales were realized, is to go back and ask each one of them whether they did occur or not. MR. CHAIRMAN: Resolution (f)(l).

The Honourable Leader of the Opposition. MR. SPIVAK: I wonder if the Minister can indicate, of the manufacturing output in the province, how much is exported now out of the province, the percentage, and how much of the total is exported outside of Canada. MR . EVANS: Did you ask for the total amount that was exported? Well, this figure says that the total exports for Manitoba amounted to almost $510 million for the calendar year 197 4 according to Stats Canada, but this is all kinds.

Manufacturing was only a third of that, $142, 850, OOO, but I think you wanted to know what percentage of our manufacturing output was sold out of the province in Canada and how much abroad. Just a moment. We estimate that more than half the output of Manitoba manufacturers is sold outside of the pro vince. That's in Canada and ev�rywhere .

Ma y 8, 1975 2269 SUPPLY - INDU STRY AN D COMMERCE MR. SPIVAK: I wonder if the Minist er is in a position to indicate how much percentage wise was outside of Ca nada - was it 20, 25 percent? MR, EVANS: Well we don't have a precise figu re here, but it is a sma ll figure. It' s been su ggested it 's about 14 or 15 perce.'.lt. I don't even think it's that high. But we can get that for the hono urable member if he likes. MR. CHAIRM.. i\N: The Honour able Leader of the Opposition. MR, SPIVAK: My point, Mr.

Ch airman is, why can't it be raised in this discussion as to whether the ma nufacturing ca pacity, or ma nufacturing potential, or ma nufacturing achiev eme nt, can be ma intained if the econ omy co ntinues to fluct uate in the way it has and is at the present time.

My poi nt io the Minister - and this is why the figures have become im portant - with the increase in wage cost s to manufacturing that is taking place in this province, with the esca lation of wage rates that are taking place, with what apparently appears to be no real attempt to invest in new product ive equipment - and I think that's borne out by the ca pital repair expenditure items that I' ve alre ady referred to - is there a daager now that our ca pacity to be able to co mpet e in the ma rkets in Ca nada and in the markets in the world will be threatened because of the both decrease in our produc tivity and the increase in our wage rates that are taking place?

In other words, with respect t'l ou r economy, are we being realist ic about the opportunities that have been taken advantage of whic h may very well dis appear in our compe titive position to be able to ma intain ou r exports to Ca nada and outside Ca nada? And are we not at a point where very serious concern has to be expressed, and where in fact initiatives have to be taken by the department in being able to statistica lly and fi guratively point ou t the position that we're at?

Now, I expressed some conclusions, that may not be able to be su pported by the facts, but I'm wondering whether the department really has the facts, whether the Minister has the facts, and my concern at this point is that if we do not have the facts, then are we not in a seriou s si tuation in being able to judge what really has happened ?

Surely both labour and ma nagement have to be aware of, you know, what the consequence will be of increased esca lation in wage rates, which will ultim ately have to be passed on in the finished goods produced, which can very well affect our ability to comp ete , We have seri ou s disa dvantages with respect to frei ght:rates, we have increased energy costs that are talting place, we have, I would su ggest , problems of our produc tivity, we have problem s with respect to our own technology and mai ntaining a technol ogica l achievement eq ual to what is taking place in other indust rial ac tivities outside of this province within this coun try and outside of Ca nada, and I wonder whether we're not at a point where we face some serious consequences, which will affect the emp loyment opportunit y for m.'l.ny who believe · today that their positions are secure.

The impression I have ..• and I think the Minist er has to indic ate whether this is his impression because I' ve talked to enough business people to know that at this point there is a very cautious attitude being taken.

They have benefitted, like ma ny people have benefit ted, as a result of inflation , and they have seen an increase in prices taking place in which profit ma rgins have been reaso nably high, and it's reflected in the corp oration tax revenues that are forecast for this coming ye ar, which is about a 40 percent increa se over the previous ye ar - which I think is probably the highest percentage increase ever, in terms of corpor ation tax revenue.

B:.rt at the same time, that period is now passing in what I sense is a very real concern in which, if anything, there is what I would refer to as an attitude of re trenchment because of the inability for them to be su re of what their marke t potential will be, and the mai ntenance and ca pability of being able to work at profit margins and be able to be competit ive with the increased cos t es calation that' s taking place.

I wonder whether we're not at a point where there is in fact initiatives and acti'vitie s and direction that has to be given by the government and by the Minister in this area, and I wonder whether the gove rnmont has organized itself in such a way to be able to obtain itself in such a way as to be able to present it, and if it has, I wonder if it would present it to this Ho use. MR, CH AIRMAN: The Honourable Minister of Indus try and Comm,3rce .

MR, EVANS: I gather you' re conce rned about the rising costs of produc tion, including wages, because of the inflatio nary sit uation and how this might ai'fect our compe titive posit ion as Manitoba producers, manu facture rs, vis--a-vis ma rkets particularly outside of Ca nada. Right? First of all, I want to firm up the figur es. Our est im ates on the am ount of exports,

2270 May 8, 1975 SUPP LY - INDUSTR Y AND COMMERCE (MR. EVANS cont' d) • , . .. the amount of our total production for manufacturing - I'm only talking about manufacturing now, not about the primary resources - that is sold outsid e of Manitoba, approximatel y ranges between 25 and 33 percent - in that area, strike an averag e, let's say, about 30 percent. The amount outsi de of Canada is probably in the order of six to seven percent.

In other words, six to seven percent of the output of Manitoba manufact uring is sold outside of Canada. --(Interjection) -- $1 42 million last year , which was about a third increase over 1973. That's 1974 over 19 73, $1 42 million was the level of 1974 and that was one-third increase, 33 1 /3 percent increase, over the level for 19 73. That is exports abroad , exports out of Canada . No, we have not done any study as to the impact. You know, the re's no precise study.

I think we have a lot of pieces of infor mation in the depart ment on very specific industry groups, industry secto rs, but I just wanted to point out that this phenomenon of wage increase is not peculiar to Manitob a, in fact it's not peculiar to Canada. You look at Europe, for exam ple, and you'll see that the problem of escalating costs is a problem that is very preval ent in Western Europe; it's preval ent in all industrial societies today.

As a matter of fact, the inflation that we're experiencing in Canada has been considerably le ss than the inflation that was experienced in many of the western European countries. At the moment , Britain is ex periencing inflation in the order of 21 to 22 percent. That is the latest figur e at an annual rate, calculate d on an annual rate basis, which is about double the amount of inflation that we have in Winnipeg. And Japan has had a phenomenal increase in inflation too.

Currentl y it is under going about 24 perc ent annual rate of inflation and their wages, I'm advise d , are increa sing at about 32 pe rcent. Well , I used Britain and Japan but there are other .•. You could look at the OECD fig ures and you'll see that that has bee n the case in We stern Europe. Now the rate of inflation has falle n off in the United States, but the y've had to pay a very terrible price for that, and that is about 9 pe rcent unemployment and now some labour le aders ar e pr edicting unemployment may exceed 10 perce nt , 11 percent, and they even go as high as 12 perc ent , which is disas trous.

But that is the price the Am ericans are paying for diminish ing inflation. I think that we can safely say that ,. relatively speaking then , while costs are rising in Manitoba they are not rising unduly vis-a-vis other areas of Canada and many other areas of the world. Th e other point I would make is that the Canadian dollar at the moment has tended to become deval ued. I think it's two or three cents less than America n, and of course the de valuation in Cana da's dollar is on a floating exchange basis. In other words , the Canadian dollar is fl oating - which I incidentally welcome.

I think it's good to have a floating dollar. But at any rate it's floating downwards and that will have a tendency to make goods manufactur ed in Canada more competitive in world markets. It will be easier for us to sell abroad. On the matter of getting detaile d data on productivity in Manitob a, I would advise the honourable members that we are engaged in developing a system to get very precise and very detaile d data on productivity by industry groups in Manitoba, and possibly we will be in a bette r position to isolate the key pr essur es, cost pressures, on our firms.

Howeve r , I haven't got any specifi c information. I can just make a general observation at this ti me. MR, SPIVAK: The Minister indicated about $1 46 million of export out of the countr y, if I' m correct - 14 0, - 146 million more or less ? 142 - all right. Could he indicate how much of that comes from the fashion industry? MR, EVANS: I haven't got that informati on, Mr. Chair man, but we might be able to get it. I don't know whether we can get it tonight but we'll certainly get the inform ation and relay it to the honour able member.

MR, SPIVAK: Well I wonder , • . original amount of 146 million, the substantial amount of 146 million. I'm not asking in specific ... MR, EVANS: My experts tell me it may be 10 to 15 percent of this total. We are esti mating that it's likely around 10 to 15 percent of the tot al fig ure here. Now that 's just an of f the-cuff estimate.

MR, SPIVAK: Well I think the Minister in his answer will acknowledge one thing , that if in fact the inflationary rate in the United States is less than that of Canad a, whatever the con sequenc es may be to the United States and whatever difficulty there may be with resp ect to unemployment in the United States, it pr esents fo r our manufacturers a real threat to the extent that our problems here, being what they are and being part of the national scene and being part

May 8, 197 5 2271 SUPPLY - INDUSTRY AND COMME RCE (MR. SPIVAK cont' d) ... .• of the econom y that we are trying to control now , can in fact cr eate and develo p for us a com petitive position or an uncom petitive position, in which some of the gains we made with respect to our exports will in fact be challenged. My point being that at this point are we really alerting the key element s within our econom y and the key leaders within our econom y to the potential danger that can occur with respect to the futur e.

And this is not done on the basis of pessimism, but on the basis of realism in the competitive world that we live in, and recogniz ing, you know, the sheer difficulty we have of trying to be able to sell our prod ucts and maintain the marke t opportuni ties that we' ve been able to open up in the past.

And my concern at this point is that we' re in an area and we' re in a period where concern has to be expresse d, both in this House and to the industry and to the leaders of labour, and to all tho se who are concerned about the economic deve lopm ent of this provin ce, to understand the need for some kind of consensus on where we' re going, because if we don't, my suspicion is that the escala tion that we'r e seeing with respect to certain areas in our industry now in terms of wage incr ease s, can in fact put our selves into a pos ition where in effect we will be basically hurting ourselves and hurting the maintenance of job opportunity that we now have.

MR. CH AIRMAN: The Honourable Minister of Industry and Commerce. MR. EVANS: Well I would agree with the honoura ble member. He was talking about the clothing industry , the fashion industry. I would think that what is going to hurt that industry in the United States market - and I think you can start with the United States market - is not the varying rates of inflation, but the fact that there is wi de- scale, very deep unem ployment, which is reducing consumer demand. Th at is the thr eat and I share his concerns on this.

I just want to say that perhaps Canada is too dependent on the American marke t and we should be attempting to diversi fy our exports, and as a matter of fact this is what we' ve tried to do. To the extent that we have some resourc es, we have been attem pting to diver sify our trade, particularly, I would say, in Latin America where there is I think a fair amount of potential.

At any rate, I guess I' ve always said that we're not an isl and unto ourselves and that we live in a national economy, we live in a North American economy, we live in an international economy, and we are eventually subject to these pressures, inflationary and otherwi se, beyond our borders. MR . CHAIRMAN: Resolution (t)(l )--passed; (2)--pa sse d; (3) .•. Th e Honourab le Le ader of the Opposition, MR.

SPIVAK: I wonder if the Minister can indicate with respect to the Manitoba Trading Cor poration, whether it was conceived as part of the op eration of the Trading Corpora tion that there would be an effort undertaken at the same time that the Trading Corpora tion com mence d its operation, and ch anged from the Export Co rporation, an effort made to help finance both the exports and the encouragem ent and the expansion of industries who se manufacturing output could in fact be handled by the Trading Co rporation, or who se export business would have in crease d as a r esult of the activi ty.

Was it contemplated that there would be, through the Manitoba Developm ent Corporati on, funding arranged for, or provided fo r, for the expansion of existing operations so that tho se officials in the Trading Co rporation who could id entify an oppo rtunity would be able to both of fer export opportunity and also indicate financing that could be available from the gov ernmen t ? Was that contempla ted as part of the ori ginal conce pt and is that part of the working arrangemen t that is contemplated in the opera tion of the Trading Co rporation itself? MR.

SPEAKER: The Honourable Minister of Indus try and Commerce. MR0 EVANS: No , Mr. Ch airman. Th e Ma nitoba Trading Cor poration does not lend money to any com pany nor take equity in any com pany. What we might do, what we can do , is provide export bridge financing for Manitoba com panies by purchasin g goods to fill an export order and paying the supplier in accorda nce with his domestic terms. This is to help ove r come some of the unduly extended or long terms involved in overseas orders.

And of course if we are required to ass is t in that way, of course we do charge, and there is an interest rate charge d , a fee charged and so on. But we do not lend money or take equity as such. MR. CHAIRMAN: Th e Honourable Leader of the Opposition. MR. SPIVAK: Mr. Chairman, I underst and from the Minister, I realize the Manitoba Trading Cor poration does not have that func tion, but was it contemplated that the Manitoba Trading Corporation, in id entifying export opport unities and potential for expansion, would work hand in hand with the MDC and through the MDC be able to offer manufacturing firms

2272 May 8, 1975 SUPP LY - INDUST RY AND COMMERCE (MR, SPIVAK cont' cl) • • • • • the opportunity of expansion to be able to meet export opportu nities identified through the Trading Corporation, and pos sibly financed as well, the bridge financing for the export being handled by the Tr ading Corporation? Isn't it a fact that this was contemplated as part of the operation, that the Trading Corpo ration would be able to handle the export but also would be able to identify those industries who would be in a position to re ceive loans and to be in a position to expand?

MR , EVANS: Well , this would develop in the course of events, that if we were able to identify a potential export market which would enable a Manitoba manufacturer to expand, and if that manufacturer could not obtain normal financing and so on, I could foresee ourselves, if we were invited by that company, to support them in their bids to get MDC financing if that should come to pass. But, having said that , I would also say that we are quite prepared to serve all companies whether they hav e MDC loans or whether they're Crown corporations.

I would hope that in the future we would be able to pro vide a greater export service for some of our Crown manufacturing agencies, but there is no special arrangement as such for them. MR, CHAIRMAN: The Honourable Member for Sturgeon Creek, MR . J . FRANK JOHNSTON (Sturgeon Cre ek): Mr. Chairman, to the Minister. As I read the bill on the Export Tr ading Corporation and when we changed it from the Export last year, it seemed to me that the Trading Corpora tion could, if they wanted to, purchase products from Manitoba companies and be their agents in other parts of the world or in other provinces.

Has the Tr ading Corpo ration to date set up any warehousing, or do they have commission sales men, which would be allowed acco rding to the bill, pr esently contacting companies to be their sales agents, or buy their produce and be their distributors in other areas? MR. CHAIRMAN: The Honourable Minister of Industry and Commerce. MR . EVANS: Yes, Mr. Chairman, we're actively working with 45 Manitoba companies now, either as a sales agent or as a merchant agent, and there's some very specific examples. I could give you, I guess, the Quality Co mmunications at Mord en.

We worked as an agency, as sales agents for them, to sell electronic equipment to the Turkish Telephone Company. That's one example that comes to mind. I think there's another example. We identified an ex port market for a small abattoir in Pa nama, and we subsequently were able to make an arrange ment with Canadian Rogers Western Limited to supply the entire abattoir. It was about a three quarter of a million dollar package deal. I must say, however, some of the components were made outside of Manitoba, but the total deal was handled by Canadian Rogers and we acted as an agency there.

In the year 1974-75 we have acted as a merchant and mad e sales for a number of companies. I could give you some of the names if you want. If the member's in terested, I could read off a doz en names here. MR. F. JOHNSTON: Just a couple. MR . EVANS: Just a couple. Kipp Kelly Limited. We sold some wild rice for the Indian Rice Producers Co- operative - I think we sold a fair amount to Chicago, was it? Minneapolis. We helped them sell a quarter of a million dollars to Minneapolis. Micro To ol and Machine Limited is another example.

Th ere' s a company here - Automotive Accessory Company Limited - I'm not sure what's involved. Harco Electronics Limited. Alphametrics Limited, and so on; there are several others. But we hav e an agreement with 45 companies to work with them in their export efforts. MR . F. JOHNSTON: I wonder if the Minister can tell me, when you work as an agent for a company do they pay you commission? MR. EVANS: Yes. MR. F. JOHNSTON: Mr.

Chairman, then this is the export going out, and I remember clearly when the bill was brought up that the Pr emier and the Minister were concerned that the Tr ading Company had to be called the Trading Company because it was all one way - it was all going out of Manitoba. Has the Tr ading Company done anything in respect to buying from other areas other than Manitoba and warehousing and selling to Manitoba industries? MR .

EVANS: The position was that there was an element here, an opportunity perhaps, for us to sell to a particular country, and I'm thinking especially of the developing countries that tend to have a large number of trading companies themselves in various ... Well, even the Japanese have these things, these organizations. And we thought that we would perhaps open a door to us by saying, okay, we are prepared to facilitate the purchase of "X" amount of such and such product that we can utilize in Manitoba, in turn for some sale of Manitoba

Ma y 8, 1975 2273 SUPPLY - INDUSTRY AND COMME RC E MR. EVANS cont'd) .•.. - . products to that company, or to that co untry. To date, although we have this in mind, to date there has be en no such arrangemen t cons ummated. MR . F. JOHNSTON: Mr. Chairman, I'm wondering if the Minister does have the amount of commission the Trading Cor pora tion has earned so far. MR. EVANS: I under stand the commissions average about 3 perc ent of sales. So there' s a million dollars worth of sales that we' ve prom oted. MR. CHAIRMAN: Resolution (f)(3)--passed; (f)--pa ssed.

Resolved that there be granted to Her Ma jesty a sum not exceeding $1 , 31 8, OOO for Industry and Commerce. (Passe d). Resolution 69(a)( 1)--passed; (2)--passed; ( a)--pass ? The Honourable Le ader of the Oppositiono MR . SPIVAK: I wonder if you can indicate how many meetings the Economic Developme nt Advisory Board held last year. MR. EVANS: How many me etings has the board held ? You don't mean public meetin gs, you mean me etings of the board. MR. SPIVAK: Yes. MR. EVANS: Well I know there have been several meetings - I can't give you the precise answer but , Mr.

Chairman, we are arranging for the Ch airman of the Economic Developme nt Advisory Board to appear before the Legi slative Co mmittee on Economic Development, and they will be making their Annual Report, and perhaps you could ask that type of ques tion of the Ch air man. But at the same time I'm quite prepared to get you the information in the meantime, if you wish. But other wise I would ask you to wait until the Chairman of that board appears before the Co mmittee. MR. SPIVAK: Mr. Chairman, through the Minister. Does the Minister really believe that this amount of money is justif ied ?

Does he really believe that the Economic Develop me nt Advisory Board serves any function whatso ever ? MR . EVANS: Well obviou sly, if we didn't think it served any function we wouldn't have it in the Budg et. But I think that it has performed a particularly us eful role in stimulating di scussion and debate on regional dev elop ment iss ues. There was a confer ence held earlier in this year in Winnipeg and it was extremely well attended , and as I understand ...

I don't know whether the honourab le member was there or not , but it was very well attended by the business community and by professional people in the provinc e, and we've had some very very excellent speakers and I understand there was some excellent discussion and debate. The board has also held smaller seminars of discussion around the province and I think they'll be doing more in future. MR. CHAIRMAN: (a)(2 )- -passed; (a)--passed. (b)(l) .•. The Honourable Mem ber for La Verendrye. MR. BANMAN: Mr.

Chairman, I would like to ask the Minister what rese arch; in effect, this particular departmen t does on its own. I notice when I get the monthly report that the Manitoba Bu reau of Stati stics puts out, I notic e that almost all of the stuff, they refer to the infor mation taken out of the Statistics Canada docum entation. I think the concern that I have and I know many of my colleagues do, is that we get thi s fairly thick book and basically all that happens from month to month is that you get another column printed on the end.

I question whether there wouldn't be some more effici ent method of getting this information to the people that sub scribe to the Manitob a Bu reau of Statistics literature. It seems like a trem endous waste of not only pr inting time but also paper , to put out this big booklet and then just add one column every month. Th e other thing I'd like to ask is what active res earch is the departmen t doing , or are they taking all their information from Statistics Ca nada and then just transpo sing it back on to different paper and the way that they feel would be more prese ntable to the people.

I' m also wondering, I notice that the moneys allo tted to the bureau this year are exactly the same as last year, and is there going to be a cut in staff and a cut in the amount of mat� rials produced by them, or what would the reason for that be? I'd like the Minis ter' s reply to that. MR. CHAIRMAN: The Honourable Minister of Industry and Commerce. MR. EVANS: Well, a lot of the work of the Bureau is as an internal service agency for other gove rnm ent departmen ts, and many of their - I know every week they receive dozens of inqui ries for statistical tabulatio ns.

The res earch of the Bureau is confined to statistical

2274 May 8, 19 75 SUPPLY - IND USTRY AND COMMERCE (MR. EVAN S cont'd ) ..... res earch, re search into getting better raw data, as reliable basic information on the economy and society of the province as poss ible, providing basic data, such as Stati stic s Canada looks upon its role, pro viding basic data for the government to use, for the community to use. They handle inquiries , however, from the private sector, from the community as well. Th ey receive many inquiries which they attempt to provide. You don't see th ose be caus e they go out on a special basis.

Th e Winnip eg Builders Exchange are currently discus sing with the Bureau the po ssibility of a construction survey, which I think we are going to be able to carry out in co- operation with them, and this will be new information that has not been available before. In addition, I would point out that the Bureau collects and publishe s, tabulates and publishes quarterly and annually infor mation on cre dit unions in Manitoba.

It also undertakes a food prices surve y of Northern Manitoba, and incid entally this information, I understand, is of considera bl e use to a lot of agencies, including Manitoba Hydro, in looking at the cost of living probl ems that some of their employees are faced with in the North. Another area is with regard to the census. Because we do have a Statistics Act , we are able to get access to the census tapes of the Stati stic s Canada and we're able to run off various kinds of cross tabulations, various types of statistical calculations that wouldn't necessa rily be available from Stati stics Canada.

We have these tapes and the Bur eau does these tabulations, I am advise d, from time to time for various departments and agencies. So there is a vari ety of things that occur that don't se e the light of day in a publis hed document such as you refer to. If the honourable member finds the document of no use, we'll be delighted to take him off the mailing list. MR. CHAIRMAN (Mr. Shafransky): Th e Honourable Member for La Ve rendrye. MR. BANMAN: Thank you. I would like to pose the question I proposed to the Minister before. I wonder if he could tell us why the same expenditure as last year.

Is there a cut in staff and a cut in the amount of material that will be produced by these people ? MR. EVANS: No, ther e's no cut in staff. Some of the work that is done for outside groups is pa id for by the outside groups . In other words, a contribution made by an Industry assoc iation or by another departme nt or agency, would be expected , is expected to contribute towards the cost of that typ e of work. MR. CHAIRMAN: (The balance of Resolution 69 was read and passe d. ) Resolved that there be granted to Her Maje sty a sum not exceed ing $461, 700 . Resolution 66(1)--passe d.

Th at concludes the De partm ent of Industry and Commerce. MR. GREEN : Mr. Chairman, I wonder if someone could advise the gentlemen in the simultaneous committee that we have concluded here, and then we'll deal with both committee reports at the same time. . . . . . continued on next page

May 8, 1975 2275 COMMI TTEE OF SUPPLY - DEPARTM ENT OF HIGHWAYS MR . CHAIRMA N: I would direct the attention of members to their Estimate Books , Page 28, the Department of Hi ghways, Resolution 62 (c)(l ) --Pas sed ; (2)-- Pass ed ; (c)- Passed . The Honourable Member for Pem bina . MR . HENDERSON : Yes, this heading "Bridges" A MEMBER : We haven 't got to that yet . MR . CHAIRM AN: Yes , we have . MR . HENDERSON : Oh , I' m sorry . MR . CH AIRMAN: Resol ution 62 (d)(l ) , Bridges . The Honourable Member for Pembina . MR . HENDERSON : Yes .

Would the Minister mind explaining just how this works , salaries on Bridges . MR o USKIW: Salari es ? MR . HENDERSON: Yes . Well , I mean he's got Bridges there. MR . USKIW: Yes . It 's the salaries for the staff related to the bridge department of the bnm ch . MR . HENDERSON : For the planning of the bridges, is it ? MR . USKIW: Pliinning, de sign

section . The office staff. MR . HENDERSON: Not the big office staff. Just in the desig n and the planning. MR o USKIW: Well, I gue ss I' m not speaking into the mike . MR . HENDERSON: This looks like quite a large sum for that . MR . USKIW: It 's marginally over last year , Mr . Chairman, if that's the quest io n that is being raised . MR . HENDERSON: Yes. But when you 're talking about the des ign of bridges like, it 's 549 ,4 00. It's still a big figure unless you 're doing an awful lot special in the de signing of your bridges . Well , do you desi gn each bridge individually ? Individually ? MR .

CHAIRMAN: The Honourable Minister . MR . USKIW: Mr . Chairma n , there are 38 staff-man-years involved in the bridge depart ment , so that most of that is sala ries . MR . CHAIRM AN : The Honourable Member for Fort Garry . MR . SHERMAN: Thank you, Mr . Chairman . There are two bridges that are on my min d at the present time, and I would like to ask the Acting Minister about them . One is the bridge at St. Adolphe; one is the proposed Fort Garry-St . Vital bridge . But I want to take them one at a time and ask him about the bridge at St .

Adolphe, and why public moneys are being spent on building that bridge at St . Adolphe - actually the construction of the bridge isn't under way yet , but all the preliminary work has been cleared to go ahead - in some cases it is going ahead - and I fail to see the logic for building a bridge at St . Adolphe , particularly at the expense which is involved , particularly when you consider that the co mmunity is located right now midway between two bridges, which seem to serve that community and that region more than pas sing well .

So my first question to the Minister is, what was the rationale behind the decisio n to construct a bridge at St . Adolphe which is going to cos t several millions of dollar s? I know that the specific cost of the bridge itself is not several millions of dolla rs, I think it 's $1 million . But when you consider that the preliminary work, the landfill and everything else that 's involved , it comes to several millions of dollar s. MR 0 CHAIRM AN : The Honourable Minister . The Hon ourable Member for Fort Garry . MR . SHERMAN : Mr .

Cha irman , if I could just interject on a point of order here, the point was raised in the Chamber l::ite this afternoon that under the arrangements such as we now are working that it 's perfectly permis sible , if the Minister , or the Acting Minister wishes to have the Deputy Minister answer, and I' d just remind him of that if he wants to operate that way . MR . USKIW: Well, I' m aware of that, Mr . Cha.ir man . Well , in any event. Mr .

Chflirman, I' m advised that the bridge that is being constructe d replaces a ferry that was opera tional there for ma ny years and which either had to be replaced, or a bridge put in place, so thflt the decis ion was to connect the community of St . Adolphe with 75 via a bridge . I don 't know whether that is the point that the Mem ber for Fort Garry is trying to pursue, but that's the rationale behind it in any event. MR o SHERMAN: Well , Mr .

Chairman , I suppose the point I' m trying to pursue is a jus tification for the, you know , the decision to build a bridge co sting in exc ess of $1 million at that particular point . The com munity , as I have suggested , is midway between two excellent

2276 May 8, 19 75 SUPPLY - HIGHWAYS (MR. SHERMAN cont 'd) .. ... bridges at the present ti me . I think it's about halfway between two bridges that are seven miles apart. A MEMBER : Is that right ? MR. SHERMAN: Yes . The government has said that the cost of this bridge at St . Adolphe is going to be $1 million , but if you look at the cost of the land and the roads , the access roads , the land that has to be filled up for a very long way, we 're probably looking at $2-1/ 2 million , to serve the community of St . Adolphe , which is completely surrounded by a ring dike and which can't grow.

It 's not a community that is growing or ha s any potential , any recognizable or documented potential for growth. If you drive out and take a look at the surrounding area and you inspect the land in that particular area , you come very quickly to a realiz ation that the re's an enormous amount of build -up work that 's going to have to be done in the area , on the land in the area to make a bridge even practical . You know, I' m asking for some sort of justificati on and rationalization for that decisio n .

At the same time the Provincial Governme nt doesn 't seem very enthusiastic about supporting the concept of a bridge linking Fort Garry and St . Vital , which would serve as a major truck thoroughfare and arterial avenue for a very heavily travelled area . There 's no comparison between the intensity of traffic and travel in Fort Garry /St . Vital and in the St . Ad olphe area . I find that a rather incongruous decision for the government to have come to when they 're still, as near as I can determine, opposed to the Osborne Street Bridge that 's bee n proposed in this area and the Fort Garry Bridge . MR .

USKIW: Well, Mr . Chairman , the problem is that where a community has bee n accust omed to having some sort of access across the Red be tween 75 and St . Adolphe vis -a -vis a ferry system , that one has to ass ume that we can't regress on that point , that we have to maintain the communication and transpo rtation link, so that in e ssence it would require either a continuation of the old ferry or replac ement of it , or the building of a bridge .

Now, the other factor involved in that the ferry is mobile only six months of the year , so that the other six months there is no way of transportation across the Red at that point . So that the bridge does make sense in that respe ct . The Deputy advises that long-term it 's looked upon as a connecting route which will serve as a bypa ss around the city, so that it'll link up , in other words , with other roads. But that is some time away . With respect to the St.

Vital bridge, I' m advised that we 're into a period of preliminary work, the desi gn stage, and that indeed it involves the particip ation of the City of Winnipeg in that it's a 50-50 cost -sharing project . So that it is not being excluded but it is under way at some stage. MR. SHERMAN: Well , Mr . Chairman, I thank the Minister for the information but it seems to me that when he says that envisioning that bridge across the Red at St .

Adolphe, there 's an element in, or a part of an eventual bypass around the City of Winnipeg, is some thing that is some distance away , I would say that that's the unders tatement of the year , you know. If you look at the map this is going to be an element , a unit , or a link in a bypass that 's going to stand out there all alone by itself for decades before there's any link-up or hook.:.up with any viable bypass, as far as I can see at the moment .

Als o I' m not just going on the basis of the map, I' m going on the basis of driving out and looking at the area myself, and I cannot see why a bridge is nec essa ry in that area . They're not that, you know , they 're not that far from Ste . Agathe, they 're not that far from the perimeter . Were there traffic studies done ? Have there been surveys and projections and traffic studies done, es tablishing the fact that there really is a need for a bridge in that area ? I' m under the impres sion that many people in that area come into Winnipeg on Hi ghway 59 anyway , that they 're not looking to use 75 .

A MEMB ER: That's right. MR . SHERMAN: I just would like to know if there were studies and surveys which indi cate that everybody in St . Adolphe wants a bridge so they can use Highway 75, that 's fine . But I haven't seen any evid ence of that . MR. USKIW: Mr . Chairman, I don't know that there 's any more that I can add to the statement that I' ve already given to the members . I have no way of knowing the overview that had been considered some two or three years ago when the decisions were made .

But I would have to say that it 's well under way, it's almost too late to question the need of the bridge when it is being built . Now, whether it is based on the right rationale or not, I' m not in a posit ion know, other than to indicate that the department felt that thi s would serve as a better facility for connecting up the community with the wes t side of the Red River than the

May 8, 197 5 2277 SUPPLY - HIGHWAYS (MR. USKIW cont'd) ..... old ferry system which I suppose in the modern period has to make some sense . Would that be the last ferry that we 've ... time ? A MEMBER : One more to go. MR. USKIW: There's still one more to go. I see . There 's still one more yet . MR. HE NDERS ON : Is there really just seven . . . MR. CHAIRMAN: The Honourable Member for Virden. MR. HEND ERSON: Is there really just seven miles between these bridges at the prese nt MR. USKIW: Approximately that . MR. HE NDERSON: And this bridge is going to cost a million dollars, at least ?

MR" USKIW: Estimated at that amount. MR " SHERMAN: That 's what the government admits it's going to cost . MR" USKIW: Yes . MR" HENDERSON: It sounds terrible to me when I think of Highway 305 and Highway 13 , and there's all that distance in there without a paved highway even between , and why we would go and spend a million dollars on one bridge when there's another bri dge just - there's nobody would have to travel very far when the bridges are only seven miles apart . MR. CHAIRMAN: The Honourable Member for Fort Garry .

MR" SHERMAN: For the record , I' d really have to question the political decision that was made in this case, Mr . Chairman .

I think there are many parts of the province that are dese rving of government expenditu re, expenditure of public funds on roads and bridges, much more so than that particular area , and it 's not because that particular area doesn't deserve it 's place in the sun, too, but it just doesn't have the population , it doesn't have the potential , as I' ve said it 's surrounded by a ring dike, and it 's not growing, and they have Highway 59 at hand, they have two bridges , one to the north and one to the south of them, seven miles apart ... MR. HE NDERSON: And then Highway 200. MR.

SHERMAN: And I find it very difficult to esca pe the cynical conviction that it was a political decis ion , and that that particular constituency, being repre sented by the government as it is, was shown some favoritism in this respect,

whereas other constituencies in the pro vince, including my own, that are not represe nted by government members , are attempting to get roads and bridges and other servic es and having some substantial difficulty when the. argu ments and the viability for roads and bridges in their areas are much more substantial than they are in the case of this limited population community of St . Adolphe . And I don't want to delay the work of the committee, and I don't want to belabour the point , but I want to register for t�e record my objec tion to what I think has been a political decision . MR.

CHAIRMA N: The Honourable Minister . MR. USKIW: Mr . Chairman, I think that one has to review the history of the develop ment of the bridge concept . I' m advised that the ferry structure that was there was owned by the municipality or the Town of St . Adolphe , which in 1965 it seemed to be advisable that the province take over the responsi bility for the conveyance of people across the Red at that point . Now if it wa s a political decis ion to do that I have to accept that, if that was the only rationale behind U.

But once you take that decis ion it follows from that, that the community will continue to pres sure for upgrading of that servic e, and that I have to as sume that the community maintained its posi tion and convinc ed the government that the ferry ultimately had to be replaced with a bridge . But the decisio n really dates back to 1965 when the province as sumed respo nsibility . So if it 's political it's be fore the time of this government , Mr . Chairman . MR . HE NDE RSON: It doesn't say you have to make another one though. MR.

USKIW: Well, I mean, one stems from the other , you make one decis ion and then you . MR. HE NDERSON: Two wrongs don't make a right. MR . USKIW: Once you come into a community, you know, it 's hard to pull back . MR. SHERMAN: There are bridges and there are bridges, though, Mr. Chairman, and you know, as I' ve pointed out there are enormous personal expen ses involved in building a bridge in that particular ar ea . And what are you going to do ?

You· re taking a rclati vely agrarian, relatively rustic , relatively pa stural area of Manitoba and you're dropping the equiva lent of the Golden Gate Bridge in there, and it's a joke . You know, you don' t need "a" bridge .

2278 May 8, 1975 SU PPLY - HIGHWAYS (MR . SHERMAN cont 'd) . . . . . Perhaps there is some argument that can be made for some kind of a structure in order to get across the river , although I frankly would prefer the ferry for many reasons , not the least of which are ae sthetic , but I find it difficult to justify the kind of expense involved in the circumstances .

Some kind of cross ing, all right , but I think that this is - my own impre ssion is it's a bit of a joke in the neighbourhood itself, that the people in that area feel that, you know, this is something of a particular plum that's bee n dropped in their laps for bei ng on the right side of the political fence . I think if you drove out there and took a look at the area , and took a look at the need and the requirements - and perhaps you've already done so , Mr .

Minist er , through the Chairman to you, and if you have, I don't mean to be pre sumptuous, but if you did I think you would find that it was a bit hard to, you know, a bit hard to justify even in your own mind . MR. CHAIRMAN : The Honourable Minister . MR. USKIW: Well I simply want to reiterate that if it was an error of judgment it has to be said that that error of judgment was ass umed in 1965 when the province decided to take over the ferry system . It was inevitable once that was undertaken that there would be pressures for a better system of transportation acro ss the Red at that point .

That's something that is part of the evolvem ent of community pressures once government commits itself in that way . Now whether it 's right or wrong is another question . But once having made the commitment , I don't know how the province could go back . Not very many people would think in terms of a ferry system as being a modern means of tran sportation these days . In fact I didn't know that we had any in existence in this province up until the last year or so, perso nally . But you know it 's just looked upon as an outmoded system of transport across rivers and stream s.

But what ever the case is, you know, it has to be justified on the basis of the initial decisio n that was made which, whether it was political then or not I don't know. Only members that were in office at that time would be able to advise me if it were . MR. CHAIRMA N: The Honourable Member for Virden . MR . McGREGOR : Well I don 't like to interfere if they're on that same subject , Mr . Chairman, but if not I' ll ... MR . CHAIRMAN: I' ll put other member s on the list, they can speak in turn . MR. McGREGOR: All right . Regarding bridges ,what are the bridges that are being built now ?

What is your capacity, say ? Are there any going in less than 110, OOO pounds? What is the . . . ? MR. USKIW: They 're all being designed to 110 , 000 pounds . MR. McGREGOR: Then what program or have you got a program to upgrade the older bridge, and I' m thinking of the old-- (Interjec tion) --Yes, well I'm thinking of the steel over head type that I' ve got some four in my consti tuency, and many trucks come in with certain types of loads, they've got to bypass , go by river s.

Is there a long-range program that say 10, 2D years from now they 'll all be replaced or the top taken off, or does this take an entire new bridge ? MR. USKIW: Well I would think, Mr . Chairman, that if you took the top off you wouldn't have a bridge because that's what holds it together . But, you know, you'd have to have an ew bridge with a different desi gn. That 's really what the member is suggesting, I would have to ass ume . MR. McGREGOR: Well is there a long range to have these replaced with ... ? MR.

USKIW: With the Federal-Pro vincial Agreement where there is an involvement in the proc ess of upgrading up to 110, OOO pounds weight capacity, those designated highways have to have the structures eventually upgraded as well . So that is a definite ... The others I presume are a matter of policy, and the rate at which that happens much beyond the five-year agreement . MR. CHAIRMAN: The Honourable Member for Pembina . MR. HEND ERSON: Wel l, Mr .

Chairman, I' d like to go back to that bridge again , and when you say there's only seven miles between these two plac es where you can cross the river and you're going to spend over a million dollar s, it 's es timated a million and likely to run much higher , I just can't see it . Be cause it's only three and a half miles either way, and I don't think that the government can justify itself on the basis that somebody else took over a provinc ial program in which this ferry was a part of .

I don't think that it nec es sarily meant that the government would be committed to keep a bridge there continually because times

Ma y 8, 197 5 2279 SUP PLY - HIGHWAYS (MR . HENDERSON) ..... change, and what 's seven miles with cars these days , and the general flow of the traf fic in that area is north and south . They 're not cros sing the river any way and this bridge could easily be there and only running three and four cars in an hour , because the general traffic is north and south in that area and there 1s good highways on both sides of the river . MR " USKIW: Well I' m advised that - well the distance is 15 miles apart . MR o HENDERSON: Oh it 's seven each way ? MR . USKIW: It's seven each way , ye s, something like that .

It 's not three and a half. MR " HENDERSON : Well never more than seven then, eh ? MR " USKIW: Yes, that 's corre ct. MR " CHAIRMAN : The Honourable Me mber for Fort Garry . MR . SHERMAN: Mr . Chairma n , I' d be interested in returning to the questio n that I raised as to whether there were traffic counts or traffic studies taken. The Minister says that there wa s, you know , that there was pressure for this bridge , but who did the pressure come from ?

Were there traffic counts and traffic stud ies taken which said that there's got to be a bridge , and there's got to be a million dollar bridge , and there's got to be a million dollars worth of access roads in order to accommodate the traffic ? I' ll be surprised if that bridge accommodates two cars an hour , very surprised . I would like to know what kind of sort of traffic count was taken.

You 're talking about an expenditure that could well go into highways and bridge development in other parts of the province, and tho se other parts of the province must indeed be asking why they can' t, you know, have that kind of consideratio n too . Was there any mathematical or any factual or statistical basis for making the deci sion , other than the fact that the previous administration , as you have sugge sted , started to phase out the ferry ? MR . CHAIRMAN: The Honourable Minister .

MR " USKIW: Well the Deputy Mi nister indicates that there are many things beyond traffic counts that go into making a deci sion . That is only one component of the dec is ion . But in essence it emanates from the fact that the provinc e undertook that responsibility some years ago, and once having done so it's a matter of, shall we say steady progress to this point in time . MR . SHERMAN : Well you wind up in fact with a bridge that leads from nowhere to nowhere , that's really what it comes down to . MR . ENNS: That sounds like the Thelma Forbes' bridge , does n't it ? MR0 USKIW: Has Thelma had one of those ?

MR . CHAIRM AN : Order please . The Me mber for Fort Garry . MR . SHERMAN: Well, Mr . Chairman, conti nuing on the subject of bridges but perhaps switching from St . Adolphe, which seems to be getting its bridge , to Fort Garry and this area of Winnipeg, neither of which at this point are certain that they are getting their s, I wonder if the Minister through his Deputy Minister co uld bring the Commi ttee up to date as to where we stand on the Fort Garry-St . Vital Bridge and on the proposed widening of or improvement of the Os borne Street Bridge . MR. USKIW: Mr .

Chairman, I am advised that the City of Winnipeg is involved in the de sign works in St . Vital , with financial participa tion from the provinc e, and that Underwood McLe llan are involved in a study, corridor study , in connection with it . That 's the stage it's at at the mome nt. I can't give any definitive information on the other one . --(Interjection) --Oh, the city has been given the clearance to go ahead with some de sign work on the Osborne Street Bridge . MR. SHERMAN: Some design wor k. Design work that would have to be presumably sub- mitted to the province. MR . USKIW: Apparently not . MR .

SHERMAN: No ? MR. CHAIRMAN : The Honourable Member for Portage la Prairie. MR 0 G. JOHNSTON : Mr . Chairman , I' m interested in the same comparison as to the priorities establis hed to build a bridge at St . Adolphe, and of course we know it's all provincial participatio n ,

whereas the much talked about and proposed Fort Garry Bridge is a cost-s haring proposi tion between the Ci ty of Winnipeg and the Prov ince . But I come back to what Mr . Henderson said when he would like to know the traf fic coun ts . It seems to me several years ago a precedent was established , for a long time traf fic counts were denied as internal

2280 May 8, 1975 SU PPLY - HIGHWAYS (MR. G. JOHNSTON cont'd ) .•... information and members couldn't receive it, but eventu ally this precedent was broken down and traffic counts were produced . I believe it was on one of the highways leading in to Portage, or one of the provinc ial roads. But in any case there's no lack of prec edent for the Minister to produc e the traffic counts and for the information of the committee and the public 1 I would like to have - if they can 't be produced tonight - the traf fic counts and any other

Document details

Collection	Manitoba — Debates (Hansard)
Citation	30-2-78
Type	hansard
Volume / chapter	30th 2nd hansardpdf 78.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	0f7e219cc29253825ef0e2930cea93df8ef7c798

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