LEGISLATIVE AS SEMBL Y OF MANITOBA Tuesday, 11 June, 1985. Time - 8:00 p.m. CONCURR ENT COMMI TTEES OF SUPPLY SUPPLY - HOUS ING MR. CHAIRMAN, C. Santos: Committee please come to order. This

section of the Committee of Supply will now be dealing with the Estimates of the Department of Housing. We shall begin with a statement from the Honourable Minister responsible for the department. Mr. Minister. HON. J. BUCKLASCHUK: Thank you very much, Mr. Chairman. We have some notes here for distribution. I am especially pleased to deliver these opening remarks as the Minister of Housing, a portfolio which, I am proud to say, has undergone a considerable degree of re-organization over the past year.

The department now represents the full fu nctional in tegration of provincial housing activities, enabling a more co­ ordinated approach to the increasingly complex housing indus try. To lend further cohesiveness to the department, I now, as Minister of Housing, participate in the decision making process of the board of directors as chairperson of that board. The Estimates before us today for the year ending March 31, 1986, represent a total budget of $44,006,200 representing costs associated with 28 housing related programs and the efforts of 252 staff members.

The activities of this portfolio represent the comprehensive nature of this government's approach to housing, an approach that has balanced social housing activities with stimula tive measures in support of the economic development and job creation priorities of our government. I might add that this approach is one which may well draw the envy of governments throughout Canada for its comprehens ive, bold , inno vative and cost effective nature during times of incr eased pressure on governments to reduce activity in all areas.

This is especially so, given the state of the housing indus try when our government was elected - an indus try pushed toward modern historical lows in production . Manitoba housing has faced, and in deed still faces, major challenges in terms of the housing market and the housing needs of Manitobans. These challenges are being add ressed within the framework of several broad objectives which continue to be refined to reflect the dynamics of the housing market and the practical compl exity of adequacy and equity.

These objectives are fivefold and represent standards by which to measure the activities of the department. They can be summ arized as: 1. To appropriately stimulate and infl uence the activities of the housing market to the benefit of Manitobans and Manitoba as a community. 2. To enhanc e the aff ordab il ity of and accessi bility to adeq ua te housing for Manitoba ns, particularly those of low and moderate income or those with specialized needs. 3. To maintain and imp rove the quality of the housing stock. 4.

To ensure that the level of rent in creases for households reflects in creased costs of operation fairly and that it does not exceed general cost of living incr eases. 5. To provide an equit able basis by which relations between landlords and tenants may be governed and their disputes effectively arbitrated. With respect to the first objective outlined - to stimulate and influence the activities of the housing market - Manitoba Housing has successfully influenc ed the ownership and rental markets, and played a major role in counter-cyclical employment activities with the support of the Manitoba Jobs Fund.

These activities have been designed to influence production in the private rental and home-ownership sectors of the market to promote adequa te supply and capture the stimula tive benefits of such production for the benefit of all Manitobans. The movement of the government to influence the marketplace through inno vative and responsible approaches to home-ownership and urban redevelopment, coupled with a reaso nable use of avai lable non-p rofit housing instruments, has expanded the programming options for Manitobans - a major accomplishment of the government to date.

Firstly, the ownership market and the Homes in Manitoba Program. To date, the affordable new homes, buy and renovate, and infill housing components of the Homes in Manitoba Program have accounted for over 1,800 housing starts and rehabilitations. The Affordable New Homes Program featuring a stable, affordable, long -term mortgage in strument has provided significant stimulus to the construction indus try at appropriate times.

The first phase of Affordable New Homes, coupled with the Federal Government of Canada Home-Ownership Stimulation Program, or CHOSP, helped push first half total housing starts in 1983 to their highest level since 1955. These afford able new home mortgages accounted for a significant percentage of all new single family housing starts that year. Furthermore, the second phase of the affordable new homes initiative in early 1984, helped counter single family ownership declines in the first half of 1984, brought on by in creasing mortgage in terest rates.

The third phase of this initiative, in troduced late in 1984, has reinforced our unde rstanding that the program has not only substantially helped in increasing housing construction activity in general, but has served to stimulate the production of a greater portion of modest, economical, and affordable housing than was previously the case. In short, the program has helped imme nsely to provide inc entives to the home-building indus try - as evidenced by indu stry statistics showing an additional 52 building companies being established since 19 82. 2863

Tuesday, 11 June, 1985 lt has assisted Manitobans to enjoy a competitive industry, optimal choice of production, as well as amongst the most affordable new housing prices in Canada.

In fact, the Ma nitoba Ho me Builde rs Association has called the affordable new homes the "most successful provincial housing program In Canada." Furthermore, through the Manitoba Jobs Fund and Manitoba Housing, the over $80 million of Investment - and I stress investment as this is principally mortgage financing - has substantially stimulated employment, estimated at 3,200 person years of direct and indirect employment over the period of activity. In addition, this approach to programming has been well suited to the government's stlmula tive intentions within bud getary constraints.

In terms of the general housing market, the actual performance in 19 82 and 1984 has been outstanding by recent standards, a fact which is attributable to both this government's stimulative activities and renewed confidence of the housing industry in Manitoba. 1984 housing starts showed an increase of 47 percent over average starts in the previous th ree-year period. This was comprised of an 81 percent increase In multiple unit starts and a 32 percent increase in single family housing starts over the average of the previous three years.

Of further note, overall housing starts for Canada In 1984 were actually 13.2 percent below the average for the previous three years - an indication of just how well the housing Industry has performed in Manitoba. As well, I should note that the Prairie Provinces of Sask atchewan and Alberta had their lowest levels of housing starts in nine years In 1984. The Affordable New Homes Program represented the major component of the Ho mes In Mani toba programming first initiated in 19 82-83.

A second program component was the Core Area lnfill Housing Program, a pilot program under which some 68 units were brought under construction In older inner city neighbourhoods in 1983-84. On the basis of an MHR C sponsored competition, the units were architecturally designed to fit onto smaller existing lots, which were provided for the most part at nominal cost by the City of Winnipeg.

Construction was completed and all of these units were sold in 1983/84 at prices reflecting professionally appra ised values and including a premium for new construction. 19 84-85 saw this gov ernment's continued commitment to the provision of affordable and accessible housing, and to the stimulation of new construction and revitalizationm of older areas in Winnipeg, with the recommended allocation of 90 additional infill housing units. Fifteen of these units were targeted for the Logan area, and the remaining 75 units were targeted for other areas in the core of Winnipeg.

To date, building lots for approximately 60 of these units have been identified and/or acquired. Six units are un der construction, with the construction of approximately 34 additional units to be initiated in the neare future. The development process for infill housing del ivery in the 1984-85 fiscal year was somewhat slower than previously, since most of the suitable lots available through the City of Winnipeg had been used in our previous year's program. Further, due to the scattered nature of available lots, a greater amount of time was required for processing of individual purchases.

However, staff continues to investigate and monitor building lots that have come to their attention, so that infill housing commitments can be met. The prog ram Is deemed to ha ve been highly successful in that typically, purchasers of these units have been existing inner-city residents of low to moderate income who might otherwise have purchased new homes in subu rban developments. Program subsidy costs are short term and modest compared to the ongoing heavy subsidy costs associated with low-income rental housing projects.

The program also serves to address the long-standing historical imbalance between rental and ownership housing, given that increased ownership housing Is deemed required to stabilize these older neighbourhoods. The success of the program has spawned a substantial waiting list of prospective purchasers for new units coming on stream, and the demonstration of the existence of this market has stimulated significant interest on the part of private sector home builders, with whom ongoing discussions discussions are being held as to future participation.

The second major area of stimulative activity in the housing market is taking place in the rental market. The RentaiStart initiative provided by the Manitoba Jobs Fund and Mani toba Housin g promis es to be as successful in the rental market as the Homes In Manitoba Program has been in the home ownership market. This special initiative is called for by the tight rental market vacancy rate in Winnipeg specifically and by the lack of adequate rental accommodation in certain rural communities. Access to capital at reasonable Interest rates is a main concern of developers of rental housing.

Those conditions are being provided or addressed by RentaiStart Initiatives which feature direct financing at preferential interest rates for a seven year term, amortized over 35 years for multiple unit rental project. Mortgage refinancing in the private sector Is required after seven years, which means our initial investments are fully recoverable. The first RentaiStart call for proposals in late 1984 was restricted to rural Manitoba and Winnipeg's core area resulted in almost 2,000 units proposed, for a value of $118 million.

The second RentaiStart call for proposals was directed toward the North of Portage Redevelopment area. The commitment of approximately $20 million in financing was made available and could generate 400 rental housing units in that area. The 9.75 percent interest rate was a critical incentive to support the residential component of this urban redevelopment project.

In the most recent RentaiStart announcement, the Manitoba Jobs Fund has offered $45 million at 11 percent mortgage financing for the development of as many as 1,000 rental units throughout the province, with the exception of the North Portage Redevelopment area. This additional initiative has been offered by the Manitoba Jobs Fund because in spite of the improved performance in the rental market, additional pressures have been placed on the market by in-migration to the province.

Further, we are optimistic that the renewed availability of low interest RentaiStart financing will serve to complement both ongoing housing industry activity and Manitoba Housing's direct development activity to ease the tight vacancy situations in our communities. 2864

Tuesday, 11 June, 1985 In addition to these highly visible in itiatives, a number of less apparent programs are also in operation to povide a certain degree of stimulation to the home ownership market. The Core Area Initia tive grant for home ownership encourages residential activity in the core area of Winnip eg by providing a $5,0 00 grant for the purchase of a newly constructed home in that area. Funds and adminis trative support for this program are provided under the partnership agreement with the Federal Government, the Provincial Government and the City of Winnipeg.

This program is of particular importance for the success of our infill program. Fina lly, to ensure an adequate supply of reasonably priced residential building lots, this department has participated in subdivision development in areas where market demand is in evidence. To date, approxima tely 400 lots have been successfully marketed in the Meadows West subdi vision and approximately 100 additiona l lots are in process for development and marketing later this year.

Further, the first phase of the Woodlands subdivision, comprising 43 lots, has been successfully marketed and possible future planning for the development of the second phase of the subdivision should be consi dered sho rtly. These su bdi vision developments are viewed as essential means to improve affordability of housing for purchasers through providing some measures of inf luence over lot prices.

On brief reflection, provincial housing policy has moved from the creation of a much needed, affordable social housing stock, princi pally rental market oriented, reflected in the 1968-77 period, to addressing the critical affordability and accessibility considerations in the home ownersh ip and private rental markets for moderate in come Ma nitobans du ring the'80s.

Notwithstanding this broadening scope of program availabili ty, this government's continued commitment to the affordabillty of and accessibility to adequate housing for Manitobans, as outlined in our second objective, remains a matter of concern and priority to this government. Firstly, social housing commitments per se. These deal with commitments of both public and private non­ profits eligible for assistance under

Section 56. 1 of The National Housing Act, and rural and Northern housing activities under

Section 40 of The National Housing Act. During the period 1979 -81, the previous admin istration mana ged to commit only approxima tely 300 housing units under this program. From 1982 through 1984, this government has committed over 1, 200 un its unde r this prog ramming. And we will continue to commit rental housing units for low income families and senior citizens under the three year public non-pr ofit housing program which I, as Min ister of Housing, announced in the spring of 1984.

I must emphasize that the commitment of this government to housing programming directed to low income families and senior citizens, to the dir ect construction of adequ ate, suitable and affordable housing un its, is in stark constrast to, in fact an in crease to four times the level of activity of the previous admin istration. Furthermore, the effective targeting of assistance under the pub lic no n-profit housing program is unma tched throughout most of Canada. lt is, I might add, Immune to the criticism of

Section 56. 1 programming as being poorly targeted. The federal evaluation of the

Section 56. 1 program concludes that overall, the program is poorly targeted - an inefficient mechanism for the delivery of social housing to those who are in greatest need. The federal position is now, of course, that benefits should be more effectively targeted to those in greatest need. The public non­ profit housing program in Manitoba is 100 percent targeted to low income families and senior citizens as a result of provincial contributions. That is a tribute to the commitment of this government to providing adequate social housing.

Social housing plays an important role in the provision of shelter alternatives. The property mana gement branch of my department adminis ters and maintains approxim ately 16,900 units throughout Manitoba. These units house seniors, families and the handicapped, all of whom are selected on the basis of need by local housing authorities. Rent is geared to income with 25 percent of a tenant's income going towards rent. In Manitoba, there are approxima tely 13 0 housing authorities and sponsors ranging in size from six to nine board members.

These boards serve without remuneration, and are generally composed of equal num bers of people appointed to be representatives of the Provincial Government, the mun icipal government, and the tenants living in housing projects admi nistered by the Housing Authority Board. These housing authorities are responsible for the adminstration and ongoing maintenance of the housing units under their management. In addition to social housing, constructed under Sections 43 and 56. 1 of. The National Housing Act, the department also provides subsidized housing through

Section 40 of that act's rural and Northern Program. This activity provides affor da ble housing on an ownership or rental basis, to elderly and family households of low to moderate income In rural or remote communities. There are currently approxima tely 1, 100 rural and Northern rental units operated in Manitoba, with an additiona l 190 units in the development stage, plus close to 100 units proposed for 1985 delivery. .

Manitoba Housing also contributes 25 percent of the operating costs for 825 CMHC R & N uni ts, with this figure in creasing to approxima tely 900 to 950 units by the end of the 85/86 fiscal year. Previou sly, the pr ovincial R & N un its were admini stered through regional offices, with rent/or mortgage payments collected by local agents.

The department is now in the process of developing northern housing authorities for these housing units, so that there will be more in volvement at the local level . it is felt that this is a positive step towards the integration of these units into the community, as well as providing for additiona l inc entive and commitment towards the admin istration and maintenance of these units through in creased local participation. This department will also maintain its commitment towards meeting the specialized housing needs of the hand icapped.

The fourth FOKUS Project, permitting handicapped tenants to reside in an apartment block owned and operated within the private sector, is now in the preliminary stage of development. Further involvement of this department will see the conti nued support and development of group residences for the mentally hand icapped, as well as homes for victims of famil y violence. Finally, given the success of the Ten Ten Sin clair Project, provi ding accommodation for physically 2865

handi capped and paraplegics, another project of a similar nature is in the planning process for The Pas. This project will incorporate housing units for the physically handicapped with specialized housing needs, as well as a num ber of elderly housing units. The development of this project will see the first integrated handicapped and elderly project in a community outside of Winnipeg.

The development of this project, in co­ operation with The Pas Branch of the Manitoba League for the Physically Handicapped, because of its unique nature, will be a great step in our continued commitment to the provision of housing for persons with specialized housing needs. In addition to publ icly-owned and developed social housing, the department is also involved in the provision of financial assistance to private non -profit groups through grants or through rent supplement assistance to tenants.

Rent supplement agreements are currently in place for approximately 1, 700 privately-owned units, with an anticipa ted take-up of approximately 1,1 00 un its. This · supplement provides assistance to low income tenants, through an income related rental rate with the difference between that rent and the economic rent for the unit being cost-shared on a 50/50 basis by the Federal and Provincial Governments. Manitoba Housing continues to provide grants to older private non-profit housing projects which were approved and constructed under The Elderly and Infirm Persons Housing Act.

There are currently approximately 5,200 units in operation throughout the province, and this activity inv olves maintenance of pre vious commitments made to these organ izations with no new commitments under E & IPH activities expected in the near future. Finally in terms of private and non-profit housing projects, the department continues to provide 5 percent of approved project costs to these developments.

However, we are now expan ding our focus from a straight equity contribution, to a grant for enrichment purposes to private and non-profit organizations. lt is anticipated that this contribution will encourage enhancement to the architectural design of the project for inclusion of amenity or supportive service program space beyond that presently permitted under federal guidelines.

The purpose of this initiative will be to provide housing environments which go beyond the mere provision of shelter by addressing the tenants' specialized needs, thereby reducing the demand for cost intens ive, institutionalized options. As such, this is seen as a positive step in our contribution toward both private and non-p rofit developments, as well as specialized housing needs. Currently an average of 500 units per year receive this equity contribution with a cumulative total of approxim ately 2,20 0 to da te receiving equity contribution.

Approxi mately 700 of the tenants receive shelter allowance assistance. lt should be pointed out, however, that our involvement in this area is restricted by the number of private non-profit units available through CMHC each year, therefore program cuts through CMHC result in a corresponding decrease in our required equity contribution. In terms of the shelter allowances just mentioned, this department continues to provide rental assistance to low and moder ate income fam ily and elderly households renting in the private sector. Manitoba is one of the four provinces offering shelter allowance programs.

The others being British Colum bia, New Brunswick and Quebec. A total of over 4,600 clients, both elderly people and low income families li vi ng in private sector rental units, received approxima tely $4.9 mi llio n in shelter allo wance payments made during 19 84-85. This program provides a clear alternative to households with affordability problems who wish to remain in private rental housing. The department also ad min isters the Pensioner Tenants School Tax Assistance Program funded through the Department of Finance.

Under this program, pensioners renting accommodation from the private sector receive annual rebates for the school tax portion of their rent. During the 19 84-85 fiscal year, approxima tely $1. 7 million was paid. to over 8,900 pensioners. Much of this discretionary income is then funnelled back into Manitoba's economy through consumer spen ding. In add ition, to providing rental assistance and tax assistance to Manitoba ns, this department provides mortgage in terest assistance to households through the Mortgage Interest Rate Relief Program.

At this point, I would like to take a moment to talk about the efficiencies in approach to solving housing problems, specifically as exemplified by the Mortgage Int erest Rate Relief Program. This program was introduced by our government early in 1982 to provide support for homeowners facing serious hardship because of high mortgage interest rates. The program was structured to provide dir ect subsidie s to homeowners facing mortgage renewal in a specifically targeted man ner in that it considered ind ividual afford ability.

The cost of the program to date has been in the order of $2.5 million, a worthwhile expen diture to allow over 1, 400 clients to retain their homes. This app roach of targeting assistance based on need was in rather dramatic contrast to the more open ended interest write-down proposed by the Lyon Government similar to that of the Government of Saskatchewan. In fact, it has been estimated that the Saskatchewan program, an across the board interest rate write-down, has cost over $50 million.

The fact that a more responsible, targeted expenditure cost the taxpayers of Manitoba perhaps only 5 percent of what it could have under the former Conservative Government's approach should not be lost. Our government can be credited with an approach to problem resolution, which is responsible and equitable both to those in need and to the taxpayers of Manitoba. Finally , in the discussion of this department's second objective to enhanc e the affordabllity of and accessibility to affordable housing for Manitobans, let me turn for a moment to the Co-op Homestart Program which was announc ed in October, 1984.

This program will provide over $3.6 million to assist Manitobans in terested in establishing new housing co-operatives. The program is divided into three broad program areas. The fi rst area in volves ongoing opera tin g assistance of approved projects to increase accessibility to co-op housing by lower income households. lt is anticipa ted that three projects representing approximately 200 units will be assisted through this program in the 1985-86 fiscal year. The second program area in co-op homestart involves the acquisition and renovation of existing older 2866

Tuesday, 11 June, 1985 buildings, or the conversion of under-utilized non­ residential buildings to residential use to in crease the supply of good quality affordable housing available to low-income households. This program area provides di rect mortgage financing to eligible co-operative groups. There are three project proposals representing 204 units under this program area in the planning stages at present with proposals expected in the near future.

The final program area for co-op homestart provides funding to resource groups for the promoting, planning and early development of potential co-op housing projects. To date, 10 applications for this grant for start­ up purposes for an estimated 350 co-op units have been approved; and other applications are currently under consideration.

The Co-op Homestart Program will help make co­ operative housing more affordable to families of all income levels and, at the same time, stimulate new employment opportunities through the construction and maintenance of new housing uni ts, as well as the renovation and rehabilitation of existing residential and non-residential buildings. Through these programs, therefore, the government continues to meet its commitment to enhancement of adequate and affordable housing for Manitobans. The third objective that I mentioned earlier, involves impr ovement to the quality of housing stock in the province.

In terms of reinforcing urban development objectives of the province, it is an objective of Manitoba Housing to continue its efforts to stimulate the rehabilitation of the currently existing housing stock. The age and condition of the housing stock in Manitoba has inc reased pressure for activity in the rep air and rehabilitation area. About 26 percent of the housing stock was built prior to 1946 and almost 50 percent prior to 1960. Some 25 percent of the total stock has been defined in need of repairs representing about 90,000 units, with about 25,000 units requiring major rehabilitation.

To this end and in keeping with the departmental objective to maintain and improve the quality of housing stock, Manitoba Housing will continue its involvement in the area of rehabilitation through such programs as the Critical Home Repair Program, Buy and Renovate, and the admin istration of the Residential Rehabil itation Assistance Program. I would like to draw to your attention the activities under the Critical Home Repair Program.

As you know, this program has been in effect for some time. lt assists low income senior citizen and family homeowners to repair their homes by providing grants and partially forgivable loans. From 1979-8 1, a total of $2.8 million was committed for the repair of some 3,100 units. By 1981, program commitments were dwindling as a result of a lack of commitment on behalf of the previous admin istration to upgrade program benefit levels. Subs equently, in 1982, our government substantia lly revised the program to make it more accessible to low income senior citizens and families.

Since that time, approxima tely $10.6 million has been committed for the repair of almost 8,500 homes of low income seniors and families. Again, I cannot und erstate the marked · differences in approach of our government from the previous admin istration in meeting the needs of low income homeowners. We have, in fact, almost tripled the num ber of homeowners who have benefited from the Critical Home Repair Program whi le, at the same time, providing an important stimulus to the small contractors who most frequently do these type of repairs.

The second area of in volvement in housing rehabi litation is the Buy and Reno vate Program available through our Homes In Manitoba Program. This program provides an incentive to purchase and upgrade existing homes, particularly in the older areas of cities and towns. Low in terest mortgages are available to home purchasers for homes which are a minimum of 30 years old, cost no more than $35,000, and which require that an additional $10 ,000 be spent on renovations. Due to the complex nature of this program, certain adminis trative difficulties were encountered at the outset of the program.

However, the department has now developed, and is in the process of implementing procedures which will streamline the process. A total of 11 7 buy and renovate mortga ges have been committed to date, with an additional 27 mortgage applications in process. lt is anticipa ted that, through our continued involvement in this area, the buy and renovate program will continue to stimulate activity in the home renovation and home repair trades. Thirdly , I must note the delivery levels of Manitoba Housing un der the federally funded Residential Rehabil itation Assistance Program (RRAP ).

The department delivers a portion of this program in certain designa ted communities for the Federal Government. The program provides partially forgiveable loans of up to $10 ,000 for the major rehabilitation of housing units. lt is a valuable program to Manitoba in that it provides for much more extensive rehabilitation of housing units than is pos si ble under the Cr itic al Home Repair Program. lt is a program which is fully funded by the Federal Government.

From 1979 through 1981, a total of 550 units were committed for repair at a cost of $2.2 million through the Manitoba Housing and Renewal Corporation, unde r the previous Cons ervative admin istration. During the 1982-84 period, over 1, 000 units were committed by the department under the RRAP program for a total of about $6.9 million. The di fference in performance is clear. Our government has been able to commit to repair almost twice as many units during its first three years as the previous administration committed from 1979 through 198 1.

In fact, the 1984 commitment almost equals the entire commitment over 1979-81. And furthermore, the $6.9 million in activity, generated through a more aggressive provincial use of federal funds, has an im portant stimu lative effect on both materials pu rchased and job creation for small renovation contractors and tradespeople in Manitoba. In addition to these primary involvements in the renovation and rehabilitation of existing housing stock through out the province, this department is also involved in the admin istration of the CHEC Program available through Energy and Mines.

Manitoba Housing provides inspection and complaint resolution services, on a fee for service basis, to the extent of approximately 400 inspections per year. The department is also involved in the adminis tration of the Core Area Ini tiative's Home Repair Program, as part of the tri-level agreement between the Federal, 2867

Tue1day, 11 June, 1985 Provincia l and City Gove rnments. Provincial contribution involves writing down the in terest rate on federal loans available to the core area residents through RRAP, on an in come-related basis to home­ owners and landlords. Sixteen hundred and fifty-five units have been rehabilita ted to date and a total of 760 clients are currently receiving benefits of the provincial input. I turn now to the department's fourth objective dealing with rent control. Our government intends to examine possible streamlining of the admini stration of this legislation.

The evidence is far from clear to support the premise that rent controls are a major inhibitor of rental housing construction. While controls per se may well be a factor in rental investment decisions, they are equally unlikely to be a primary cause of low levels of rental housing construction. Various studies, undoubtedly with narr ow in terests in mind, successively ignore several of the real major factors in rental housing construction, most notably mortgage interest rates and access to capital. Failing sufficient evidence, the proponents of rent decontrol drag out the "bogeyman" of "confid ence" of investors.

I can assure you that in creases in una ssisted rental unit starts in both 1983 and 1984 in Manitoba clearly indic ate a growing confidence in the Manitoba rental market. Recent absorption rates in un its assisted through the Canada Rental Supply Plan - where projects were fully rented in as little as 10 weeks as opposed to a more normal planned rent-up - a period of, say, 10 months- clearly evidence the existence of effective market demand - another more concrete factor in rental housing construc tion.

And, in point of fa ct, as I mentioned earlier, multiple unit starts in 1984 represent an 81 percent in crease over the average of the last three years. So I would like to stress that the regulatory activities of the Department of Housing are di rected to the support of an orderly, equitable rental market. In 1984-85 the Rent Regulation Bureau received over 9,700 applications by landlords for rental in creases above guideline. These applcations were in addition to the 4,386 applications which were carried over from the previous year.

Of the applications under review, 9, 17 0 were determined and resolved, and an additional 325 applications were subsequently withdrawn, leaving 4,592 applications to be carried over for consideration in 1985. In addition to applications by landlords, 403 files were processed for objections raised by tenants, with respect to rental in creases. One hundred and sixty-seven of these cases were determined and 97 objections were withdrawn, leaving a carryover to 1985 of 139 active files. The Rent Appeals Branch processed a total of 2,657 appeals in 19 84.

In 21.3 percent the rental recommendation was upheld, and in 78.7 percent the recommendation was varied. One hun dred and forty­ six applications for rehabilitation were approved, and 60 applications were rejected. One hundred and twenty­ seven applications for exemption from rent regulation were approved, and 43 applications are currently under consideration. The developing trend toward a stable level of activity from year to year is apparent across all areas of the Rent Regulations Bureau's responsibilities.

Our final objective stated, is to provide an equitable basis by which relations between landlords and tenants may be governed and their dis putes effectively arbitrated. The office of the Rentalsman is concerned with all matters relative to residential tenancies in Manitoba, and the past year saw continued demand for the services of this office, with almost 5,300 complaints initiated during 1984. Combined with the files carried over the previous year, this represented approxima tely 6,600 files requiring action through the office of the Rentalsman.

Of these files, over 4,800 cases were processed with files closed in 1984. A total of 334 cash settlements were awarded in 19 84, amounting to approximately $8 1 ,700.00. Eight hundred and thirty-six non- cash settlements were settled and 1, 422 landlord/tenant disputes were arbitrated through the office of the Rentalsman. Roughly one-third of these complaints were related to security deposits.

The review of The Landlord and Tenant Act currently under way, will examine this area and other areas of the act, with the aim of streamlining the process and hopefully resolving some of the longstanding issues of contention. I have spoken tonight on the fundamentally different approaches to housing activit ies of the former Conservative Government and our government. The housing ini tiatives of our government have been considerable. The meeting of the diverse housing needs of Ma ni tobans in terms of adequ acy, suitabil ity, afford ability and accessibility is in deed a complex task.

Our government has taken a comprehensive approach which recognizes both the variety of influences and actors in the housing market. The commitment of social housing supply has been maintained, in fact, in creased significantly over the commitment of the previous Conservative Government. In addition, our government has taken initiative and responsible approaches to both the rental and home ownership market which have expanded the housing options of Manitobans and provided a much needed revitalization of the housing indu stry. MR. CHAIRMAN: Thank you, Mr. Minis ter.

As is the usual practice in this comm ittee, the leading critic of the opposition will now give his reply to the Min ister's opening statement, which has gone beyond 30 minu tes. Thank you. MR. R. NORDMAN: I would choose, Mr. Chairman, to carry on with the Estimates and we will go through this as we go through the Estimates and I know the Member for Sturgeon Creek and I will have questions to bring forward out of this. I would hope that we would carry on maybe until 10 o'clock and then maybe tomorrow, to give us time to digest this, because it's a pretty comprehensive report. So unless Mr.

Johnston has somet hing to add to it, we would carry on with the . . . MR. CHAIRMAN: Thank you. At this point in time, the Chair invites the members of the departmental staff to kindly take their respective places. Deferring Item No. 1. (a), relating to the Min ister's Salary as the last item for consideration by this comm ittee, we shall begin our deli berations on budget Item 1. (b)

(1) General Administration, Executive Support: Sal aries; 1. (b)

(2) Other Expenditures. 2868

TUesday, 11 June, 1985 The Min ister will introduce some members of his staff. HON. J. BUCKLASCHUK: Yes, I'd like to introduce my staff. Sitting beside me is the Deputy Minister of Housing, Saul Schube rt; next is Bryan DePape, Executive Director of Support Services; Ken Cassin, the Acting Director of Plannin g; Don llich, our Assistant Deputy Minister for Property Management and Landlord and Tenant Affairs; Bill Kennedy, our Assistant Deputy Min ister responsible for quite a number of the programs, Program Delivery; and Joan Mill er, official title is Acting Director of Communications.

The reason I stall on some of these names is these staff are so versatile it's sometimes hard to remember what they're doing. MR. CHAIRMAN: No excuses. 1. (b )(1); 1. (b )(2). MR. R. NORDMAN: There's not much change in your Salary setup here, there's not much change in the whole clause . Is there any explanation as to what you were doing in there that did in crease the staffing? Is it just regular, normal in creases or have you any more staff than you had before? HON. J. BUCKLASCHUK: These are normal in creases in salary costs and expenses. MR. R.

NORDMAN: Was there a percentage of in crease throughout the department? HON. J. BUCKLASCHUK: The in creases are due to normal salary in creases and increments. MR. R. NORDMAN: But my point was, what percentage of increase was there? Was there an average percentage increase throughout the department or were they basically individual? HON. J. BUCKLASCHUK: I don't have the exact percentage, but I'm advised that it's virtually nil. MR. CHAIRMAN: The Member for Sturgeon Creek. MR. F. JOHNSTON: Mr.

Chairman, does the Mi nister have available to us a breakdown of the department or a graph showing the Minist er, the Deputy Mini ster and the respons ibi lities of the different department heads and what responsib ilities they have? HON. J. BUCKLASCHUK: I can provide you with copies of that very quick ly. MR. CHAIRMAN: The Mem ber for St. Norbert. MR. G. MERCIER: Mr. Chairman, could the Minister advise us as to the cost of the homes constructed in the Logan development? MR. CHAIRMAN: 1t might be conside red under another · item. MR. G. MERCIER: Where? MR. CHAIRMAN: Where is it, Mr. Minister? HON. J.

BUCKLASCHUK: That information can be provided under the

section of Program Delivery, I believe. I can certainly provide you with that information. MR. CHAIRMAN: The staff may not be here. The Mem ber for Assini boia. MR. R. NORDMAN: Prior to getting the Min ister's report, I had written out several questions and one of them, for instance, was how many housing units does the corporation directly admin ister? I believe it's in here somewhere, but could you . . . HON. J. BUCKLASCHUK: The figure I used in my introductory remarks, 16, 900. MR. R. NORDMAN: Have you any idea how many vacant units we have? HON. J.

BUCKLASCHUK: I do have the figures for the units admin istered under the Winnip eg Regional Housing Authority. At the end of April we had 98. MR. R. NORDMAN: 98? HON. J. BUCKLASCHUK: 98 units. MR. R. NORDMAN: Empty? MR. CHAIRMAN: The question from the Member for St. Norbert has not been answered yet. MR. R. NORDMAN: Sorry. HON. J. BUCKLASCHUK: In response to the question from the Member for St. Norbert, I presume the question was in reference to the rehabilitation of existing housing and not the new housing we're providing in that area.

The rehabilitation cost for the 31 units was $696,300, for an average of $22,500 per units. MR. CHAIRMAN: The Member for St. Norbert. MR. G. MERCIER: Mr. Chairman, what about the houses constructed under the Core Area Program? HON. J. BUCKLASCHUK: I don't have the exact figure for that, but I bel ieve tha t the cost is in the neighbourhood of $60,000 per unit. MR. G. MERCIER: Mr. Chairman, what did that cost cover and what did it not cover. Is there other monies spent by other levels of government or agencies? HON. J. BUCKLASCHUK: Yes, I believe that $60,000 figure to include only the cost of construction. MR. G.

MERCIER: That did not include then the servicing costs which were supplied by the City of Winnip eg? HON. J. BUCKLASCHUK: No, it wouldn't. 2869

Tuesday, 11 June, 1185 MR. G. MERCIER: Can the Mi nister indic ate how many houses were involved? HON. J. BUCKLASCHUK: In total, the North Logan Redevelopment Project will in volve some 108 to 124 units. I had previously ind icated that there were 31 that were rehabed; there were seven existing houses that have not been renovated. There are plans, as I indicated in my introductory remarks, for 10 to 15 new single infills. There are four new single infills on the south side.

In addition, there are eight new rental semi's on the south side of Logan under construction or completed; 18 family housing units at 400 Logan; and a further block in the design stages I believe - it's for the 1985 program - of 30 to 35 apartments; for a total, as I indicated, of about 10 8 to 124 units. MR. G. MERCIER: Mr. Chairman, the Minister didn't answer the question though. How many new units were involved in this construction program of over $60,000 per house? HON. J. BUCKLASCHUK: I'm sorry, I didn't understand the question. The answer is four. MR. G.

MERCIER: The Minister ind icated there 112 units in the area. Could he ind icate how many of the units are occupied by tenants who previously lived in that area? HON. J. BUCKLASCHUK: I don't have an exact figure on a num ber of persons who are living in that area who previously lived there, but I do understand that there is considerable interest on the part of the former residents in moving back into that area. So I would expect the percentage would be fairly high, but I don't have an exact percentage at this time. MR. G. MERCIER: Is priority given to people who lived in the area previously? HON. J.

BUCKLASCHUK: Yes, there will be. The project is being managed by the North Logan Development Housing Corporation. They will be receiving applications and they'll be making those decisi ons, but from what I am told there has been considerable interest in former residents moving back into that area. MR. G. MERCIER: Mr. Chairman, what percentage of these units will be owned by residents? HON. J. BUCKLASCHUK: Roughly about one-half. MR. G. MERCIER: What is the average purchase price compared to the cost of construction? HON. J.

BUCKLASCHUK: I can perhaps provide you with some rough figures here. lt's anticipated that the selling price for the rehab units will be around $35,000, considering the actual cost might have been 45-50, so we're looking at about 80 percent, 75 percent to 80 percent of actual cost. With respect to the newer units, they'll be selling for around $45,000, assuming that the total cost, including services, will be about $65, 000; so we're looking at about 65 percent to 70 percent. MR. G. MERCIER: Mr.

Chairman, how does the Minister of a corporation determine who is fortunate enough to buy a home for that percentage of its actual cost? HON. J. BUCKLASCHUK: I'll answer this in three parts. First of all, the preference is for previous residents. The selling price is based on an appraised value as determined by a professional appraiser for the rehab units and for the new ones, it's the appraised value plus 10 percent. MR. G. MERCIER: Mr. Chairman, did the Mi nister not though indicate that the sale price was in the area of three-quarters of the actual cost of construction? Is that not correct? HON. J.

BUCKLASCHUK: Yes, I did so Indicate. MR. G. MERCIER: Mr. Chairman, that has to beg the question, the corporation is buildin g homes, for example, just to use a figure of $60,000 and selling them for $45,000, because that's somebody's appraisal of the value of the home. Is that what he's sayi ng? HON. J. BUCKLASCHUK: Yes, that in fact is what I'm saying. The professionally appraised value of the homes does not match the cost of building that home. That's nothing unusual, whether it's North Logan or whether it's the core area of Winnipeg or rural Manitoba. MR. G. MERCIER: Great business to be in. Mr.

Chairman, does a similar program exist anywhere else in the province where the government builds a home and sells them for three-quarters of the cost of construction? HON. J.

BUCKLASCHUK: Perhaps not In exactly the same mann er, but certainly in Northern Manitoba, under the Rural and Northern Housing Programs, homes are sold at a cost, but the mortgage payments are geared to income and, in effect, there is an equal subsidy to those homeowners as there is in the core area or North Logan, although it's not as visible, that's all. it's a different approach, but the intent is still the same, to provide for affordable housing. MR. G. MERCIER: What is the criteria then that is applied when approving a purchaser for a home in this area? HON. J.

BUCKLASCHUK: The criteria would be that the prospective home owner would have to be able to provide the necessary equity, which I believe is around 10 percent and would have earnings or income to be able to maintain the normal payments on that home. MR. G. MERCIER: Mr. Chairman, there are thousands of young people in this province who have to scratch to find a 10 percent down payment on a house and to qualify for a mortgage with a lender to buy a home and make a lot of sacrifices to be able to do that.

In this case, I can appreciate that people who probably are buying these homes are in the same situation, but they're putting 10 percent down, but they're getting a house worth 25 percent more than what they're paying 2870

TUesday, 11 June, 1985 for it, because those are the construction costs to the government. There's no developer in the city or other contractor who's building homes at a cost of $60,000 and selling them for $45,000.00. I find it difficult to believe that the taxpayers' money should be used in that way.

That would indicate, going back to the very beginning of this whole North Logan scheme, what a boondoggle it was and what a political decision was made by this government in changing the core area plan for this area and then, backed into this corner, they found themselves building homes that they could only sell for th ree­ quarters of the value of construction cost. Mr. Chairman, I would ask the Minister how much money is going to be spent by the government in total in this area and what are the continuing annual costs to the government or the corporation? MR.

CHAIRMAN: Does the Minister of Agriculture want to speak? The Minister of Tourism. HON. J. STORIE: Mr. Chairman, while the Minister is identifying the specific costs anticipated for this program, I think that it should be pointed out that the Member for St. Norbert has missed one of the essential aspects of the rationale for developing the infill housing area. it is, in essence, a public housing program. it is also an attempt to rejuvenate the core area of Winnipeg and fits in with a numb er of other strategies being put in place by the Department of Housing and the Department of Urban Affairs.

I would ask him to do some quick arithmetic and tell us in his opinion which is going to cost the province a greater amount in the long run; a $1 5,000 reduction in the assessed value of a home where we have ownership, where there are no ongoing operating costs to the province. First there's a 60,000 or a 70,000 per unit investment in public housing with ongoing operating costs. I think that to anyone it would be fairly obvious that this way of providing some incentive for low income housing is a far superior method to the building of straight public housing.

In the second instance, it is also a way of rejuvenating the core area of Winnipeg. Purchase of an infill housing unit in the core area, in an area, one of the streets where I know there are a numb er of units is on Alexander in the North Point Douglas area, there is some housing, and I would invite the Member for St. No rbert if he feels this is a program that is so advantageous to consider moving into one of those areas. We believe that it is worthwhile.

I feel some responsibility because l was the Minister responsible when the program actually got under way. l had a chance to tour the areas. l had a chance to see the houses. I think that it's worthwhile to have people moving back into that area. While there is a deep subsidy in the first instance, it is no greater - in fact, it is far less than the cost of the alternatives of providing housing. Besides meeting the objectives of providing low cost housing, it meets the objectives in terms of a renewal.

If you care to take a short trip in the areas where a number of those houses have been put in place on the same street, I think you will notice a significant difference in the atmosphere, the environment. We believe that those particular infill units, along with some of the Buy and Renovate Program houses, along with the incentives provided through RRAP and CHAP , we see a regeneration and a redevelopment in some areas where it was not previously thought possible. I think the Member for St.

Norbert is wrong on two counts: He's wrong in that it costs more money from the public purse; he's wrong in that it meets a second objective which he has obviously not considered very important. We have considered it important that the neighbourhoods where the infill housing is going consider it important. The City of Winnipeg, I believe, thinks it's important. I suppose the member is entitled to his own view, but I think that his view is certainly at odds with the facts of the matter.

North Point Douglas, also for the Honourable Minister, is suffering seriously from PC contaminants according to Abe Kovnats; not PCBs. He indicated it was PC contaminants. I assured him it wasn't contagious. MR. CHAIRMAN: Thank you, Mr. Minister. HON. J. STORIE: Thank you, Mr. Chairman. MR. CHAIRMAN: The Minister of Housing. HON. J. BUCKLASCHUK: Yes, I can provide some figures as to the cost of the housing component of this North Logan redevelopment.

The land acquisition for the housing is roughly three-quarters of a million; the cost of moving the houses and providing new foundations, l believe, 345,000; the cost of the municipal servicing is 900,000. We made reference to th e rehabilitation of those 30-some units which was about 600,000 and about 200,000 for the four infill units. So, roughly a total of about 2.8, 2.9 million. Now, there are some recoveries. There is a $1. 3 million recovery from the Core Area Initiative. There is a $1 00, 000 recovery from Canada Mortgage and Housing, which leaves us with a net cost of $1. 5 million.

Now, a large portion of this 1. 5 million will be recovered through mortgage payments. MR. CHAIRMAN : The Member for St. Norbert. MR. G. MERCIER: Mr. Chairman, the $2.9 million covers how many units? HON. J. BUCKLASCHUK: it wouldn't be correct for me to give a figure of 35 or 75 or whatever, because when we talked about the $900,000 for Mu nicipal Services, this will, In fact, service the 108 to 124 units that are to be built. They're not all there so we shouldn't be attributing that $900,000 cost to the numb er of existing units at the present time.

We should also mention that there will be, in addition to the homes, whether th ey be single famil y or apartments, there will be some businesses, I believe, located In that area, so these servicing costs will have to be spread out over that. MR. G. MERCIER: Mr. Chairman, did the corporation advertise the fact that these units would be available, 2871

TUesday, 11 June, 1985 so that anyone interested in purchasing one of these units at three-quarters of its construction cost could apply? HON. J. BUCKLASCHUK: That is the responsibili ty of the North Logan Development Corporation. If they haven't done so yet, I'm sure they will be doing so. There has been a lot of interest expressed up until now, whether it was through advertising by word of mouth, or whatever, but I do know there's considerable interest. MR. G. MERCIER: Mr.

Chairman, does the Min ister mean to say that the gov ernment is spen ding this amount of money and has no input into how purchasers would be approved? Are there no guidelines established by the corporation? HON. J. BUCKLASCHUK: I suppo se the concern is that this is such a good bargain that the world would be beat ing the doors down of the dev elopment corporation to buy these homes. I guess I didn't get my point across about the appraised value of these homes. The homes, while they may cost $60,000 and have a market value of $45,000, that happens in other parts of the city as well. A MEMBER: Where? HON. J.

BUCKLASCHUK: The selling price of these units does reflect the market value of housing in those areas. That's, I suppo se, the reality of the world. The question is, where? I would suggest that any area within the core probably experiences that same problem and a lot of smaller communi ties in Manitoba. The fact that it may cost $60,000 doesn't mean that that building is worth $60,000 on the market. MR. G. MERCIER: Mr.

Chairman, my question to the Minis ter was, is the corporation not involved in somehow setting some criteria to be followed by the North Logan Housing Corporation in approving the purchasers for these un its, in order to prevent a possibility - I'm not suggesting it's going to happen - but a possi bility that the board may simply sell the homes just to their friends or people they know. Surely there has to be some criteria and surely the government, having expended this amount of mon ey, has to be involved in setting the criteria.

But in not answering that question, the Min ister referred to the fact that there are many other areas where this is taking place; where homes are being constructed and being sold at 75 percent of their construction cost. I would ask him to cite one in stance where people or bui lders or developers or individuals are constructing homes in the City of Winn ipeg and selling them for three-quarters of their construction cost? One ins tance, give me one instance. If they are, they're bankrupt. MR. CHAIRMAN: The Minis ter of Tourism. HON. J. STORIE: I'm rather amazed at the Member for St.

Norbert's lack of appreciation for how the system works. If the Member for St. Norbert found himself a lot on Adelaide Street and decided to build a home for $60,000 worth of goods, materials and labour, and two days later decided, for his own particular reasons, that he had to sell. He would not get $60,000 for that home. MR. G. MERCIER: But who is doing it? Nobody is doing it. HON. J. STORIE: I suppo se because of circumstance, it happens. That's a fact of the marketplace. We live in a real world. MR. G. MERCIER: into reali ty, but . . . . the Premier said you're forced HON. J.

STORIE: You haven't been yet; you will be. - (Interjection) - MR. G. MERCIER: I wonder if the Min ister can answer the question about the criteria? I take it these homes are constructed and turned over to the North Logan Housing Corporation and they approve the purchasers. I'm surmising that from his previous answers; if I'm wrong, perhaps he could let me know. But if that is the case, what is the criteria for approval of purchasers of these homes and does the Minis ter or the Housing Corporation not have any input into ensuring that the North Logan Housing Corpo ration applie s the government criteria? HON. J.

BUCKLASCHUK: Let me just clarify this. The North Logan Deve lopment Corporation takes the applications from those persons who are interested in purchasing homes in that area. The purchasers are then referred to Manitoba Housing, who determines whether or not they have the ability to make payments on those homes. They qualify that way. In addition I am advised, if we're talking about the new infill units, it's the appraised value plus 10 percent; and in addition a eo-loan, a forgiveable loan of $6, 000, which is repayable if the homeowner doesn't maintain that residence or live in that residence for five years.

MR. G. MERCIER: I'm sorry, Mr. Chairman. I think I mis sed the answer I was looking for. How are the purchasers approved, by the government or by the North Logan Housing Corporation? HON. J. BUCKLASCHUK: The applications have to be processed and approved by the department. MR. G. MERCIER: What are the criteria of the department then? HON. J. BUCKLASCHUK: The criteria is that they have to be able to afford to provide the equity and to afford the payments on that residence. MR. G.

MERCIER: As the Min ister ind icated earlier, if this were advertised and people would see this to be a very good bargain and there would be a flood of applicants, is it just going to be first application in that meets the criteria will be approved? HON. J. BUCKLASCHUK: As I ind icated, the priority will be for those persons who lived in the area. Now 2872

Tuesday, 11 June, 1985 if there are an ins ufficient num ber of applications, we do have an expression of interest by about 200-plus persons who are in terested in purchasing infill housing. MR. G. MERCIER: Did the corporation provide any relocation assistance for people who moved out of the area? HON. J. BUCKLASCHUK: No. MR. G. MERCIER: I wonder if the Min ister is aware if the Core Area Program did? HON. J. BUCKLASCHUK: lt may well be that the Core Area Initiative had a program to deal with that. I'm not aware of it. MR. CHAIRMAN: The Mem ber for Assiniboia. MR. A.

NORDMAN: Am I to believe that the services for both the residential and the commercial aspects of this development are in place now? HON. J. BUCKLASCHUK: Yes, they are. MR. A. NORDMAN: Have we any history, or is it too early to assume that any of these homes that have been renovated or rebuilt and sold have had to be repossessed? HON. J. BUCKLASCHUK: There are none that we're aware of that have been repossessed and we're just in the process now of selling off the homes. MR. A. NORDMAN: I know; it's pretty early, so the history of it doesn't extend for that great a period of time.

I think that by the time some of these people buy them and in order to afford them, they are having to be in the $25,000-$35,000 wage bracket and there's just not all that terribly many people that are in that wage bracket that are going to want to build or buy in those particular areas, I don't imagine, or am I wrong? HON. J. BUCKLASCHUK: I'm sorry, what wage bracket were you ... MR. A. NORDMAN: Between $25,000 and $35,000 in order to make their payments. To quali fy, they would have to be making, roughly, say $30,000 here, so I don't know, how many people in that area make that kind of mone y? Am I far out?

HON. J. BUCKLASCHUK: If I recall, from our lnfill Housing Program, which I think had about the same costs as the houses we're looking at here, the incomes need not necessarily be that high. As a matter of fact, I'm quite sure, we have homeowners who have incomes as low as $1 5,000.00. Our experience with the infill housing has been quite good. Staff can't recall a single repossession. MR. A. NORDMAN: If you go by the rule of thumb that housing should not be more than say 25 percent of their earnings then you've got a problem, foreseeably. HON. J.

BUCKLASCHUK: The incomes would likely be higher than 15 ,000; I use that as an example. lt"ll probably be in the neighbourhood of 20,000 and it is considered that a payment of 27 percent to 32 percent is something that the average home owner should be able to handle. MR. CHAIRMAN: The Member for St. Norbert. MR. G. MERCIER: Mr. Chairman, the Manitoba Housing Corporation owns land in south St. Vital purchased many, many years ago. Is that not correct? HON. J. BUCKLASCHUK: That is correct. MR. G.

MERCIER: How would that land be affected by the proposed urban development that was proposed by the Urban Affairs Minis ter? HON. J. BUCKLASCHUK: As it is, part of that land is within the bounda ries and part of it is outside. MR. G. MERCIER: Can the Minister ind icate the total acreage and the acreage within the line and the acreage outside of the line? HON. J. BUCKLASCHUK: With respect to that parcel of land, I believe that about 200 acres are inside the line and about 350 are outside. I also believe that that line is presently under negotiation between Urban Affairs and the City of Winnipeg. MR. G.

MERCIER: Has the Minis ter made any recommendations as to moving that line further south? HON. J. BUCKLASCHUK: Well, I suppo se we have had some influence in that we made Urban Affairs aware of the need for addit ional land for hous ing developments. I would think they would take our concerns into account when the y're negotiating with the City of Winnipeg. MR. G. ME RCIER: Mr. Chairman, what are the intentions of the corporation with respect to the development of that land? HON. J. BUCKLASCHUK: lt would be our intention to bring this land under development as soon as possible.

There are probably a number of routes that we could consider and that might be a proposal call or a joint venture. There are certainly other options available, too. MR. G. MERCIER: Does the Minister of the corporation have any time

schedule in mi nd, the planning development in the very near future, or five years down the line, or 10 years? I asked that, Mr. Chairman, because I notice in driving down Bishop Grandin the other day that there appears to be some activity. I know there are two or three other of the major developers who own land in the vicinity. lt would appear that there is a start to some sort of construction activity in the area. HON. J. BUCKLASCHUK: In terms of a time frame, certainly it would be my hope that we would do 2873

TUeacbly, 11 June, 1985 something within five years. You've ind icated there were some signs of development. I believe that is land owned by Metropolitan Home s and not ours, but we will be probably applying for a plan of subd ivision, or taking some action to get that land under development within the not too distance future. MR. G. MERCIER: Mr. Chairman, does the Min ister of the corporation have any idea as to the type of development they would propose in the area? HON. J.

BUCKLASCHUK: That'll be determined, suppo se, once we confirm how we're going to develop this property but certainly it would be my hope that whatever route we choose and realizing that this is a high end of the city, that there would still be some availability of lots for affordable housing. At the same time, we would like to, as much as possible , maximize the opportunities for these smaller contractors to develop their busi nesses. MR. G. MERCIER: Just one last question. Has the Minister Ind icated a joint venture? He's not opposed to that sort of concept for that particular area with another developer. HON.

J. BUCKLASCHUK: I don't think there'd be any reason why we should oppose that sort of a venture. I'm sure that an agreement could be reached so that the land is developed to our mutual benefit. MR. G. MERCIER: Has the Min ister had any discussions with other developers in the area along that line for the corporation? HON. J. BUCKLASCHUK: Our department has had a discussion with a numb er of developers on this property. No decision has been made but I would hope that when it does come, if we should go the joint venture route, that the developer selected will be done so in a fair and open way. MR.

CHAIRMAN: The Mem ber for Swan River. MR. D. GOU RLAY: Thank you, Mr. Chairman. I wonder if the Minis ter can indi cate what the current rental policy on public housing is at the present in Nor thern Manitoba. HON. J. BUCKLASCHUK: I'm advised that our rent levels are 25 percent of income and that includes the utilities. MR. D. GOUR LAY: The Minis ter ind icates 25 percent of gross income? HON. J. BUCKLASCHUK: Gross income, yes. MR. D. GOUR LAY: Is there a situation where there is a maximum dollar limit, rather than when it reaches a certain limit, which may be lower than the 25 percent? HON. J.

BUCKLASCHUK: I should just clarify. When I said 25 percent of income, that in fact there may be small adjustments, depending on the numb er of children and so on, or dependants. lt can be adjusted down. However, there is no ma ximum, as there isn't in Winnipeg. MR. D. GOU RLAY: The Minis ter is saying, Mr. Chairman, that in Churchill, for in stance, there Is no maximum level on the rental charged by the housing authority. HON. J. BUCKLASCHUK: I got caught on that one.

In fact, Churchill and Leaf Rapids, I believe, are two communi ties where the rent levels are not geared to income , that in fact they are geared in at the lower levels but then they are capped so there is a maximum rent that is payable by the tenant. MR. D. GOUR LAY: Did the Min ister ind icate at a meeting in Churchill recently that this maximum was going to be reviewed and perhaps might be taken off so it would encour age more private housing development? HON. J.

BUCKLASCHUK: Yes, in fact, last March I was at Churchill, at which time I ind icated to a meeting of some 60 or 70 residents that we are looking at increasing the rent levels in our units at Churchill, but there will be a maximum which will be considerably higher than what it is at the present time. MR. D. GOUR LAY: The Mini ster, at that same meeting, also indica ted that they would be announcing, or the government would be announcing a new housing program specifically for the Churchill commun ity. HON. J. BUCKLASCHUK: That's correct.

We felt that if we were to in crease the level of rents to more adequately reflect the real costs that there might be some tenants who would feel that it was to their advantage to own their own homes. Unfortunately, under the various programs that are around, there Is nothing at the present time that would encourage home ownership and we are, in fact, looking at a program that will make home ownership a more attractive option. We have not yet fina lized the details on that program. MR. D.

GOURLAY: So there's no change at this point with respect to the rental policy and a new housing program has not been decided upon. Is this correct? HON. J. BUCKLASCHUK: Well, we are involved in a consulting process. When I went up to Churchill in March it was what we thought might be an acceptable rent level and options. We've had some feedback from the residents, from the agencies and we are taking their concerns into account and working out a program that hopefully will be more acceptable to them. I would certainly hope that we will have something concrete to announce within the next month or two months. MR. D.

GOUR LAY: I wonder if the Minis ter could indic ate how many housing units are presently empty in Churchill, empty for the reason that they're not inhabitable because of whatever reason, dama ges or other problems. HON. J. BUCKLASCHUK: I don't believe that any of our units are empty. There may well be some that are 2874

Tueaday, 11 June, 1985 privately owned, but I think we get right back to the problem that we dealt with when the Member for St. Norbert was talking about costs. The fact is that Churchill residents, under existing situations, there really is no incentive for them to invest in existing housing, to upgrade or whate ver, because they can't recover their costs. We get back the situation of appraised values not reflecting the costs of buildings. MR. D. GOUR LAY: I'm not clear on the Minister's answer.

He indicated that he didn't feel there were any houses that were empty, public houses, empty because of the problem with dam aged facility, whether it was a sewer and water break underneath a home or just a damaged house because of the people that had lived in it previously. HON. J. BUCKLASCHUK: As I indicated, I'm not aware of any of our units being empty. We'll certainly check on that. I've just been advised, in fact, there may be two units that are sitting vacant because of some sewage damage. They are being repaired.

The other units that are empty that may be owned by private individuals, I under stand, are empty because the landlord might well fear that whatever the costs are of keeping that home open, the operating costs, the rent that he could obtain for those buildings would not even pay for the operating costs. MR. D. GOURLAY: Mr. Chairman, I wasn't referring to privately owned homes in this case, because I didn't expect you to know how many privately owned homes are vacant. I'm interested in pt.:blic housing administered through MHR C or the local housing authority.

You indicate there's two housing units that are vacant. HON. J. BUCKLASCHUK: Yes, I'm advised there are two. We'll confirm that and we'll get that information for you tomorrow. MR. D. GOURLAY: The housing units are being repaired at the present time? HON. J. BUCKLASCHUK: Yes, as far as we know the damage is being repaired. I'm advised that the tenants have been relocated , and again I'll confir m th at tomorrow that work is under way to repair those homes. MR. D.

GOURLAY: Information that I received that the Housing Authority did not have sufficient funds to repair the houses, that supposedly are not being lived in at the present time, so I'm just wondering how this operates? Does the Housi ng Aut hority request additional money from the HRC to repair these homes? HON. J. BUCKLASCHUK: Yes, I'm told that in fact monies had not been budg eted for that, but we do have a reserve to take care of emergencies such as that, and that will be looked after. MR. D. GOURLAY: Is it possible the damages could be of such a nature that it may not be feasible to repair . these homes? HON.

J. BUCKLASCHUK: I don't know the extent of the damages, but I do know the replacement cost of a home at Churchill might well be in the $70,000 to $80,000 range. I don't imagine the damage would be anywhere near that extent. MR. D. GOURLAY: I have a couple of other questions. The Minister had indicated in question period the other day that there were some recently constructed EPH units In Churchill, I think 10 units. I'm wondering, did MHR C make the decision as to where these units were to be built? HON. J.

BUCKLASCHUK: Yes, I understand that the site that was chosen would probably have been done in consultation with the local authorities - we do elsewhere - who assist us in determining what is the best site available. I also understand that these units are still under construction, that they're not finished. They will be ready for occupancy in about one month's time. I recall a question a few days ago in the House that I think we referred to them as elderly persons' housing.

In fact while they may be built under the R & N Program extensively as elderly persons' housing, there is an understanding that there will be a movement of families whose numbers may have decreased into these smaller units; therefore freeing up larger units for those families that need that sort of accommodation. MR. D. GOUR LAY: So although they're built as EPH's, they could be used for other family units. Is this what the Minister is saying? HON. J.

BUC KLASCHUK: Yes they're built as a standard one-bedroom EPH model, but in fact they will be used to accommodate - (Interjection) - yes, we call them empty nesters; that is tenants whose children may have left and now they're occupying a three-bedroom home, which they no longer need. We will move thos e persons into the new units, freeing up the existing unit for a family that's in need of housing. MR. D.

GOURLAY: I wonder if the Minister could indicate whether there was any local representation suggesting that the location for these EPH's was not in a location that was desirable because of the proximity to the downtown area. Ttiey were sort of removed from the downtown area and would not be suitable for elderly persons' housing. Was there any submissions made to MHR C to reconsider this type of housing in the particular location? HON. J. BUCKLASCHUK: Neither staff nor I are aware of any submis sions that were made to Manitoba Housing to reconsider that site. MR. D. GOURLAY: Thank you. MR.

CHAIRMAN: The Member for Thompson. MR. S. ASHTON: Thank you, Mr. Chairman. I had some concern to regard to senior citizens' housing. I was wondering If this would be th e appropriate time to raise it? I was in th e other committee. I'm wondering if that would appropriately raised under this item or under . . . 2875

Tueadar, 11 June, 1985 MR. CHAIRMAN: We have done everything else and it's after 10:0 0. MR. S. ASHTON: Okay, if it's no problem I would like to raise a couple of points. it relates to the growing desire in Thompson to see a senior cit izens' facility in our area. In fact in the last few years, I've noticed it each year that the feeling In Thompson has grown that we're at that stage In the development of our community when we do need facilities for our senior citizens. Recently there's been a number of new developments in that regard.

The senior citizens locally are presently organizing a campaign to try and sign up people who would be interested In the senior citizens' facility. In fact they have a num ber of names already. One of the local service organizations has offered its help and assistance. Beyond that, I think, generally the community as a whole has gotten high on the effort to get sen io r cit izens' housi ng developed in the Thompson area. In addition to that, a number of regional organizations such as the MMF have ind icated in terest in putting some of their people in such a facili ty, if it were to be built.

The reason I'm raising it now is because a lot of these things are developing, I feel, to the point where there may be some substantive planning and proposals coming in and I would like to, first of all, pass that on to the Minis ter, the fact that there is an interest in senior citizens for housing, particularly with personal care services; and also ask for the co-operation of the Minister's department. I think it's going to require a fair bit of assistan ce, particularly in terms of getting a model from another commun ity, which might be of assistance to the people in Thompson.

They obviously can't plan this out of the blue, so I would ask both for the Mini ster's personal and his department's support, In the efforts to try and get that facility established in Thompson. MR. CHAIRMAN: Committee rise? The Member for Sturgeon Creek. MR. F. JOHNSTON: Just one request. The Minister refers to 28 programs in his opening remarks and then we have in the Housing Report for the year ending March 31, 1984, the Statement of Operations. I wonder if we could have provided to us a list of the programs and the amount of money appropriated to these programs for the coming year? HON. J.

BUCKLASCHUK: Yes, I think that information can be provided. I'll ask staff to get that information for us for tomorrow. MR. CHAIRMAN: Committee rise. SUPPLY - EDUCATION MR. CHAIRMAN, P. Eyler: Committee come to order. We are considering the Estimates of the Department of Education, Item 3. Fin ancial Support - Public Schools. Does the Min ister have an opening statement? Madam Min ister. HON. M. HEMPHILL: No, Mr. Chairman, when I made my opening statements earlier I included

Section 16.3. MR. CHAIRMAN: 3.(a) - the Mem ber for Morris. MR. C. MANNESS: Mr. Chairman, last year the Mini ster provided to me a breakout, public and private school support. it was a three-page document which I found very inf ormative. it broke out all the various grants and the other support to school division. I'm wondering if she intends to provide that again this year. HON. M. HEMPHILL: Yes, I certainly can. I think we can have that for the member tomor row. MR. C. MANNESS: Mr.

Chairman, I went to such pains last year to express my appreciation and thanks to the Min ister and I compllmented her to such a degree, I just thought she would automatically provide it this year and so that we could save time so that she could prepare adequately for June 27th meeting that's coming up with the parents from St. Pierre. Mr. Chairman, I would then ask the Minis ter If she could tell us - and I'll use this particular document as the format in which I'll ask questions - fi rst of all, how much education support levy is being raised throughout the Province of Manitoba? HON. M.

HEMPHILL: $1 84 million, Mr. Chairman. MR. C. MANNESS: Mr. Chairman, by my calculation, this is roughly $2.5 million more than last year. Can the Min ister tell us why it has gone up given that the levy rates are unchanged, and can she Indicate whether she has a breakout as to how much of this total has come from rural Manitoba and how much of it has come from the City of Winnip eg, or any other breakouts she may wish to give? HON. M. HEMPHILL: Mr. Chairman, the in crease is largely a growth in assessment and we do not have a breakdown between rural and urban. MR. C. MANNESS: Mr.

Chairman, continuing along, provincial support to public and private school boards last year totalled $339 million and change. Can the Min ister tell me how much it will amount to this year? HON. M. HEMPHILL: Mr. Chairman, they're having a bit of trouble relating to the 339. Just give us a minute. MR. C. MANNESS: Mr. Chairman, I'm prepared to share this Information with the Min ister if she wishes, but I have a third line. it says, Provincial Support - 1984 Estimate.

Under the Capital heading, there's an amount of $16, 492, 000, and under the Current, an exp enditur e of $322, 806,000 for a total of $339,299,0 00.00. I'm seeking some ind ication of that total for 1985. HON. M. HEMPHILL: 379, Mr. Chairman. MR. C. MANNESS: Mr. Chairman, this represents some increase of close to $38 million.

I wonder why the change would be so great when the total support to public school divisions, the total in crease - I believe the total amount that's being spent by school di visions, according to the Min ister in her opening remarks, is $573 million, an in crease of $11. 8 million or 2 percent. 2876

Tuesday, 11 June, 1985 HON. M. HEMPHILL: Mr. Chairman, I'm advised that they're still having difficulty understanding the 339. I realize it's information that we gave him before, but since we didn't bring it with us and it's difficult for comparative reasons, they cannot relate to the figures that they have, I suggest, is it possible for us to leave them to sort this out and go on to another question? MR. C. MANNESS: Yes, Mr. Chairman, it is. I would ask one final question though. Private school support - can the Minis ter now indi cate what support private schools in the province can enjoy in 1985? HON. M.

HEMPHILL: Mr. Chairman, there will be three ini tiatives for funding for private schools this year. The block per pupil grant is going to be inc reased the same amount as it is for the public school system, which is what we did last year, the same dollar increase. lt will go from 560 to 622. lt's the same dollar amount as the average student in crease in the public schools and represents an 11 .1 percent increase over the 1984 block grant. We are also making some significant changes in shared service agreements.

We are going to provide public school div isions with fund ing for full-time equivalent private school pupils taking Ind ustrial Arts and Home Economics. Those are the two that are the largest number of programs that are taken through shared services, on the same basis as for public school students. In other words, they will be able to count the students from private schools and get the same funding as they would for those in the public schools and we will not be deducting this from their private school grant.

Previously, they had to choose either the grant or the shared service agreement and if they had shared service, the amount of value of the shared service was deducted. lt will no longer be deducted. We are also extending the private school pupils to have them included in public school enrolment for the calculation of clinician support. As you know, one of the major concerns presented by those in private schools for some time has been access to clinician services for special needs children.

We attempted to address it last year - I think in the middle of the year - by making available to clinicians, through the Child Guidance Clinic, for the purpose of dealing with children specifically from private schools. We've had some difficulty still in meeting the needs, so what we have done, because we quite agree that access to special needs clinician services is something that we think they should have, we have agreed to just simply have them included in the numbers with the public schools. lt can be included in enrolment. The cost - I guess that's enough for now. MR. C. MANNESS: Mr.

Chairman, I asked the Minis ter what the total amount now then would be adding up those changes in three different areas, what would be the total amount in support under the private school system? HON. M. HEMPHILL: The increase for the block grant is $690,000 and the shared services is $31 5,000 and the total of the new support will be just over 1 million, representing the 23.4 percent inc rease in funding of independent schools, and the total amount is $5.2 million. MR. C. MANNESS: Mr. Chairman, that's all the questions I'll ask on these detailed matters at this time.

I'm wondering if the Min ister could provide for me the specific changes that came out of her annou ncement in early, I believe it was Jan uary, with respect to the new GSE formula to be put into place. I'm wondering if she could provide for me the detail associated with the formula changes, indeed if there are any. I don't recollect that detail coming with the press release and I think this is an opportune time to try and have it presented to me. HON. M.

HEMPHILL: Yes, I think probably the member would like that in writing because some of the formulas are fairly complicated, but there are some formula changes and the reason that we don't put them in the press release is that nobody's in terested in them and they never pick up and report on formula changes. I'll describe perhaps just in a short

summary the major components that they get grants und er. First of all, it's categorical grants and those reflect the government's priorities. We then have weighted per pupil block grant and equalization grants, but I believe what the member wants is the formulas that are attached to each of those. We probably can quite easily provide all the formulas for him. MR. C. MANNESS: I'll accept that. Mr.

Chairman, my question though on the area of equalization, I ask the Min ister, without going into detail with the formula, how the new configuration of formulae that come into place provide greater equalization that was in place previously under the old ESP Program? The Min ister has made an awful lot of the fact that this new formula has greater equa lization characteristics built into it. I'm wondering if she can tell me, in a worded response, how that was developed? HON. M. HEMPHILL: I suppose, quite simp ly, Mr.

Chairman, the basis of the formula, the principle of the formula, I suppose, comes from recognition that there is a wide range of ability of school divisions to raise money across the province. The range is there because of the wide range in their balanced assessment, which goes somewhere from about $5,000 at the low, up to about $26,000 at the high. What it means is that the one school division on a mill will raise $5,000; the other school divisions on a mill will raise $26,000.00. So when they're raising their special levy, they have a tremendous difference in their capacity to raise money.

What we did was develop an equalization program that was based on balanced assessment, and over the period was based on two things. The supplement portion that was based on board expenditu res was one component; and the other component was the balanced assessment.

The balanced assessment was developed over a period of two or three years to bring them up to the same level, so that regardless of where you lived in the province or which school division you resided, the equalization formula meant that they could raise the same money on a mill, it brought them up to same level as the top school division in the province. 28n

TQHdar. 11 June, 1985 MR. C. MANNESS: Mr. Chairman, I understand the principle. I'm jus t wondering if the Min ister could provide a better understanding of the mechanics without providing the detail of the formula? What the Mi nister see ms to be saying then is that there's been no increase in the levy that's been applied across all the province; yet greater equalization Is being brought into effect . What she's saying is that some school divisions are going to receive less given the same number of students that they have and everyt hing else being equal.

I'm wondering now if the Min ister can tell me which school divisions are going to receive less? HON. M. HEMPHILL: First of all, no school division will be receiving less this year than they would have received under the old program, because we brought in an additional formula or category that we call the variable block. What we did was make a statement that while we were going through the transition that no school division would get less than they would have received had the old program stayed in place, the Education Support Program.

We applied the variable block and where school divisions were better off under the Education Support Program, we left them getting their funding at that same level. Where they were better off getting it under the new program, we put them under the new program, so that regardless of which division they were in, they really got the best of whichever world that they could fit in. Nobody got less than they would have received under the old program.

About half the divisions are under the old program and about half are under the variable block, which means that half of the school divisions in the province have received a much better level of funding than they would have received had the program stayed the way it was. MR. C. MANNESS: The Mi nister said, "the way it was." I take it she means the way it was going, it would have gone if she hadn't brought in the variable block aspect of her new formula. I take it that's what she means.

Using her words, she's saying that if the old ESP formula had continued in effect they would have been worse off; so I correct her, and if I'm wrong, of course the Mini ster will correct me. Can the Min ister provide a listing to me of those divisions that would have been worse off if she had not brought forward this variable block formula and, just as important ly, indicate to me how they will be impacted, not in 1985, but in 19 86 when they will not be afforded the protection of the variable block to guara ntee that they don't lose'85 over'84. HON. M.

HEMPHILL: First of all, the Member for Morris makes an assumption that a decision has been made that has not been made. When we brought in the changes, we said that we would bring them in slowly. They're major changes; it's difficult to go from a very big complex formula for funding and make a change and make it very quickly and overnight, so that's the reason why we brought in the variable block, for protection; and because we didn't want anybody to get less than they would have received under the old program.

We wanted to improve it for those who that were disadvantaged, but not to have anybody In a lesser position than they would have been. We are presently now going through the process of talking to school divisions and looking at how the formulas were applied and what the Impact was on school divisions. We do know that somewhere between 20 and 25 of the school divisions are in a much better position because of the supplemental program and the application of the variable block. We have not said what's going to happen in a subsequent year, in the next year.

We have said that we don't expect that there would be any drastic change that would significantly alter their level of funding, in relative terms, to what they were receiving before and we will be studying that over the summer and In the early fall, talking to school divisions and finding out what they think the deficiencies or the problems are and making the decisions on ho w to handle the transition period for the coming year. There's been no decision to remove the variable block. MR. C. MANNESS: Mr. Chairman, I find the Mini ster's answer amusing.

I do so not because of what she has to say in isolation, because I have a sense of, after having just read the Estimates process of April, 1981, and also the debate associated with Bill 56, The Education Admin istration Act and The Public Schools Act of 1981; and I have this feel ing of deja vu when I hear her answer because it's almost identical to the answer given by the Mi nister of the Day, Mr.

Keith Cosens, at the time, when he was posed the very same questions and he was charged by tho se who crit icized him for bringing in a th ree-year program and he uses an explanation that the reason it was th ree years was to allow some of the difficulties to come to the surface so they could be changed after that time. Mr.

Chairman, here we are in 1985 - over four years later - and from my perspective, I see where the new program has come and has used almost all the facets of that program which was so heartily criticized by mem bers of the NDP at that time. 1t ha s some refinements built into it and yet the Mi nister is making it sound like it's a program of her own creation and, therfore, it Is better. Mr. Chairman, these are some of the criticisms, and I read them into the record. The Member for St. Vital, Mr. Walding, had this to say and I quote. He's talking about the new program. He says, "Mr.

Chairman, it Is a new financing program that the Mini ster recently brought in. The impre ssion that we got, Mr. Chairman, was that this new Education Support Program, as it's called, is in reality a gl orified foundation program, that it is part of this Mi nister's forward thinking that he has gone back 25 years and dusted off an old Conservative program, put a few more dollars in here and changed a few words there, brought it forward and claimed it was a brand new financing formula." He goes on to say, "lt was a program general ly, Mr. Chairman, that was conceived in haste and born in panic.

We suspect that part of the manoeuvring that has gone on in putting forward this new program has to do with a shifting of money that was in the total budget for Education. What the Mini ster is doing is trimming capital funds and putting them into support programs." 2878

TUeaday, 11 June, 1985 Well, the Min ister laughs because she made an announc ement just the other day with respect to in creased support in the area of capital expenditur es. Mr. Chairman, to continue. That member of the day, who I think was the acting Education critic said and I quote, "The poor low tax areas with a minimum of programming are now effect ively locked into that position.

Those school divisions which are most affluent and have a higher tax base and have been able to give their students much more options in the way of the programming now find themselves in the fortuna te position of having their expenditures guided by a ten­ point-something percent increase on a much higher base than those poor unfortunate school divisions." To continue, Mr. Chairman, if I can find the proper quote. Just a couple of more seconds, Mr. Chairman. Friday, May 1st, Page 3257 of Hansard, these comments were made with respect to the new program by the former Member for St. Johns, Mr. Cherniack.

He's talking about the new education support program.

He says that "The property tax which has been carrying the great burden of taxation has to be relieved and it has to eventually end up as services to property being taxed for services to property, that there has to be a shift towards progressive taxation, that is, taxation on the ability to pay." Further on he says, "Then the rest is borrowed money; money on which the people of Manitoba will be paying interest at excessive rates at a time when the inter est rates today are announced to be the hig hest ever during the time that this government has been paying lip service to bringing matters under control, coming along with the great depths that they do, then taking credit for the fact that this is a great increase, a substantial increase to the financing of education. lt's a phony claim.

Mr. Chairman, I can use those very same words today with respect to firstly, the Minister's formula, which I submit includes virtually all of the same factors and makes reference to the same matters as the former formula under the Education Support Program, other than the small schools grant. Mr. Chairman, I could also go on to claim that the Mini ster's in crease in support of education is at the expense of generations to come. lt is all borrowed money.

So I wanted to put on the record that we realize - at least I realize - fully well that the changes the Mi nister claims have occurred with respect to formula funding are not major, are not major at all. When the Minis ter talks about greater equalization, I ask her, first of all, to point out those divisions that are going to be im pacted the most severely? I also ask that she provide for me, if possible, an ind ication of which school divisions will be increasing their special mill levy, their special levy in support of education within their school divisions?

I also ask that she provide, if possible, or some explanation at least, as to what has happened to government support of educati on, beyond the 80 percent level that it was in 1981? Through all these figures, I can"t tell to what degree the Government of Manitoba is supporting the educational bill within the province. I'm wondering if she can provide that detail for me? HON. M. HEMPHILL: Yes, Mr. Chairman, we can provide the information that the member wanted. We'll have a sheet that shows him the school divisions rece1v1ng funding under the GSE and under the variable block.

I believe we can also gather the information on the special levy that's expected, being raised from the indi vidual school divisions. Before I get into that though, I would like to make a few points or respond to a few of the points that he made. The Member for Morris had suggested that there wasn't really very much change, that we were just tinkering with the old GSE program and that there were very minor changes and not basic changes. I don't agree with that at all. I'd like to outline what some of those changes were.

But first of all I want to remind the Member for Morris, I always said that there was some good elements to the Education Support Program. At no time, when I was debating or discussing it in this House, did I say it was an awful program, that had nothing good about it, and we were wiping out the entire program. I always ind icated what the good elements were and there were a number; and then I also ind icated what the problems and the deficiencies were. What I said we were doing when we brought in the new program was correcting the major deficiencies and that's what we did.

Nevertheless, even though some of the elements are the same, I believe that there's enough change that it is a significantly changed program and I'd like to identify what a few of them are. The Education Support Program, for instance, benefited largely wealthy divisions, big divisions and wealthy divisions; and the Government Support Program is designed and the money is allo cated in a way to benefit the less wealthy divisions.

So that is a redistribution of the existing money. lt's not putting a lot more money into the pot. lt's giving a fairer distribution to the money that is there by allocating it in a way that the weaker, poor school divisions and kids all get a fairer share of the money. Now that's a major change in distribution. The old programs were always designed so that those with larger enrolments and large numb ers and big balanced assessment and big schools got most of the money. That was the way they were always designed, so that's a major change. Another major change is equalizati on.

The member talks about how is it better from our equalization program. The fact is, you didn't have one. There wasn't a special equalization program in the Education Support Program. The only equalization was done through the education support levy. That is the only equalization that there was and we have brought in - the new program offers 100 percent equalization and it's done through our equalization program and the education support levy. So there's a major change there.

The supplemental and equalization - we called it supplemental when we started out in the first year or two - it's now called equalization. lt's the same program. We designed it; we brought it in. lt didn't exist in the old program and that's the point I keep making; that had we not brought it in, half the school divisions in the province would have been in serious fi nancial difficul ty. We keep talking about removing 1980 as the base year and of course we did that.

The new program recognizes both declining and incr easing enrolment, which the other program did not do, didn't recognize inc reasing enrolment and I don't think had quite the 2879

Tuesd•J, 11 June, 1985 degree of recognition for declining enrolment. The new program makes sure that no school division will receive less funding than they did before; and the new program recognizes priority areas. We have given a top priority to categorical grants and that's a major shift, because categorical grants used to be given when everything else had been allocated and they were sort of at the bottom of the pile.

We've now said that when we have a categorical grant as a top priority program, and these programs are compensatory programs, small schools programs, early identification programs; those are the top priority programs of the government. The Native langua ge development program for Natives and the heritage language program. Those get their money first and those are at the top for being funded and then the other block grant and the equalization grants come in after that.

So there's three programs - well four programs there that didn't exist before under categorical that are major programs: compensatory grants; early identification didn't exist, there was no program or no funding for it before; the language development for Natives, we're putting $1 million into that program and have increased it; and the heritage language grant did not exist. So there's major - and I said compensatory at the beginning - so there's three or four major programs that have been brought in that didn't even exist before. There was no grant for them at all. I think that . . . MR. C.

MANNESS: Not under this program . HON. M. HEMPHILL: Yes we brought them in early years, but we confirmed them I suppose. We brought the small schools program In; we brought the heritage language; the compensatory and the early identification; and have confirmed them in the new program. What we did was add them on to the old program before and we have put them inside and legitimized them and put them in as a basic part of the program. - (Interjection) - Yes, legitimized them. MR. C. MANNESS: What do you mean by that? HON. M.

HEMPHILL: I mean that when programs are outside and they're sort of added on as a special grant - (Interjection) - no, when they're outside as a special grant, there Is some question about whether or not the grants are going to continue. When they're a part of the program and inside the program, there Isn't any question. They're clearly a basic part of the program, not just an additional grant. So I think those are major changes and there's another one that's major, special needs.

The way the old program had set up special needs funding and it matters - it's a point whether you're inside or outside of the program, but they were on 100-cent dollars; they were only getting 40-cent dollars, the school divisions; where the money they were supposed to get was not full 100-cent dollars. We changed that so they are now getting 10 0-cent dollars for special needs programming. That's a major change in priority for our specials needs program. I think that - I don't want to belabour the point - I just want to say that it isn't minor changes; it isn't tinkering.

Ther e's major chan ges to the basic components of this program; while I admit we did retain some of the good elements of the old program, which I always said were there. MR. C. MANNESS: Mr. Chairman, I didn't want the debate to drop to the level of arguing degree, but 1 guess I'll have to ask the Minister whether this new program still includes support under these various headings. Firstly under Operating Support, whether it still includes su pport for special needs, co-ordinators and clinicians, high incidence, low incidence I, low incidence 11.

Does it still include support for vocational needs under Other Operating; English as a Second Language, Mr. Chairman, support for transportation, print and non-print public, and of course, as the Minister indicated, still continued support for compensatory grants? Further breaking down the Other Support, does the new program still involved in directing support to tuition fees for non-lndians, special grants, eligible expenditure supplements. Maybe the Minister brought that program in.

Bilingualism, Franc;:ais, Winnipeg Special Grant, Private School Agreements, Non-Residents, School Tax Rebates, Evening Schools, Institutional Programs, Heritage Language. Mr. Chairman, all those were brought into a grant formula under the Education and Support Program brought forward by the former government and I have difficulty listening to the Minister saying that, yes, we maintained some of the good things, but we made significant changes. Mr.

Chairman, I would ask the Minister to put a dollar figure to her significant changes in terms of what she Inherited in the form of the program, particularly in all those areas, because yes, I know she's increased the Special Winnipeg Gr ant from $2 million. No, she inherited it with $1 million, I believe has taken it to $2 million, and now it's at $3 million. I acknowledge that and certainly, as I said before, the Minister Introduced the Small Schools Grant and she's probably increased the Heritage Language Grants, although we'll move into that in fair detail some time later. But the point I'm trying to make, Mr.

Chairman, let not the Minister stand here or in any other public platform and Ind icate that she's made significant changes to the coverage that a num ber, particularly In the area of compensatory grants, as compared to what was in place before because the facts do not bear that out. I know the Minister has not been challenged on that. She keeps making an additional $500,000 grant into one area and, yes, and then their Commu nications Branch runs off and they spin out another one of their 180 press releases and it looks like the Minister Is infusing a significant number of new dollars. Mr.

Chairman, she can play that game, but the point Is I'm not going to stand here or sit here and listen to the Minister say that she now has taken the very best, the few good things out of the old program, and built on to it a new formula that allows a much more equal and a better treatment of the disadvantaged In our community at large, because she can't justify that statement with dollars. The point I'm trying to make is that she's using basically the same formula that has been in place now fo: four y·�ars. She-'s decided to c:hange the name of 2880 for years She's

l'uftdaJ, 11 June, 1115 it and she, yes, has introduced two or three other areas and she's indicated which they are. But the point Is, the Minister cannot stand up and make the claim, as she has on so many occasions, that this new formula is something completely different and therefore, in being different, is exceptional in itself. Mr. Chairman, the Minister said in 1983, she said to the Member for Tuxedo, my leader now, on Page 2191 of Hansard, she said, in response to a question ... Pardon me, it was a question posed by myself. I didn't read who had posed the question. lt's a better question than I thought now.

I asked a question about inequities in talking about the fact that we have, within this province, a very outdated assessment base; and I asked the Minister at that time how she could put so much faith in the balanced assessment figures as they now exist, particularly in light of two things. Firstly, the fact that the City of Winnipeg assessments have been frozen for how many years. How many years have the City of Winnipeg assessments been frozen?

And secondly, the fact, and I say this today, the fact that the Minister's Assistant Deputy conducted a major inquiry into education finance and heard representation after representation as to the unfairness and the Inequity associated with assessment in place today. Still we have no major change. The formula for assessment, which then becomes the foundation for levying of taxation, Mr. Chairman, is still in place. Yet, in 1983, in response to my concern, this is what the Minister said, and I quote, "I did think after that 1-hadn't touched on the inequities, the assessment and the effect on farmers.

I can only say that it has been a long-sta nding program problem; it didn't just come this year, one that we've all recognized for some time as being a major problem," and I emphasize this part, "and that in the education finance review we have identified the disparity in assessment basis, one of the major deficiencies that we have to look at in any of our fo rmula s; so I'm expecting tha t some recommendations and information In that area will be part of the education finance review." Mr. Chairman, Mr.

Nicholls made some remarks with respect to that whole area of inequity and yet what does the Minister do in Janua ry of 1984? In a rush to do away with that old line administration ESP formula, she creates, as the Member for St. Vital said in 198 1, a program that was conceived in haste and born in panic. The very weakness, the most glaring weakness of the ESP Program developed in 1981 was the fact that it relied on assessments that were outdated and were, for the basic part, totally unfair. Yet, the Minister in 1985 brings forward a program based on those same shortcomings.

In 1983, it was a problem, but today when the Minister talks in glowing terms about equalization and how finally, now, after all these years, we're to the point where we will raise the same number of dollars by a one mill levy in a wealthy division as in a poor one. She fails to understand that there are many, many property owners in this province who are crying out for her government to bring some fairness into the whole area of assess ment. Yet, it becomes the measurement, Mr. Chairman, and it becomes the basis for the Minister to stand in her place and claim that · now we've got perfect equalization.

I don't see how the Minister in two respects, Mr. Chairman, can get away with saying, firstly, they've now corrected all the ills of that former formula; secondly, they've introduced equalization now where it was totally lacking before. The only way that the former program and formula equalized was through the education support levy; it was the only equalization factor. Yet, the Minister has stood here now for three years in a row and said that the levies have not changed; the provincial levies have not changed. What are they - 41.7 and 83?

If they haven't changed can the Minister tell me then how come the only equalizing factor between school divisions was the education support levy if, in effect, Mr. Chairman, they were the same to all? I've covered a lot of ground. The Minister may wish to respond. HON. M. HEMPHILL: Only a few points, I think, Mr. Chairman. it's 43.7 mills and 81. 7 mills.

I hardly think that really a first-ever public review that took place over a very long period of time, over a year with meetings being held all over the province and representation and briefs and positions put forward by hundr eds of groups and orga nizat ions and individuals in person and then many, many more in writing with a lot of study and examination of those recommendations in the information that came out of the public meetings can hardly be called something that was conceived in haste. it's the first of its kind where the Department of Education has gone outside of its own walls and consulted, I think, with the education community at large and the public In general and received information and had a fair influence on its determination.

MR. C. MANNESS: I'm not being critical of the report. HON. M. HEMPHILL: No, I didn't say you were. You said that what we brought in was "conceived In haste" and what we brought In was the report and I'm saying the amount of time and study and consideration that was taken prior to bringing it in. There was one other point I wanted to make. What were your other major points, do you think? MR. C. MANNESS: Assessment. HON. M. HEMPHILL: Yes, assessment. Thank you. The Member for Morris raises an issue. First of all, we have never said that the equalization program is a perfect equalization program.

We started it two years ago and it went - what did we start at, 11? A MEMBER: What do you mean you started it two years ago? HON. M. HEMPHILL: We started at 11 million and then went to 16 million and then 23 and now $53 million. We've been moving towards achieving this 100 percent equalization over a fair period of time. lt certainly isn't pertect but I'll tell you it is needed and it's badly needed. If it didn't exist we would be in big trouble. I'm not suggesting that the equalization program is the answer to the assessment problem or decisions that are going to have to be made there.

We've never said that it was. The member kno ws tha t is not in my area of responsibility. I do not answer for what Is or is not 2881

Tuesday, 11 June, 1985 happening there, but I do answer for what's happening in education. I can say that with the funding and the criteria and the formulas that were there and the assessment that were there, we knew we had to bring in an equalization program and formula, and we did. lt means that education is doing the best job that it can to meet the disparity related to balanc ed assessment that it can possibly do within its ability. MR. C. MANNESS: Well, Mr. Chairman, I'm astonished that the Minister says that she has brought in equalization.

I mean, that was a fundam ental part of the program, maybe not on a strict formula sense as she identifies it. That was a fundamental principle of the program brought in by the former Minister. How could she not know that? Done away with was the Greater Winnipeg Equal ization Levy which attempted to equalize. lt was done away with and replaced with the Education Support Program, Mr. Chairman. In referring again to Hansard April 6, 1981, Page 2463, the Minister of that day, Mr. Cosens, indicated that what was happening, and he's talking about urba n Winnipeg, and I quote, Mr. Chairman.

"Now if we look at 1981 under the new program which the honourable member is very critical of in many respects, Winnipeg No. 1 homeowners will pay a total school tax of 67.2 mills. At the other end of a scale, Mr. Chairman, we find the homeowner in Transcona-Springfield paying 77.4. There is still a discrepancy there. That's granted but the discrepancy now is much less." What he's meaning is that previously that discrepancy within urban Winnipeg was somewhere around 40 mills, Mr. Chairman, and I can dig that out if the Minister chal lenges me on this.

Let not the Minister say that equalization was not coming in place under the former program. For her to say so tells me that she has a total lack of understanding with respect to the program that she's bringing forward. Mr. Chairman, I'm sorry I didn't hear the comment offered by the Minister of the Environment. I'm sure it was most relevant to this discussion though and if he'd care to repeat it l'll listen. - (Interjection)- Well, Mr. Chairman, he still sits there mumbling. I still can't detect what it is he's saying. The Minister talks about assessment, Mr.

Chairman, and how she realizes that there are problems within the area of assess ment and how it is in somebody else's purview. it's not within the Ministry of Education. I accept that. When the Minister stands up and makes public statements, and I gather from her previous comment that she doesn't understand that the basic underlying foundation of all the formulas, is the balanced assessment.

If she doesn't understand that, then every other conclusion that she draws when she makes comments that equalization is now reaching a position of optimum, tells me tha t the Minister do esn't understand financing at all and in her own mind believes that there's total fairness in the area of levying taxation in support of education.

Why would the Minister not admi t when she introduced her new formula in January, 1985, that there still are major differences and disagreements and inequities between municipalities and school divisicns and rural and ur ban Man itoba with respect to assessment and, therefore, the degree to which various people in this province make contribution to the total tax bill in support of education. You would never gather that though, Mr. Chairman, from any of the public utterances of the Minister. She claims that this new GSE Program cleans up many of the shortcomings.

I heard her say on many occasions many of the shortcomings under the old program. 1 submit, Mr. Chairman, it really doesn't at all talk or challenge or address the problem associated with the unequal sharing of the cost of education in this province. The Minister may want to believe that it does and she may want to delude herself into believing so for years to come but I'm standing and putting on the record tonight that it doesn't. Mr. Chairman, another point the Minister made with respect to categorical grants. She says it's a top priority now. it's not at the bottom of the list as it was before.

I don't quite fully understand what she means by that statement. I go to the Annual Report which provides for us a review of the formula that has been in place four years previous to 1985 and all the grants are covered in three areas. They're covered in the Annual Report within the operating support, extra-operating support and capital support. Mr. Chairman, I see, for instance, English as a Second Language and the formulas in place. lt says, "In divisions - under 6.(

a) Page 44 - it says, "English as a Second Language Support for immigrants/natives is either (a), (

b) or (

c) but may not exceed the total." Now maybe it's that reference to "not exceeding the total" that the Minister is making reference to, but the formula is in place. lt says, "(

a) In divisions where immigrant/native enrolment is less than 1 percent of the eligible enrolment, the immigrant/native enrolment is multiplied by $600.00." Then there are various classifications beyond that. Another area talking about special needs support. Yes, they're broken into (a), (b), (

c) and (

d) and the total of the four may not exceed the total expenditures for special needs but the formulas are in place and I pick out (c), for instance, "Low incidence I support based on $3,300 for each pupil who is trainable mentally handicapped, moderately multi-handicapped, severely physically handicapped," and so on. So what does the Mi nister mean that under the previous program that these categorical grants were given bottom priority now that she's increased them to top priority? HON. M. HEMPHILL: Mr.

Chairman, it's a little hard to know where to start because that was fairly long discussion with quite a number of points made in it and I want to try and address a num ber of them. I think first of all it's important to go on record in terms of the equalization, I think the Member for Morris suggested that - I can't quite remember what his words were and I didn't write them down when he was talking about our equalization program. I think the loss has been his memory and that's because in 1981 there was a greater equalization program. They wiped it out in'81.

Your government removed the greater equalization program In 1981 and what you did instead was you brought in the education support levy and what I said earlier is that the only equalization was the education, bu' you removed - you 'Tlade referenc.e to the greater 2882

1'Ueedq 11 June, 188S equalization program - (Int erjection) - as if it existed. - (I nterjection) - MA. C. MANNESS: Greater Winnipeg. I said it was removed ... HON. M. HEMPHILL: The greater equalization was the Greater Winnipeg equalization, okay, was removed . You brought in the education s