LEGISLATIVE ASSEMBLY OF MANITOBA Thursday, 19 March, 1987. Time - 1:30 p.m. OPENING PRAYER by Madam Speaker. MADAM SPEAKER, Hon. M. Phillips: Presenting Petitions . .. Reading and Receiving Petitions ... Presenting Reports by Standing and Special Committees . . . MINISTERIAL STATEMENTS AND TABLING OF REPORTS MADAM SPEAKER: The Honourable Attorney-General. HON. R. PENNER: I beg leave, Madam Speaker , to file the Annual Report under The Fatality Inquiries Act of all institutional deaths for the year 1986 and the cause thereof.

I have reports from the Court of Queen 's Bench and the Court of Appeal , under the provisions of The Controverted Elections Act, showing that there were no controverts before either one of those courts during the year ending December 31 . 1986. MADAM SPEAKER: The Honourable Minister of Industry, Trade and Technology. HON. V. SCHROEDER: Thank you, Madam Speaker . I'd like to table the Annual Report from the Manitoba , Development Corporation for the year ended March 31, 1986. MADAM SPEAKER: The Honourable Minister of Highways and Transportation. HON. J.

PLOHMAN: Yes, Madam Speaker, I have a ministeri al statement . Today, as Minister of Transportation, I presented the Manitoba Government's position on Bill C-18 and Bill C-19 to the Federal Standing Committee on Transport . These bills contain the Federal Government's sweeping legislation on deregulation in the transportation sector . If enacted, they will have the most far-reaching consequences on transportation services this country has seen since the building of the Trans-Canada Railway.

The Government of Manitoba has for years promoted positive change to the existing legislation to allow the transportation industry to play a more significant role in economic development and to provide captive shippers increased protection in the marketplace. In advocating change, we have not supported deregulation. Regulatory controls are mandatory in the absence of a mature and uniform mix of industry and competition as is the case in Canada . We have major concerns with the legislation as it is presently proposed .

We believ e that the Canadian truck and rail companies will be placed in an unfair position , unable to compete with the large U.S. carriers . This would 407 jeopardize many of Manitoba' s 30,000 job s i n the transportation industry. Because of the deregulated environment imposed upon them, Canadian Railways have already announced their intention to dismantle at least half of Canada 's rail network , and CN plans to lay off 15,000 employees across Canada in the next five years.

If this is allowed to take place , enormous costs will accrue to the provinces and municipalities because of rail line abandonment and through loss of employees and their families . The air industry is also in a process of consolidation resulting in lost jobs . The lack of fairness in the proposed legislation will have long-term implications for small shippers and communities throughout Manitoba who do not have access to a competitive marketplace. This will have grave consequences for regional economic development potential here in Manitoba .

But most seriously of all , because of the undue haste of the Federal Government to impose deregulation on Canadians, we believe safety will be sacrificed .

In our past presentations to the Federal Government and through the Council of Ministers, and again this morning, we have proposed a number of specific measures to guarantee fairness and maintain safety in the transportation sector: We have requested the Federal Government to pursue an agreement on trade in transportation to guarantee a maximum Canadian content in transportation within our borders in order to place Canadian carriers on an equal footing with U.S. carriers and protect Canadian jobs .

We have reiterated our demand for orderly development and implementation of a national safety code with effective enforcement measures . Such a code would regulate hours of work and equipment conditions to prevent a serious deterioration of safety on the nation's highways . We believe the development of this code must be funded by the Federal Government and must be in effect prior to the implementation of deregulatory changes .

We have made strong recommendations to protect the provinces and mun icipalities from the effects of rail line abandonment and to protect the levels of services for small shippers in rural and Northern communities . We believe that with the dramatic change s being proposed, a time for adjustment and evaluation must be provided . This interim period would ensure a flexible approach to the needs of the industry, its employees and our communities.

Our government will continue to work , as we have in the past , with other provinces and the territorial governments to develop to the extent possible common positions on major issues to protect the viability of our transportation industry . It is my privilege today , Madam Spea ker, to tabl e our submission in the Leg islature . I ask for the support of all members in our efforts to convince the Federal Government to adopt a more orderly . rat ional and fair

Thursday, 19 March, 1987 approach to regulatory change in our country. There is simply too much at stake. MADAM SPEAKER: The Honourable Member for Minnedosa . MR. D. BLAKE: Thank you, Madam Speaker . We thank the Minister for his statement today, and note that he'll be tabling his submission that we will be able to study in some depth. Madam Speaker, we too on this side of the House have some concerns about deregulation .

Those of us in rural areas know what rail line abandonment has done to some of the rural constituencies and road abandonment that this government seemed to have undertaken also, at the same time as rail abandonment . We're also well aware of the members opposite's feeling for the CNR. Madam Speaker, as I said, we have some concerns with deregulation, but there are also many savings built into deregulation for the consumer, and those concerns also have to be taken into consideration.

We thank the Minister for his statement , and we 'll be taking a further position on it when we've had time to study his submission and the further implications . MADAM SPEAKER: The Honourable Minister of Culture and Heritage Resources. HON. J. WASYLYCIA-LEIS: Thank you, Madam Speaker. I have the privilege of presenting the Annual Report of Manitoba Culture, Heritage and Recreation for the fiscal year ending March 31, 1986. MADAM SPEAKER: The Honourable Minister of Municipal Affairs. HON. J. BUCKLASCHUK: Thank you, Madam Speaker. I have a ministerial statement .

Madam Speaker, I am unable to make a full statement today with respect to certain matters related to MPIC . Unfortunately, I was committed to meetings ·a1ong with members opposite this morning on the question of assessment until some time this afternoon . I requested a full review and an early report on the question of reinsurance and retrocession transactions by MPIC and the provision for anticipated liabilities . I've not had the opportunity to review carefully the media stories relating to this matter and, once I do so , I shall respond in detail.

We have been completely open at all times about the financial affairs of the corporation . A brief review of the MPIC Annual Report, just tabled a few days ago, sets out in sometimes painful detail the financial affairs of the corporation. I've asked the Government House Leader to seek the earliest possible meeting of the House Standing Committee on Public Utilities and Natural Resources so that the financial report of MPIC and all matters pertaining thereto can be considered by members of this House. And I understand that the committee will be meeting Tuesday morning .

It is my hope that I will have a full statement responding to certain charges made by the former president of MPIC as soon as possible . MADAM SPEAKER: The Honourable Leader of the Opposition . 408 MR. G. FILMON: Thank you, Madam Speaker .

I thank the Minister for making this statement , an acknowledgement partially of the very serious situation in which he finds himself as a result of misleading information that has been given both inside this House and outside this House, not only by him but indeed by the government with respect to a very serious issue of a loss of well over $36 million in reinsurance by the MPIC in going into another high-risk venture, contrary to the principles of operating a public utility at the best advantage of the people , the ratepayers of that utility, but rather getting into a major area of loss, potential risk , as a result of the manner in which he and his colleagues dealt with the Manitoba Public Insurance Corporation .

But the problem that I have with his response is that he is asking for some sort of internal investigation into the matter . Madam Speaker , we are having the person who is responsible for all of the problems, the misinformation, the deceit, being in charge of an investigation .

We have the fox being in charge of the , chicken coop, Madam Speaker , and that will not do. '11 Madam Speaker, the Minister says that there are. ~ some small details that he wants to look into in terms of media reports , but let me just put on the record the concern that we have that will require a very major and full inquiry into this matter which must be commissioned by the Premier in the absence and with the removal of the Minister responsible for the_ Public Insurance Corporation .

A full, thorough and complete investigation cannot be entered into as long as this Minister remains in charge of the Public Insurance Corporation because , among other ttiings, he stands accused, accused by the former president and accused by a former director of the Public Insurance Corporation, of ordering a cover­ up to keep under wraps the massive magnitude of the losses of the Public Insurance Corporation under the reinsurance schemes in which they were involved. Thal cover-up, prior to the last election last March, was apparently ordered by this Minister .

Under those circumstances, we can 't have him in charge of an internal investigation into this affair . His board of directors stand accused of having instructed that all t of the discussions with respect to reinsurance be kept \ ,. out of the minutes of the Public Insurance Corporation's board meetings. That kind of allegation , that kind of information, cannot be subject to an internal investigation under the responsibility of this Minister . As long as he remains in place, we cannot expect to get at the truth of that matter .

Madam Speaker, this Minister has said that he was unaware until October of 1986 of this reinsurance problem. Madam Speaker, we will demonstrate very fully that the reinsurance issue was discussed at the committee meetings in April of 1985 and again in July of 1986, and he claims that he had no knowledge until October of 1986. Further, the Minister states that the Opposition never raised it to his attention until this point in time , that it's our fault for having done it.

Madam Speaker, I again am prepared to prove before you, or any public investigation, that the matter was raised by the Opposition in April of 1985 and again in July of 1986, and this Minister stands accu sed of misleading the House and misleading the public on that matter .

Thursday, 19 March, 1987 SOME HONOURABLE MEMBERS: Oh, oh! MADAM SPEAKER: Order please , order please . May I remind honourable members of our Rule 19.(4) which says, ". . . a spokesman for each of the parties in opposition to the government may make a bri ef comment with respect to the announcement or statement and the comments shall be limited to the facts which it is deemed necessary to be made known to the House and should not be designed to provoke debate at that time ." MR. G.

FILMON: Madam Speaker, you 're absolutely correct, and I will just conclude by stating that an internal investigation under the conduct of this Ministe r, who is the person responsible , who has caused the cover-up, who has caused the problem , and who has made the conflicting and misleading statements , will not suffice. We do not intend to accept from this Minister his assertion that he can fix the whole thing by having a little investigation.

Unless we have a full and complete public inquiry ordered by this Premier, we will not accept it and we will not be in a position - in fact, the integrity of the government is at stake on this issue . MADAM SPEAKER: The Honourable Minister of Co­ op Development with a ministerial statement. HON. J. COWAN: Madam Speaker , I believe I heard, and I could stand corrected, the Leader of the Opposition suggest that the Minister of Municipal Affairs was misleading the House . As you are aware, that is unparliamentary language, and is referenced on page 109 of Beauchesne .

I would ask that the Leader of the Opposition withdraw those statements . SPEAKER'S RULING MADAM SPEAKER: I'll take the Honourable Minister's point of order under advisement. "Misleading" is listed in our rules as both parliamentary and unparliamentary , and certainly one cannot accuse a Minister of deliberat ely or intentionally misleading . That is definitely unparliamentary . I will wait until I see a printout of the Honourable Leader of the Opposition's actual words and report back to the House . Notices of Motion . . . Introduction of Bills .

ORAL QUESTIONS MPIC - reinsurance losses MADAM SPEAKER: The Honourable Member for Pembina. MR. D. ORCHARD: Madam Speaker . my question obviously is for the Minister responsible for the Manitob a Public Insurance Corporation . Madam Speaker , can the Minister inform the House when he was first informed by staff and / or board members of the reinsurance portfolio losses? MADAM SPEAKER: The Honourable Minister responsible for MPIC . 409 HON. J.

BUCKLASCHUK: Madam Speaker , I will take that question as notice and review my notes , but I should indicat e that it was I who raised the question with the former general manager almost within a month of assuming my responsibilities for MPIC , not the other way around . MPIC - reinsurance losses - misinforming the House MR. D.

ORCHARD : Then , Madam Speaker, can I assume from that that the Minister misinformed the House when he said he had no knowledge of the reinsurance portfolio losses until October of last year, when he raised it approximately, assuming from his answer, in October in 1984, some two years ear lier? HON. J. BUCKLASCHUK: Madam Speaker , I think if the member checks Hansard , I at no time had indicated that I was not aware of reinsurance losses. These had been taking place since 1977. What I did say was that I was not aware of the extent of the losses.

These losses did not materialize till later on, and they emanated from treaties that were entered into under the previous administration. MPIC - reinsurance contracts cancelled MR. D. ORCHARD: Madam Speaker, the annual report just tabled this week by the Minister responsible indicates that, in 1984, reinsurance contracts were cancelled and the business was substantially reduced. Can the Minister indicate to the House whether he was informed of this move by any staff member and/or board member of MPIC? HON. J.

BUCKLASCHUK: Yes, Madam Speaker, I certainly was informed that a number or most of the international treaties were cancelled in 1984. However , that doesn 't mean that the losses stopped. Once you are into an agreement, those losses may take 5, 10 or 15 years to materialize, and that is precisely what the " incurred but not reported " provision is there for, to take care of the losses as they are reported to the corporation . MPIC - retirement of President MR. D.

ORCHARD: Madam Speaker, a follow-up question to the Minister on his last answer , did the Minister attempt to leave the wrong impression with the people of Manitoba when he indicated that the former president quietly withdrew, leaving the impression that he did not know of the retirement from reinsurance in 1984? Was that an incorrect impression that he left with the people of Manitoba? HON. J. BUCKLASCHUK: Madam Speaker , I'm having some difficulty understanding where the Member for Pembina has received his information from . MR. D.

ORCHARD: Madam Speaker, the source is his words outside of this House, because he didn't have

Thursday, 19 March, 1987 the integrity and the honour to give those kin ds of answers within the Chamber . MAD AM SPEAKER: Order, order please. Order please. All honourable members in this House are honourable members. Woul d the Honourable Member for Pembina please withdraw those last statements? MR. D. ORCHARD: Absolutely, Mad am Spea ker, and if I may pose one last . . . MADAM SPEAKER: The Honourable Member for Pembina with a question. MR. D. ORCHARD: Thank you, Madam Speaker. MPIC - reinsurance losses MR. D. ORCHARD: Madam Speaker, my question again is to the Ministe r responsible for MPIC.

Did the chairman of the board of MPIC, one Leonard Harapiak, now MLA for Swan River and Min ister of Natural Resources, in his term as chairman of the board of MPIC prior to the last election, ever inform the Minister as to the extent of the reinsurance losses faced by the corporation? HON. J. BUCKLASCHUK: Madam Speaker , I'll have to take that question as notice. I don't recall whethe r the chairman had informed me of the extent of the losses, but I believe that by that time I had been given that figure by the former general manager.

MPIC - reinsurance losses - inquiry MADAM SPEAKER: The Honourable Leader of the Opposition. MR. G. FILMON: Thank you, Madam Speaker, my question is for the Premier. Madam Speaker , the Minister responsible for MPIC has been accused by not only the former president of the Manitoba Pub lic Insurance Corporation but a former director of the board of MPIC of ordering a cover-up of the massive losses due to reinsurance investment of the Manitoba Public Insurance Corporation so th at information could be withheld from public attention until after last March's provincial election .

Will the Premier now order a full and complete investigation to clear the air on this matter to ensure that the integrity, what little of it is left, of this government is no longer in question , but is put on the table for all to see what were the actions of the Minister responsible and what role he had to play in covering up information that should have been made public about massive reinsurance losses at MPIC? MADAM SPEAKER: The Honourable First Minister. HON. H.

PAWLEY: I think it's very, very important indeed that all information be obtained, including the information that gave rise to the signing and the entry of treaties during the period of time of the Lyon administration from whence most of these losses have occurred.

It's for that reason, Madam Speaker, that the Minister has announced a meeting of the Committee on Natural Resources and Public Utiliti es for this Tuesday at 10 o'c lock in the morning so that we can have a full and complete review of all pertinent inform atio n in regard to the question of reinsurance losses involving the Manitoba Public Insurance Corporation from 1977 right on up to 1984 when that kind of bus ines s wa s terminated in Manitoba Public Insurance Corporation. 410 MPIC - reinsurance losses - date Minister informed of MR. G.

FILMON: Madam Speaker, I wonder if the Premier could indicate when he and the Cabinet were first informed of the massive losses due to the reinsurance

section of MPIC. HON. H. PAWLEY: Madam Speaker, I would have to take that question as notice. SOME HONO URABLE MEMBERS: Oh, oh! MPIC - reinsurance losses - inquiry MR. G. FILMON: Madam Speaker, in view of the fact that the Minister responsible has indicated that the Opposition did not raise the issue of reinsurance previously in committee or in the Legislature, and in view of the fact that the Hansard of Thursday the 25th of April, 1985 indicates a question by the Member for Minnedosa in the presence of the Minister responsible, the current Minister responsible, a question posed to the then-president, Mr.

Laufer, by the Member for Minnedosa , saying : "I wonder if the general manager could give us any indication of what the losses were on that portion of the reinsurance . . " That was referring to the 1984 fiscal statement of MPIC . At that time, Mr. Laufer responded: "The losse s were in excess of $4.8 million. In fact, before investment income , they were $5.9 million." He was present for that, and he knew the concern.

My question then to the Premier is: In view of the fact that the Minister has obviously misinformed the public and misled members on this side of the House with respect to the fact that we had raised the issue previously, will he now cause a full and compl ete investigation to look into how we have gotten into this circumstance and what was the role of the Ministe r in this whole affair? HON. H. PAWLEY: Madam Speaker , we know very well how we got into this situation.

It was aggravated immensely , Madam Speaker, during the terms of the Member for Pembina and the Member for Lak eside when they were Ministers responsible for the Manitoba Public Insurance Corporation. So we don't require a public inquiry to find that out. MADAM SPEAKER: The Honourable Member for Pembina on a point of order. MR. D. ORCHARD : Madam Speaker, I wish the First Minister would not continuously attempt to mislead the

Thursday, 19 March, 1987 House. At no time was I Minister responsible for MPIC, and I would like him to get his research straight. With the 140 apple polishers he has , surely he would know who was Minister responsible during the Lyon administration. MADAM SPEAKER: Order please. A dispute over the facts is not a point of order. The Honourable First Minister. HON. H. PAWLEY: Madam Speaker, I regret th at I referred to the Minister then of Transportation being once the Member for Pembina ; he was part of the Treasury Board .

I then restrict my remarks to the Member for Lakeside , who was the Minister responsible for Manitoba Public Insurance Corporation when these treaties that led to these immense losses were first entered into . SOME HONOURABLE MEMBERS: Oh, oh! MADAM SPEAKER: Order please, order please . Order please. The Honourable Leader of the Opposition. MR. G. FILMON: Madam Speaker , just for the edification of the Premier, we are not dealing with a question of . MADAM SPEAKER: Order please, order please . The Honourable Leader of the Opposition with a question. Question period is not a time for debate . MR. G.

FILMON: Madam Speaker, in view of the fact that the Minister responsible has misled the public by suggesting that the matter was never raised in committee - and I have read to him from Hansard that the matter was raised in committee in his presence - will he not cause a full investigation to determine what the role of the Minister was in covering up information on the reinsurance losses from the public? POINT OF ORDER MADAM SPEAKER: The Honourable Government House Leader. HON. J. COWAN: Madam Speaker , "misleading the public" is definitely a citation in Beauchesne .

I refer you to page 109, where it states very clearly that "misleading the public" has been ruled unparliamentary, the " Debates, February 1, 1960 , p. 591." MADAM SPEAKER: The Honourable Opposition House Leader. MR. G. MERCIER: Thank you , Madam Speaker . May I point out to you as well, Madam Speaker, that the word "misleading " also appears on page 112 of Beauchesne , where it is ruled that ". . . it has been parliamentary to use the following expressions ." Surely you would agree, in these circumstances, it is a word that can and should be used. HON. J.

COWAN: On the point of order, very clearly the Leader of the Opposition said that he had misled 411 the public. The citation very clearl y, on page 109, states " misleading the public " is unparliamentary. You will not find a similar phrasing in the area where it is found , those statem ents which are parliamentary. You will only find " mislead ," "m islea ding ," or " misled. " You will find nothing in reference to the public . Therefore , acco rding to Beauchesne, that remark is clearly out of order, and I would ask that the Leader of the Opposition withdraw it .

MADAM SPEAKER: The Honourable Leader of the Opposition. MR. G. FILMON: On the same point of order, Madam Speaker, I find it incredible when the House Leader should attempt to use Beauchesne to prevent me from telling the truth , because I have put on the record the difference between . . . SOME HONOURABLE MEMBERS: Oh, oh! MADAM SPEAKER: Order please, order please . Order please . The Honourable Government House Leader. HON. J.

COWAN: Further to the Leader of the Opposit ion's withdrawal of the statement, "misleading the public ," I would wish him to withdraw the statement where he impugned motives on my part that I was attempting, in any way, to prevent him from asking questions. Very clearly, Beauchesne provides for certain words to be used in this Chamber . He has gone beyond the bounds that are provided for in Beauchesne and, like an honourable gentleman and member of this Chamber that he is, he should withdraw those words.

Certainly, he is imaginative enough to find another way to make his point without having to use unparliamentary language. As well , I would ask him to withdraw the comments he made in respect to my attempting to prevent him from asking questions . That is not the purpose at all. SPEAKER'S RULING MADAM SPEAKER: Order please .

May I remind the Honourable Leader of the Opposition that Beauchesne Citation 319.(3) , where it says ". . . a Member will not be permitted by the Speaker to indulge in any reflections on the House itself as a political institution; or to impute to any Member or Members unworthy motives for their actions in a particular case ." Also, the Honourable Government House Leader is entirely accurate in terms of the term, " misleading the public." It's only cited in Beauchesne under unparliamentary phrases.

May I remind all honourable members that we have rules in this House which are to be strictly adhered to by all honourable members and that they are there to -(Interjection)- Order please, order . One of the rul es is that members do not talk while the Speaker is speaking. The rules are there to facilitate all members being able to express their opinion and to exercise their rights in this House. I would hope that we would all hold that

Thursday, 19 March, 1987 in high regard and fo llow the rules as they are laid out for all of us. The Honourable Leader of the Opposition . MR. G. FILMON: Madam Speaker, I will change my statement to suggesting that those comments that were made by the Minist er have misled the readers of the newspaper in which they appear. Secondly, Madam Speaker, I will , in response to the Government Hous e Leader , sugges t that his actions had the effect of preventing me from getting at the truth in this Legi slat ure . That may not have been his intention, but that was the effect of his actions.

MADAM SPEAKER : The Honourabl e Government House Leader . HON. J. COWAN : Firstly, Madam Speaker , let me be very clear. That was neither the intent nor the effect. If the Lea der of the Opposition is so unimaginat ive and so inarticulate that he cannot rephrase a question so as to solicit the inform at ion which he re quir es, then that is not my problem.

My duty in thi s regard is to make certain that this House abides by the rules as laid out in Beauchesne and the other parliamentary authorities, and the Rules, Order and Forms of Proceedings of the Legislative Assembly of Manitoba , and that is what I am attempting to do. Hav ing only attempted to do that and nothing more, I do not accept the apology as stated . MADAM SPEAKER: The Honourabl e Leader of the Opposition. MR. G. FILMON: On a question, Madam Speaker? MADAM SPEAKER: No, on the point of order.

Would the honourable member please withdraw unequivoc ably any imputation to the Honourable Government House Leader 's actions? The Honourable Leader of the Opposition . MR. G. FILMON: Madam Speaker, I will simply say that I accept the statement that he did not intend to prevent me from getting at the truth. May I ask another question? A MEMBER: He didn 't insult you . MR. G. FILMON: I didn't insult him , e ither . A MEMBER: Yes, you did . MADAM SPEAKER: Order please, ord er please .

The Honourable Le ader of the Opposition ha s indicated to my satisfaction that he has not impugn ed the motives of the Government Hous e Leader and , in essence, withdrawn those remarks. The Honourabl e Leader of the Opposition with a question . MR. G.

FILMON : Madam Speaker, my further question to the Premier is , given that there is an allegation, both by a former member of the board of directors and the former pre sident . that the board was instruct ed to 412 remo ve from the minutes of the board meetings any reference to reinsurance discussions in the board meeting , will he not order a full and complete investigation into this very serious charge to ensure that the truth be known about whether or not there was a cover-up on the reinsur ance losses for the past two years? MADAM SPEAKER : The Honourable First Minister. HON. H.

PAWLEY: Madam Speaker, that would be one of a number of areas that the standing committ ee, I'm sure, would be most int erested in pursuing at the meeting which is being called for next Tuesday morning at ten o'clock to deal wi th all matters , includ ing those referenced by the Leader of the Opposition , as well as the history of the reinsurance involvement from 1976- 77 right up to 1984. MR. G. FILMON: Madam Speaker, one more time I ask the Premier about a very serious matter.

Given that the Minister has been accused by the former president and indeed a former director of ordering a cover-up on reinsurance losses; given that the board has been accused of asking that the minutes not reflect the discussions of the reinsurance aspect of the corporation's losses; given that the Mini ster has said that this matter was never discussed before co mmittee or brought to the attent ion of the committee by the Opposition - I have proven otherwise today - and given that the Minister has further said that he was not aware until this past October 1986 of the magnititude of the reinsurance los ses. yet information would indicate that he had much prior knowledge. will he not now do the hon ou rable thing, take the Minister out of his responsibility for this portfolio and ensure that a full , thorough and co mplete investigati on of all of the allegation s, of all of the responsibilities for the cover-up, for the misinformati on and the mi sleading information that has been put forward is now cleared. the air is cleared, so that the public know s whet her or not indeed thi s Minister has take n his responsibilities and whether indeed he can be reli ed upon in future to run any aspect of this government's operation?

MADAM SPEAKER: The Honourable First Minist er. HON. H. PAWLEY: Madam Speaker, this Chamber ought not to react to innuendo or trial by way of newspaper headline . What is most important, Madam Speaker . is that we do obtain all the inform ation and it is for that reason that there will be a meeting as announced by the Mini ster on Tuesda y morning at ten o'clock of the Public Utilities and Natural Resources Committee.

All these quest ions can be posed at that tim e at that meeting so we can get to the bottom of all the information that is required in order that members ca n obtain a full and co mpl ete assess ment and not one that is influ enced by way of innu endo and allegation s that may or m ay not be tru e. MATTER OF PRIVILEGE MADAM SPEAKER: The Honourabl e Leader of the Opposition .

Thursday, 19 March, 1987 MR. G. FILMON: Madam Speak er, I rise on a matter of privilege. Madam Speaker , we have been discussing for some 35 minutes a matter that I believe is of great import to the people of this province and indeed to the integrity of this Legislature. I believe that I have sufficiently demonstrated, as has my colleague for Pembina, that the Minis ter respo nsible for MPIC has provided conflicting information and indeed misinformation with respect to many of the aspects of the discussion of reinsurance losses of MPIC.

There is reason to believe that he personally or others within the government have been responsible for a massive cover-up. There is reason to belie ve that they have instructed that the Board of Directors exorcise from the minutes any reference to discussions on reinsurance and indeed the massive losses with respect to reinsurance that were incurred over the past couple of years. There is reason to believe, Madam Speaker , that this Minister had a great deal of information that should have been made public a long time before this.

Under those circumstances, Madam Spea ker, I believe that an internal investigation under the supervision of this Minister will not arrive at the information that must be made public. It will indeed enhance the opportunity for cover-up, enhance the opportunity for the public never to know the truth about this matter, and I don't believe that this government ought to be satisfied, nor should anybody in the public, with this kind of suggested review of the matter that the Minister is about to undertake.

I also believe that just as in accordance with MTX where the Public Utiliti es Committee hearings were not an adequate veh icle necessa rily to get to it and ultimately the government had to appoint Coopers and Lybrand, an external audit firm, management consulting firm, to do the complete analysis and even then we didn't get at all of the information that should have been made public; because the Public Ut ilties Comm ittee is only limited in the manner in which it can examine the issue. I believe that there is much more that must be done.

So, Madam Speaker, I move, seconded by the Member for Pembina, that the Commi ttee on Privileges and Elections be called forthwith to investigate and report to the Legislative Assembly on whether the Minister responsible for MPIC has misled the Legislative Assembly. MADAM SPEAKER: The Honourable Government House Leader . HON. J. COWAN: Yes, Madam Speak er. As you are aware, members sometimes raised so­ called quest ions of privilege on matters which should be dealt with in other ways in this Ho use. I believe this is a classic example of one of those occasions.

You are also aware, Madam Speaker, the question of privilege ought rarely to come before the Ho use. It should be dealt with when it does come before the House with a motion with the power to impose a reparation or apply a remedy. In this particular instance, Madam Speaker , we have this entire matter of privilege predic ated upon the Leader of the Opposition's belief that he has and his 413 col leagues have sufficiently demonstrated that the information given by the Min ister responsible for MPIC has been conflicting and misleading.

I would suggest if in fact they believe that, they have not listened very carefully to the proce edings of the House this afternoon. It has been very clearly stated that the Min ister responsible for MPIC, first in his statement and then in answers to questions, will be prepared to discuss this matter fully before the Standing Committee on Public Utiliti es and Natural Resources - a time for that committee of Tu esday morning. I must add that we haven't decided as to exactly whether we'll start at 10:00 or 9:30 in the morning yet.

That is a matter for further discussion between the Opposition House Leader and myself. But, on Tu esday morning, that committee will be meeting to discuss this particular item. The Minis ter, in his statement earlie r, indicated that he has always been open in providing information to mem bers of this House and open in provi ding information to members of the public on this particular matter, and it is the Standing Commit tee on Public Utilities and Natural Resources that will continue that process of open and full provision of information and discussion of the issues.

For that reason, Madam Speaker, I believe the motion on the matter of privilege is out of order and should not be accepted. There are certainly other mechanisms already put in place for discussion of this particular item. There has been no demonstration that there has been either conflicting or misleading information. There is the other opportunity for the discussions. As a matter of fact, if anything, Madam Speaker . SOME HONOURABLE MEMBERS: Oh, oh! MADAM SPEAKER: Order please. HON. J.

COWAN: . . . if anything, there may be a matter of privilege in respect to libels upon members and aspersions upon them in relation to Parliament and interference of any kind with official duties or breaches of privi leges of the members. What we've seen from members opposite, while not li bel upon the member, certainly is an aspersion upon the Mini ster re sponsib le for MPIC based on the shallowest of arguments arising from a newspaper article.

If they are so concerned about the allegations in that newspaper article, if they are so concerned about suggestions that others have made, let them attend the Standing Comm ittee on Public Utilities and Natural Resources where we can continue the tradition of full and open debate and discussion on important issues such as this. So, I would suggest, Madam Speaker, that in no way do they have a matter which fulfills the conditions of parliamentary privilege in this instance.

MADAM SPEAKER: As a matter of privilege is a very serious motion before the House, I will take this under advisement to see whether there is sufficient evidence of an alleged breach of privilege that's been presented to warrant giving the matter precedence over all other busine ss of the House.

Thursday, 19 March, 1987 MPIC - Laufer to appear before PUNR Committee MADAM SPEAKER: The Honourable Member for St. Norbert. MR. G. MERCIER: Thank you , Mad am Speaker. A question to the Government House Lead er. In view of his statements, Madam Speak er, that th e committee will be allowed the opportunit y for a full debate and discussion of this matter on Tuesd ay morning . Would he agree that, if Mr. Laufer is prep are d to give testimony before the committee, he will be allowed to do so? MADAM SPEAKER: The Honourable Governm ent House Leader. HON . J. COWAN: Madam Speaker, as the Member for St.

Norbert is aware , it is up to the committee in many instances to determine its procedures and the methods of operation. SOME HONOURABLE MEMBERS: Oh, oh! MADAM SPEAKER: Order please. HON. J. COWAN: I believe that would be a matter that would be more rightfully put before the comm ittee when it begins its deliberations and its meetings on Tuesday .

At that time, discussions can be undertaken to determine whether or not the committee wishes to proceed in that manner or any other manner which the committee may determine is appropriate within its mandate and within the rules of this Hou se and the operations of the committee. So let there be no suggestion that we 're trying in any way to preve nt any action from taking place or that we're trying ... - (lnterjection)- MADAM SPEAKER: Order please. The Honourable Government House Leader. HON. J. COWAN: . . . because that is simply not the case .

We have very well established, and I believe productive and positive ways, to resolve questions as to how a committee should operate. The Opposition House Leader may full well, or any member of his caucus who is a member of that committee may full well want to bring that quest ion to the attention of the committee on Tuesday when it meets. I am certain they will be given a full and open discussion at that particular tim e. MADAM SPEAKER: The Honourable Member for St . Norbert with a supplementary. MR. G.

MERCIER: Madam Speaker , the Government House Leader would have us believe that the majority of members on the committee are government members , and tha t they are somehow going to decide this issue , independently of what the Premier and the House Leader and the members of caucus decides , Madam Speaker . MADAM SPEAKER: Doe s the honourable member MPIC - Minister member of committee MR . G.

MERCIER : The seco nd question to th e Govern ment Hou se Leader : Will the Mini ster of Natural Resources , who was a form er Chairman of the Board of MPIC leading into the elect ion in 1986 , be a member of the committ ee or available to answer questions on his role in th is matter on Tuesday morning? HON. J. COWAN: Mad am Speaker, tod ay they have thrown Beauchesne and the Rules Book both out the window . They know full well that there is a Minist er resp onsible for the portfolio . The Minister is the Minist er responsible for MPIC.

That is to whom que stions in th is House and questions in th e committee are addressed. Any member of the committee , or in fact any member of this Hou se, has the right to attend committee meetings and has the right to par tici pat e in th e deb ate and the discussion at com mitt ee. So to ask wheth er or not a particular membe r will be a memb er of the committee and whethe r or not a

part icular member will speak at a particul ar committ ee is out of order and frivolous at this particular stage. SOME HONOURABLE MEMBERS: Oh , oh! HON. J. COWAN: Methinks the Member for Pembi na protests too much. Ask Mr. Miller . He knows full well from whence these losses originated. He knows full well the responsibility of his government , of which he was a m em ber of the Treasury Bench in this regard. MADAM SPEAKER: Order, order please. Answers to questions should not provoke debate. MPIC - discussed in ERIC committee MADAM SPEAKER: The Honourable Member for St. Norbert with a final supplementary. MR. G.

MERCIER: Madam Speak er, thank you. The image that the Government Ho use Leader attempted to establish of full, open discussion on Tuesday morning seem s to be dimming considerably, Madam Speaker . I have a supplementa ry question for the Premier : Could the Premier inform the House whether the ERIC committee, composed of members like the Government Hou se Leader and others, discussed during 1985 this question of insurance losses when Mr. Silver was appointed to the Board of MTS , to bring back that typ e of information to the ERIC committee?

Was this whol e area discussed by the ERIC committee of Cabinet during 1985? MADAM SPEAKER: Order please . The internal proceedings of a committee of Cabinet are privileged information. The Honourable Member for St. Norbert. MR. G. MERCIER: Madam Speaker, giv en the Government House Leader's suggest ion that there will be full , open discussion and debate of this matter , and the question you raise is a matter - if the Premier wishes to raise a question of privileged communications , he can , but I invite him to answer the question. have a question? MADAM SPEAKER: Order please . 414

Thursday, 19 March, 1987 We have certain rules that I'm impelled to follow, and one of them is seeking information about matters which are in their nature secret, such as decisions or proceedings of Cabinet. And advice given to the Crown by law officers, etc., and Cabinet committees fall into that category . Native children - private adoption MADAM SPEAKER: The Hon ourable Minis ter of Community Services. HON. M. SMITH: Madam Speak er, yesterday I took as notice a question on the number of Native childr en adopted in non-Native homes.

Between 19 82 and 19 84 of 243 Native childr en, 131 were placed in non-Na tive homes. In 19 85, of 29 placements, 10 were in non­ Native homes. In 19 86, of 53 placements, 30 were in non-Native homes. Madam Speaker , because of the court case, I could not speak freely yesterday about the specific case. I now would like to say that we are not at all satisfied with way the case was handled by Awasis Agen cy. The directorate has informed the agency they will be doing a very detailed review and make specific recommendations that we do expect the agency to comply with.

I would like to just draw to everyone's attention that it's really unwise to generalize in these particular cases. In this particular one, we were dealing with a case stemming from over a decade ago, when it was the practice of medical services to take Native childr en, place them in white homes with no legal approval and no permission by the family. We're dealing with the injustice and the fall-out of that.

I do think that we want to work together cooperatively to assist the Native agencies in over coming these decades of trouble, but I do think it's wrong to generalize on the basis of this one case and apply it to all Native placements and Native adoptions. Native children - post-adoption services MR. G. MERCIER: Madam Speak er, arising out of that answer I have a question for the Mi nister of Community Services.

Can she confirm or inform the House that under her department there are no post-adoption services, no services whatsoever provided by her department in post-adoption circumstances where Native children return to Native homes? In fact, people who have asked for funding have been referred to outside organizations for funding. HON. M. SMITH: Madam Speaker, the question of post­ adoption services is one that has not been addressed in the past. The agencies are building up their preventive supportive services to families. Families who have adopted Native children can access those particular services.

There is an organization, a new organization which has approached the government for support and, in line with our general approach to deliv er our services through the agencies and not by funding a multiplicity of separate agencies, we have asked them to go and approach these specific agencies with their request. 415 Min. of Community Services - withdrawal of accusations MR. G.

MERCIER: Given, Madam Speak er, that I was concerned yesterday in this House over a 13- year-old girl who had been raped, suffering from venereal disease, threatening suicide, and given that I've raised a number of these instances in the past out of a concern for the chil dren, would the Minis ter withd raw her allegations she made outside of this Chamber that my remarks were racist? HON. M.

SMITH: Madam Speak er, I wish I could withdraw those allegations, but I do recall the member alleging that it was a nonsensical moratorium that we put on the removal of children from the province, from Native families, that was in place prior to 19 83. Madam Speaker, over 900 childr en were sent out of province and out of count ry, often with very little process, very little respect, for the rights or the fe elings of the Native families.

The people who did that did it with the best of intentions, but I think it's time that we all recognize - I think the allegation that Native families are somehow incapable of caring for their childr en or that our guidelines -(I nterjection)- Madam Speaker, if the member opposite would clarify his comments and say he was refer ring to a specific case, but I did not hear his comment that way. I heard his comment as smearing the whole practice of trying to respect Native families and Native agencies in their legitimate concern and rights to be considered when it comes to the placement and care of their children.

MADAM SPEAKER: Does the Honourable Member for St. Norbert have a point of order? MATTER OF PRIVILEGE MR. G. MERCIER: No, Madam Speaker, I rise on a point of privilege, with a motion to foll ow. Madam Speaker , the Min ister has, in her answer, refused to withdraw her accusation or description of my questions during question period yesterday as being, "smacking of racist," and desc ribing them as, "it's almost a racist assumption," and the questions go on.

In support of that, Madam Speaker, having read some matters in Beauchesne, I will table the newspaper of today's Winnip eg Free Press, which contains the allegations she has referred to inside the Chamber. Madam Speak er, for a number of years I've raised in this House questions of child abuse. They resulted in a study by this government last summer, and I reject totally and compl etely their accusa tion. I move, seconded by the Member for Sturgeon Creek, that this Ho use request the Min ister of Community Services to withdraw totally her description of the remarks of the Member for St.

Norbert yesterday during question period. HON. M. SMITH: Madam Speaker, I do not recall saying that comment in the House. I do recall acquiring that impression. I did say in the hallway that it seemed to me a blanket rejection of the moratorium on the deportation of Native childr en to me sounded racist. Madam Speak er, I do withdr aw, if that is the impression received by the member opposite, but it

Thursday, 19 March , 1987 was the

interpretation that I honestly heard from his commen ts . I am very happy that is not his intent becau se I think the type of problem we're dealing with , with Native children , is going to take the wisdom, the support. the understanding and the hard work of all of us. Madam Speaker. MADAM SPEAKER: Order, order please. Orde r please.

This matter has been raised at the ear lie st opportunity , and I will take it under advisement to see whether there's sufficient evidence of the alleged breac h of privilege of the House that has been presented to warrant giving the matter precedence over all other business before the House. The Honourable Minister on a point of order. HON. M. SMITH: Madam Speaker , I never did use the word in the Hous e. I think if you consult Hans ard, you will find that factual. MADAM SPEAKER: I will review Hansard . HON. M. SMITH : And the intent was misund erstood.

Perhaps I misunderstood the comments he made , but I wish you would also consult Hansard in that regard . I am happy though to hear that the intent is not racis t and that we share a concern to build better services for children .- (Interjection)- I can't withdraw what I didn 't say. I do withdraw the understanding of it, that that was what was said in the House . I didn't say it in the House. Madam Speaker , I withdraw the allegation. MADAM SPEAKER : Order please .

I recognized the Honourable Minister to respond to exercise her rights under our rules on a privilege, a motion , and I still will take the matter under advisement. The motion is still before the House , and I will report back . Budget - border-town merchants re sales tax MADAM SPEAKER: The Honourable Member for Roblin-Russell. MR. L. DERKACH: Thank you , Madam Speaker. My question is to the Minister of Finance . Manitoba merchants in t owns bordering Saskatchewan have in many instances been delivered a final blow in their economic survival by the Budget that was delivered here Monday night.

Merchants from these bordertowns approached the Minister of Financ e about a year ago in an attempt, in a plea, to have the Minister consider to remove the retail sales tax on goods, on clothing especially , so that they might be more competitive with towns just across the border in Saskatchewan . In addition, Madam Speaker, the Minis ter received calls from my colleagues who represent bordertowns, the Member for Virden, and myself . In addition, he also received letters asking him to seriously consider removing the sales tax on clothing up to a maximum of $300 .00 .

Madam Speaker, on Monday night, the Minister has caused a further blow by the increase in the sales ta x 416 to 7 percent. My question to the Mini ster is this: Why has he, as Minister of Finance, aba ndon ed the plea, the cause of border-town merchant s, by int rod ucing a further sales tax when he in fact state d in th e Budget on Monday night that , in preparing his Budget , he had listened and heard the plea s of Manitobans? MADAM SPEAKER: Th e Honourable Mini ster of Finance . HON. E. KOSTYRA: Thank you, Madam Speaker .

As the member is aware , I have met and have consulted on a number of occasions with representatives of businesses and communities along t he Manitoba-Saskatchewan border. In f act, I've discussed this particular issue with some membe rs opposite who raised their concerns with me. As the member is aware , I also provided him recently with statistical information showing what has happened with respect to sales tax revenue of clothi ng merchants along the Manitoba-Saskatchewan border , along with comparisons of other rural merchants at distances con siderably away from the border.

As the member is aware , tho se statistics show that there is not any significant difference between the retail sa les tax revenues from those merchants wh o are in rural areas far removed from the Manitoba-Saskatchewan border , as against those who are immedi ately close to the border. In regard to the additional increase in taxation , it will tak e effect. We obviously monitor any impacts that may have, and I'll obviously look at what the situation may be with respec t to the changes that might come about in sales tax revenue in the other province along that border . MR. L.

DERKACH: The Minister indicates that he has provided information to us with reg ard to the study . I, as the Member for Roblin-Ru ssell, which borders th e Saskatchewan borde r, have not received that , and I'm wondering wheth er or not the Mini ste r is prepa red to table that information for us. HON. E. KOSTYRA: I'm surpris ed that the member didn 't receive it, because I did sign copies to all of the MLA 's along the border. If they haven 't received it , I'll have to check in my office to see why it hasn 't gone out, but I know I signed it at the end of last week or the beginning of this week .

I'll make sure that they 're over to his office this afternoon. Deeter Report recommendation re sales tax MR. L. DERKACH: A further questi on to the Minister of Finance . One of th e recommendation s of the Deeter Rep ort , Madam Speaker , indicated that removal of sales tax up to a maximum of $300 would be one avenue th at this government could look at to help merch ants in th e borde r towns .

I'm wondering whether the Mini ster will in fact make a commitment to consider removing the sales tax of up to $300 for Manitobans to assist tho se merchants along bordertowns so they can be mor e competitive with tho se merchants in Saskat chewan .

Thursday, 19 March, 1987 HON. E. KOSTYRA: We certainly are going to monitor the situation with respect to those border communities, and will obviously review the sales tax as we go along. I would just point out to members opposite that the government that removed the tax just prior to an election, and then subsequently suffered a significant deterioration in their deficit to the point of $1 .2 billion, I don't intend to put our province into that kind of fiscally irrespo nsible position. MADAM SPEAKER: The Honourable Mem ber for Robli n-Russell with a final supplementary. MR. L.

DERKACH: Thank you, Madam Speaker . The Minis ter has already indicated to the House that the study has been done and he has done the consideration. How much longer is he going to study this matter when merchants in these bordertowns are facing bankruptcy in many cases? HON. E. KOSTYRA: Unfortunately that information did not get to the mem ber and I think that, if he reviews it, he will see that at the present time the situation is similar in those commu nit ies as agains t other communities that are far removed from the bord er.

Unless there is any further deterioration it appears that there is no need to take any specific action. MPIC -internal audits MADAM SPEAKER: The Honourable Member for River Heights. MRS. S. CAR STAIRS: Thank you, and my question, Madam Speaker, is to the Minis ter responsible for MPIC.

Gi ven the fact that this Minis ter has been charged with the Manitoba Public In surance Corporation for some years; and given the fact that he is responsible for its activities; and given the fact that he should know or ought to have known of the operations of the MPIC; can the Min ister very specifically tell the House what internal audits were performed on MP IC's general lines when he first assumed the portfolio and, in turn, what reports were and are made available to him on a regular basis? MADAM SPEAKER: The Ho nourable Mini ster responsible for MPI C. HON. J. BUCKLASCHUK: Thank you, Madam Speaker.

The Memb er for River Heights has requested some fairly specific information. I believe that information will be available at the committee hearings which are to start next Tu esday. MRS. S. CARSTAIRS: I look forward to it Tu esday. Wo uld the Minis ter responsible for MP IC explain what steps he took and what advice he follo wed after receiv ing reports from the internal audits of MP IC? HON. J. BUCKLASCHUK: As the Mi nister responsible for MP IC for the past four-and-a-half years, I was not in receipt of internal audit reports.

Those would go to the Chairman of the Board and I would be provided with reports from the auditing firm that audits the 417 corporation and with the report from the provincial auditors. MRS. S. CARS TAIRS: A final suppleme ntary, Madam Sp eaker , to the same Minis ter , can the Mi nister responsible for MP IC advise the House as to whether or not he ever chose not to follow the recommendations of the General Manager or the President of MPIC or any auditor working for or represe nting the interests of MPIC? HON. J. BUCKLASCHUK: The Memb er for River Heights is taxing my memory to the limit.

Over four­ and-a-half years, I am certain there would be many occasions when a numb er of options were being presented and ther e may well have been recommendations that I did not accept. High School Review - policy statement MADAM SPEAKER: The Honourable Member for Fort Garry. MR. C. BIRT: Thank you, Madam Speaker, my question is to the Mini ster of Education. He appointed a High School Review Committee, and it is preparing a policy statement for release. I am asking the Min ister: Will he be filing that position in the House before it is made public? MADAM SPEAKER: The Honour able Minis ter of Education. HON.

J. STORIE: Yes, Madam Speaker . MR. C. BIRT: Madam Speak er, will he be filing that statement in the House before he announc es it publicly himself at the Manitoba Association for School Trustees' meeting tomorrow? HON. J. STORIE: Yes, Madam Speaker . Budget - 2 percent tax loss MADAM SPEAKER: The Honourable Memb er for Riel. MR. G. DUCHARME: Thank you, Madam Speaker, my que stion is for the Min ister of Finance. During the recent Budget of March 16, a taxpayer who has a le gitima te loss du e to un fortunate ci rcumstances is eligible to carry that loss from one tax year to another .

Will this indiv idual now pay the 2 percent net tax before deducting this loss, before this legitimate loss? MADAM SPEAKER: The Honourable Minis ter of Finance. HON. E. KOSTYRA: Thank you, Madam Speaker . I'm sorry I didn't hear the first part of the question. SOME HONOURABLE MEMBERS: Oh, oh! HON. E. KOSTYRA: Could he please repeat his question?

Thursday, 19 March, 1987 MR. G. DUCHARME: To the Minister, what I'm comparing is a legitimate loss from one tax year to the other . Now they deduct that. Does that 2 percent apply before he deducts the loss or after? HON. E. KOSTYRA: I'll take the question as notice to provide the member with a full answer so that he will have the correct information. MR. G. DUCHARME: A further supplementary question to the Minister . Will the 2 percent loss, how will it affect Line 246 in regard to the deduction for blind persons or persons confined to a bed or wheelchair? In other words, when will they pay?

Will they pay the 2 percent or will they be able to deduc t that also? HON. E. KOSTYRA: I'll take that question as notice, but just point out that the person would have to have an income level obviously that would put them in the position of paying that and not having the off-setting reduction for the 5 percent of exemptions that is allowed and the Cost-of-Living Tax Credit. But in terms of the specific area, I will take that as notice and provide the answer so that I don't make any mistakes like the Leader of the Opposition did in terms of what comes before or after a particular line. MR. G.

DUCHARME: A further question in regard to the deductions . Will pension income deductions be also handled the same way, or will they be handled the same way as they were handled in '86 and '87? HON. E. KOSTYRA: I'll take that question as notice also , Madam Speaker . MR. G. DUCHARME: A final supplementary. What about overpayments of unemployment insurance? Will they also be handled the same way? Will they have to pay the 2 percent on that? HON. E. KOSTYRA: Thank you, Madam Speaker.

I'll take that question as notice to ensure that he does get the proper information, unlike the information that was given to the Winnipeg Sun yesterday by U and R Tax Services . MADAM SPEAKER: The time for Oral Questions has expired. ORDERS OF THE DAY BUDGET DEBATE MADAM SPEAKER: On the proposed motion of the Honourable Minister of Finance and the proposed amendment thereto, standing in the name of the Honourable Member for River Heights. MRS. S. CARSTAIRS: Thank you, Madam Speaker . The Budget is fair, is it not?

The Minister of Finance told us 17 times on Monday night that the Budget was fair and I lost count after so many pages. If you hear it often enough, Madam Speaker, is it not so? No, 418 Madam Speaker , no, no, no, it isn't so. This Budget is not fair, Madam Speaker , and saying so 17 times doesn't make it so. In order to be fair this Budget would have to be free of favoritism, free of bias.

It would have to be impartial , Madam Speaker; it would have to be just ; it would have to be equitable; it would have to be consistent with the ru les of logic; it would have to be ethical, and most of all, it would have to be honest. Fairness, Madam Speaker , means that it is fair to all people, all citizens, the poor, the middle class and, yes, those whose incomes are above the medium and from whom we expect the largest contributions. If choices must be made, yes, the poor must _be favoured , but who in Manitoba , Madam Speaker , are the poor?

According to this Budget , you would have to be very poor indeed in order to get relief. All members would agree that those earning less than $15,000 per year are poor and deserve our support and all that we can provide them with but, Madam Speaker, the poverty level in the City of Winnipeg for 1986 was $21,663 for a family of four. As a result of this Budget, everyone earning over $15 ,000 a year will pay more tax . Indeed, the hardest hit by this Budget will be those between $15,000 and $60,000 a year. (Mr. Deputy Speaker, C.

Santos, in the Chair.) We have a situation within our economy in which we have wage settlements this year between 4 percent and 5 percent. This government asked the teachers to take zero percent, and yet this same government would ask the taxpayers of this province to pay an increase of 22 percent in their provincial income taxes. Does this government not care about its responsibility to economic management? Does it not care about economic growth? In its headlong rush to patch up the present, doesn 't it care about economic logic or economic reality? Mr.

Deputy Speaker , I cannot believe that this government does care much about economic reality , and I'm convinced that the majority of Manitobans agree that this Budget is monumental economic folly. People are dismayed ; they are discouraged and they are astounded at a government lumbering along like a dinosaur, unable to change its way. Manitobans are amazed at the deficit pile-up and not a paragraph, not a sentence, not a word, no effort at all to tackle the expenditures of this government.

Manitobans are numbed by the endless inability of this government to deal honestly with what we can afford and how best we can deliver those necessary social services. Manitoba and Canada, Mr. Deputy Speaker, are experiencing an economic recovery , a recovery which by any standard of measurement is very long in the tooth. Since 1983, the Manitoba economy has performed well, often better than the Canadian average, and this government takes pride in that, but spending has spiralled in spite of tax increases. Debts and deficits have mounted and changes to our service debt have soared.

Still, we are told that our economy is strong. To poke a little fun at my own party, we actually had the gall to go to this electorate in 1979 and talk about the land being strong - 1979 - and the electorate told us what they thought of that particular statement -

Thursday, 19 March, 1987 what happened when the economy falters, as it surely will, because there are cycles, and Ma nitoba feels those cycles. Will this Government of Manitoba have any resources to respond to the unem ployed then, or to the hardship of vulnerable sectors like agriculture and small business? And the answer is no, they will not. I have heard NDP members espouse Keynesian economics, prime the pump when the economy goes flat.

Wel l, Lord Keynes would have a difficult time in his grave today reading this Budget, because this government has spent widely throughout what they refer to as ec onomic expansi on. This government is foreclosing its options, Mr. Deputy Speak er, to be compassionate in the future when the need will be the greatest. This Budget shows that this government is both economically and intellectually bankrupt. The Finance Min ister speaks of fairness, but fairness need not just apply to government programs; it must also apply to government expenditures, and there was no fairness here.

In today's economy , the catch phrase is "lean and mean." Even our Premier has sought to adopt the phrase. We saw lots of meanness in the Budget on Monday night, but we certainly didn't see any leanness. The government forgot about half of the equation. Let's take a look at some of the administrative costs of this government as a result of this Budget. They have incr eased their administrative costs - that is staff salaries and their sundry costs for Min isters by $2.6 million.

The Min ister of Cultur e, Her itage and Recre ation, whose overall budget went down by 3.4 percent, incr eased her administration by 19.4 percent. The Mi ni ster of Cooperative Development sees a decrease in his bud get of 56 percent, but his administrative costs went up by 10.6 percent. The Mini ster of Finance tells us he needs another $1 00,000 for salaries. The Premier says he needs another $1 02,000 for salaries, incr eases of 36 percent and 7.4 percent. Some departments did cut, Mr. Deputy Spea ker, four of them.

Education cut $3 1,000 from its administrative costs, and the Attorney-General was ab le to cut $1 10,000, so it was actually possible for government de partments to cut costs, but 21 go vernment departments chose to incr ease their expenditures for administration. Indeed, one of the funniest lines in the Estimate book is found on page 76. The Tr easury Board has been given a whopping 54.5 percent to fulfil!, quote, "its expenditure management responsibilities." God help this province, Mr. Deputy Speaker , if 54.5 percent is an example of management re sponsibili ty.

It is the government that takes "mean" from the taxpayer and expects the taxpayer to live with "lean." Where was the fairness in setting priorities in this Budget? The Mi nister of Finance takes great pride in the incr ease of funding to agriculture. This so very important industry to Manitoba is now going to get a whopping 2 percent of the entire go vernment expenditures in Manitoba. That's $83 for every citiz en in Manitoba. What was the answer of the Minis ter of Finance? We'll give them a $500 tax deduction, a maximum $500 tax deduction on their education tax. Mr.

Deputy Speaker , that amounts to 25 cents to 70 cents an acre. Not much seeding is going to take place with that kind of mone y, but meanwhile the Min ister 419 of Agriculture takes $4 10,000 to administrate the disastrous Family Farm Protection Act. If he had taken that $410,000 and used it for loan guarantees for farmers, then indeed you might have given the farmers of this province some hope for the future. But where does Agriculture fit in this scheme of things? Well logic ally, we understand that it fits behind Health and it fits behind Education and it fits behind Community Services.

But it also fits behind Energy and Mines and behind Finance and behind Government Services and behind Housing and be hin d Natural Resources. Does the Mini ster not unde rstand that the more bureaucrats you have in the Department of Agriculture doesn't help the farmer? Additional funding paid directly to the farmer and based on need is the only solution. Our smug Finance Min ister prattles on about aid to agriculture and by-passes the outstretched arm of farmers to pat himself on the back. The Min ister of Finance told us that health, education and social services were the priorit ies of this government.

But was that really what happened on Monday night, Mr. Deputy Speaker? No, it wasn't because, if you look at the percentage inc reases, Finance got the largest percentage of that Budget, and then Agriculture got second, and for that I am grateful. But then we hit Employment Services and then Community Services, Health was sixth, and Education was behind the percentage incr ease to the Premier's Office, to the Attorne y-Ge neral's Office, to the Department of Labour. Mr. Deputy Speak er, Education is not a second priority, as this government would like to tell us. It is a tenth priority.

They received slightly more than 1 percent,

whereas services to other sectors, like Health, got 5 percent above inflation. Community Services got 7 percent above inflation. For the first time in the history of this province, the Education budget has gone below 18 percent of provincial expenditu res. This year, it stands at 17.7 percent of provincial expendit ures. Why is this government unwilling to stand up for Education which holds the future of this province in its hands? I cong ratula te the Health Mi ni ster, Mr . Deputy Speak er, for demanding and getting more mone y for home care services, because that is the way in which we must move in the future.

But why were there no further monies towards community-based mental health services? Why did they receive grants below the inflation rate, Mr. Deputy Speaker? Why were $7 million of lottery monies used for General Revenues and Health, and not targeted to a specific project? Health needs massive amounts of transitional monies for in novative programming, leading to improved care with decreasing costs. Why did we not target the lottery monie s for that kind of transitional funding, and why didn't we provide more of the lottery monies for that kind of targeted funding?

The value of targeting for special needs rests in the ability to then move in the future to the funding of other areas which need targeted financing. By just taking monies and putting it into general revenues, those monies get all too readily absorbed in the system and are not used for the very specific projects which are so necessa ry. Mr. Deputy Speak er, the Finance Mini ster speaks glowingly of the incr ease of per capita income of Man itobans, from 90 percent to 94 percent of the Canadian average, while at the same time saying that -

Thursday, 19 March, 1987 this affects our ability to raise money. It certainly does. and is a very good reason why we shouldn't have the highest tax rate in all of Canada. But . Mr. Deputy Speaker , according to Statisti cs Canada , in 1984 Manitobans received 95 .4 percent of the per capita income in Canada. Why have we lost 1.4 percent in the last two years? Coincidentally, this decrease seems to have occurred at about the same time as the payroll tax began to take effect .

How can we brag about low unemployment and good economic times and have a decrease in the percentage which Manitobans make in relationship to other Canadians? Let us look , Mr. Deputy Speaker , at what happened to the middle class as a result of this Budget. The middle class . the backbone of our society, the entrepreneurs , the risk takers , the ones , Mr. Deputy Speaker, who create in this province our jobs , they have been betrayed ; they have been robbed in this Budget. The NDP Government has finally displayed its true colours.

It has abandoned the centre and shown themselves for the true socialists they really are. They would rather bring us all down than raise the less fortunate up, and let's see how they did it insidiously , tax after tax after tax . Take the payroll tax , for example, up to 2.25 percent , and they brag that only 900 corporations are affected. But who are those corporations? Well one of them is the University of Winnipeg that's going to end up paying $180 ,000 more to the government of this province next year as a result of the payroll tax.

Another one of those corporations is the University of Manitoba that will pay . 5 million in payroll tax . Another one of those corporations is the Royal Winnipeg Ballet and the Winnipeg Symphony. Social service agencies will pay this increased payroll tax . The owner of a gas station will now pay $12,000 for his employees; that's one less employee that he could have had, Mr. Deputy Speaker. What of the land transfer tax, another vicious assault on the middle class? We know that the cost of housing is increasing our inflation rate in this province.

In the last two years, housing has gone up by 15 percent, so this is a tax that's going to go up and up and up and up. Who are they trying to hit by it? The individual who made a lot of money from the sale of his house? Well it might come, considering his answers to earlier questions today, as a matter of pure amazement to the Minister of Finance , but it's not the seller that pays it, it's the buyer that pays the tax.

It's that family that has saved and saved and saved to buy their dream home, and who may only have $30,000 equity in their $150,000 home , and who are carrying enormous mortgages in order to sacrifice to live in that home, and they got 100 percent tax increase on Monday night - 100 percent . Meanwhile, apartment owners, they're going to condominiumize . They have the laws to do it . They'll sell them as individual units and they won 't end up paying this vicious tax. The corporation capital tax, you're supposed to tax the value of assets. Doesn 't that sound wonderful?

Tax assets, it sounds terrific, except most of the assets of most of our corporations are encumbered, so what we 're really taxing is debt financing. Be fair. If you're going to tax a corporation, tax them on profit, tax them on what they make, not on their debts . What of the net income tax? I mean , it's quite obvious that the Finance Minister doesn 't und ers tand how it 420 works. But what is included in net income tax? Well it includes the money you earned before deduction s. That means, Mr. Deputy Speaker, that we will pay tax on our child deduction.

We will pay tax on our spo usal deduction, if we should have one. We will pay tax on our charitable contribution . We will pay tax on our medical exemption. We will pay ta x on our los s carryforwards. We will pay tax on our gross ed-up dividend income, not our net dividend income that we should pay tax on, but our gross dividend income . But , Mr. Deputy Speaker, what won 't be taxed? Well, we won 't be taxed on our tax shelters. We won't be taxed on our RRSP's. We won 't be taxed on our interest on borrowings , because they're not included in net income tax.

So, what we have here is tax the kids, but not the RRSP 's . Isn't that wonderful socialist philosophy? Tax the kids but not the RRSP's. I ask you, Mr. Deputy Speaker, is that fair? What does this Budget mean, Mr. Deputy Speaker , to an entrepreneur or risk taker who wants to move to Manitoba and set up a new business here? His employees say, no way, because it will cost them on their personal tax, their home purchase, their tax on retail sales purchases , and the entrepreneur says he can 't afford to come here because he has to pay the payroll tax and the corporation tax. So we lose the new businesses.

We need to create wealth in Manitob a because there is not enough creation of wealth, but we turned our backs on businesses on Monday night instead of trying to achieve a balance. We have discouraged our business community . (Madam Speaker in the Chair.) Madam Speaker, this government has tried over the past four years to be entrepreneurs, and the results were absolutely disastrous . They tried to be entrepreneurs in MTX and they lost $27.4 million , or is it really 40 million they lost in MTX? At MPIC they lost $37 million in the reinsurance industry.

Then the Minister of Finance decided to play the foreign exchange markets and he lost $50 million - $115 million lost by the bureaucrats of this province trying to play entrepreneur. If they hadn 't lost all that money , Madam Speaker, we wouldn't have needed the net income tax or the corporation capital tax or the land transfer tax , or we could have done away with the retail sales tax. Why doesn 't this government, instead of putting its faith in the bureaucratic entrepreneurs, who fail at each and every occasion, why don't they put it in the hands of the business sector of this community?

Why doesn 't it trust the entrepreneurial ski lls of our citizens? Why does it take $286 million from them and deny the risk takers the opportunity to invest in Manitoba? Our entrepreneurs put their neck on the line each time they make an investment in Manitoba. Our bureaucrats don't, and our Mini ste rs don't even put their portfolios on the line when their bureaucrats enter into these entrepreneurial sche mes . Mad am Speaker, I am reminded of the "Pogo" cartoon as I listen to speeches in this House .

Pogo , as we all remember, became very concerned about the conditions of the Okefenokee Swamp, and he decided to have a campaign against the litter ers. He armed the animals with their swords and their spea rs and their shields , and he led them off into the swa mp. As they

Thursday, 19 March, 1987 proceeded, they came across litter from almost every one of the animals and Pogo announced: "I have found the enemy and he is us." Madam Speaker , we are the enemy because it is our debt and our deficit as Manitobans. Su rely, we can have a system of fair taxes and expenditure cuts. Let us establish a sense of priorities which encourages the best and the bright est to come here from other countries and other provinces and, better still, let us keep the entrepreneurs, the risk takers, among us. Let us encourage them to stay here. Madam Spe aker, let us get our own house in order .

We need balance, we need fairness, we need a climate of trust with our business community and with our citiz ens. The Budget turned its back on 80 percent of the population of this province. It asked us to trust the Finance Minis ter, whose projections were 25 percent out last year. It asked us to believe that services needed dou ble the rate of inflation, while at the same time telling us that we had the best services anywhere in this countr y. There is no honesty in this Budget because it pretends that taxes are going down for the majority of Manitobans and this is simply not so.

There is no integrity in this Budget, because that implies soundness and this Budget is not sound. There is no credibility in this Budget because the citizens of this province know they've been taken for a ride. Madam Speak er, I would ask the go vernment to remember this quote by P.T. Barnum, who understood flimflam, and he said: "You can fool some of the people all of the time, and you can fool all of the people some of the time, but you can't fool all of the people all of the time." This NOP Government has tried one and two and go tten away with it.

This Budget is number three and the people of this province are not fooled. MADAM SPEAKER: The Ho nourable Minis ter of Employment Services. HON. L. EVANS: Thank you, Madam Speak er. I would like to participate in this debate and add a few words of comment regarding the very progressive Budget that was brought in by my colleague, the Mini ster of Finance, the other night; and one, a Budget that I think from my 18 years in the Legislature is one of the most progressive budgets we brought in.

One that has compassion, and I'll say it, maybe it's the eighteenth time - I don't know how many times the Member for River Heights made reference to, whatever number it is, we'll say it again, a fair Budget. It's a balanc ed Budget as well; it's a Budget for our times. Because, Madam Spea ker, the fact is that we do have to obtain more funds; we do have to obtain more funds to provide the services that Manitob ans want. We kn ow that Ma ni tobans want qu alit y health services.

We know they want quality educa tion, and we know that they want an array of social services to look after those less priviliged than others. That takes mone y, Madam Speaker, it takes a lot of money. In fact, if you analyze the Budget, if you analyze the spending, you'll see by far the single greatest amount goes to health care, which is around 31 percent, 32 percent of all of our spending.

When you add in education and other social services in related areas of human development, you're looking at two-t hirds of the spending easily going in that area. 421 The fact is, Madam Spea ker, Manitobans want quality care. They want their governments - in fact, well the Mem ber for Brandon West is ref erring to the Brandon General Hospital and some other things. I would advise him that the Brando n General Hospita l has had substantial incr eases in revenue year after year after year, and in deed the waiting lists for the hospital are being reduced. A lot of fine new technology is about to be brought in.

A MEMBER: The Member for Brandon East has done more for Brandon than the Member for Brandon West will ever do in his lifetime. HON. L. EVANS: As a matter of fact, when my friend, the Member for Brandon West - and I'm not faulting him for this. He wasn't in Manitoba - I don't think he was in Manitoba during the Lyon period of office.

I'll tell you, if you want to know about cutbacks, that's the time to be here because, between 19 77 and'81, the massive cutbacks that occurred in social services, the sque ezes that occurred at that time were so great that the people of Manitoba made history, and that is they did not re-elect the Cons ervatives for a second term. I think that is history in the making, because normally governments get re-elected at least for one more term, for two terms in a row. We know, therefore, that people want these. I say, therefore, what does the Opposition propose? What does the Liberal Party propose?

It's easy to stand there and say, this tax is no good, that tax is no good. No government wants to inc rease taxes. Every government would like to reduce taxes. Any party would like to reduce taxes, obviously . The fact is, in order to provide these services in the public sector, we do require the reve nues. The challenge then to government is to, somehow or other , decide on how to levy the tax so that the tax is paid by those who are able to pay the tax. This is what this Budget's all about. We recognize that we have many poor people who should not be asked to pay more.

In fact, this Budget in terms of income taxes, I understand there will be 100,000 people, 100,000 Manitoba income tax filers who will pay less tax as a result of the Budget brought down this week. Indeed, 15, 000 income tax filers will no longer be paying tax. They will be taken off the provincial income tax rolls. As a matter of fact, Madam Speaker, even after the sales tax and the Cost-of-Living Tax Credit are taken into account, 36 percent of the households will pay less personal tax. So we take it all together .

I say that what we've done, therefore, is we've taken an approach that is reasonable and that is fair. I was rather disappointed in the remarks of our colleague from River Heights, who very glibly criticiz ed various kinds of taxes and so on but really had no solutions to offer. That's what I would like to hear from the members opposite. I haven't heard any solution from members opposite that would resolve the degree of deficit that we're looking at. I haven't heard where they're going to cut spending. Oh yes, there are always some miscellaneous items.

They're always talking about commun ications people and so on. Well, you can add up many, many of these items. I listened to the Member

Thursday, 19 March, 1987 for Minnedosa the other day, and I was really disappointed because there was nothing that he proposed that would make any significant differenc e in terms of the deficit. I say therefore that the Conservative Party, the Liberal Party owe it to the voters of Manitoba to stand up clearly , exactly how they would resolv e it. Never mind giving us speeches on one item or another item . What is their comprehensive approach? Who would they tax, or would they simply cut services to get rid of deficits? Is that what they're going to do?

If you're going to cut services, exactly what services are you going to cut? -(Interjection)- Well I would say, Madam Speaker, that if we have a repeat of what occurred when the Conservatives were in office last time, 1977-81, you will see some majo r cuts that people would be very, very upset about. So, I say that it is a very difficult problem , a very difficult challenge, but I think we have met it head-on. It was interesting to see the comment in the paper of various writers .

One person I noted compared what was happening in Manitoba with what occurred and what has occurred in Ottawa over the last few years . Ottawa added 18,000 low-income Manitobans to the tax rolls and, as of yesterday or as of when the Budget came down, we announced that we would take 15,000 poor Manitobans off the tax roll. Under the most recent federal budget, taxes on individuals have risen by 50 percent or $22.7 billion from $43.4 billion to $66 .1 billion,

whereas taxes on corporations have only gone up by $401 million. Manitoba families under the federal budget have experienced an average personal income tax increase of $506 since 1981, if you take the latest one into account. Those with incomes between $10 ,000 and $15,000 have had their taxes go up by $155, and ones in the $15,000-$20,000 range have experienced a hike of $327 .00. However, those earning $150,000 have realized the whopping saving of $4,715.00. The fact is, Madam Speaker, we've got a Federal Government that is taxing the poor, and the rich are benefiting.

We say, Madam Speaker, that is not the way to go. It should be just the reverse, and it's a good Christian principle . In fact, it's a universal principle of the major world relig ions that those who have the ability to pay should be required to pay. Those people who are the poorest among us, the retired people, in this day and age, the farmers, a lot of single parents, a lot of socially disadvantaged people should not be required to shoulder the burden of various taxes. The Budget as well introduced a number of new programs or expanded programs.

So not only have we, on the one hand, ensured that the poorer people will pay no tax in some instances or certainly less tax; on the other hand, we've had various special measures that were badly needed for the farm sector so that we have indicated that we are prepared to use some of this money to help farmers with the School Tax Assistance Program, which could always be more. I know you could always argue there should be more, but it will go a long way to relieving the tax burden on individual farmers. Our estimate is that two-thirds of all individual farmers will no longer have to pay any school taxes.

Four thousand six hundred more farmers over 55 years of age will benef it from the School Tax Assistance 422 Program through the 55-Plus Program . There is an Interest Rate Buy-Down Program that the Minister advised , which will assist in reducing the annual debt servicing charges of clients of Manitoba Agric ultur al Credit Corporation. Indeed , there are many oth er specific new measures that have been brought forward by this government and announced by the Minis ter of Finance that we simply have to pay for, and we have to pay for it with monies from people who have the ability to pay.

The initiatives were taken to help the small business sector . Madam Speaker , in spite of all the protestations of members opposite about our health and education levy, sometimes referred to as the payroll tax, it's rather intere sti ng that Manitob a stands far above most provinces in the rate of job creation. You know, we were told all doom and gloom. Businesses would leave the province, we wouldn't have the job creation and so on. The fact is that we have a better job creation record than the national average.

As a matter of fact , only a few days ago when the latest survey came out, Madam Speaker, when the latest figures came out from Statistics Canada show ing what happened in a year of Febru ary '87 over February '86, the information is that the job creation rate for the past year was 1.6 percent - that is the rate of job creation , the rate of employment growth was 1.6 percent compared to 2.1 percent for Manitoba. In contrast to that, Madam Speaker, in the Province of Alberta , you had an absolute decline of 3 percent in that year.

So let's face it, there are many factors tha t affect the rate of job creation, but things can't be that bad in Manitoba that we could have in the past year a rate of job creation far in excess of the national average. Indeed , we have 10,000 new jobs this February over last February and, of those 10,000 jobs, 8,000 were full-time jobs. So I think that's a job creation record that we can be proud of and a job creation record that , in effect, shows very clearly that the policies of this government are favourable to an expanding economy.

Indeed, there is a lot of evidence that our economy will be even stronger in the years ahead . Other new programs that we brought in to help Manitobans have to be paid for but , nevertheless, we believe that these programs are what people want. Far from cutting health care spending, we are engaged in a massive program of new funding , new kinds of funding , and indeed the Minister announced that health care spend ing is being increased by $118 million this year.

Included in that is the initiative to increase home care assistance, Madam Speaker, whereby a $10 million increase is being allocated for services to provide home care services for seniors and others who are, for whatever reason , confined to their homes . And I think that this program, Madam Speaker, ultimately is a cost-saving program, I might add , because it is far more economical for the taxpayers to help people stay in their own home than to have them prematurely institutionalized.

As a matter of fact, medical experts , social experts , people who are into the field of sociology, social psychology , will tell you that people live far longer if they are able to live independently. It is, therefore, in the interest of the individua ls that we are talking about being assisted under the Home Care Assistance Program to enable them to stay in their own homes as long as possible .

Thursday, 19 March, 1987 It's good for the taxpayers. It's cheaper than being in stitutional ized. It's good for those particular individuals, and I'm very pleased that amount of money has been allocated. In the meantime, more money is going for education. The '87 incr ease is nearly 6 percent, and we'll be providing monies for students not only in the public school system but also our community colleges and our universities.

I might add, Madam Speaker, here is a case in point that we made before but we should make it again, that all of this has to be seen in the light of the fact that the Federal Government is reducing its share of the burden in health and post-secondary education. It's reducing its share of other burdens. We used to have far greater assistance from the Federal Government, from the Ottawa Government, than we have today in terms of the percentage of the burden, in terms of the percentage of the costs.

We find Ottawa is moving out and the provincial taxpayers across the country are indeed being forced to take up a greater percentage of that burden. And in the field of community colleges alone, the former federal Minis ter of Employment and Immigration, the Honourble Flora MacDonald, announced that there will be a 39 percent cut in the spending on community colleges in a three-year period of the commun ity colleges across the coun try.

I was at the particular conference where this was announced, and you should have seen the looks on the faces of the provincial Minis ters, particularly tho se from the Atlantic region. As we know, the Atlantic region is unfortunately not as wealthy as other parts of the country, and this was a major blow to places like Newfou ndland, New Brunswick, Nova Scotia and Prince Edward Island. I think the last Min ister there from the provinces stood up and said, "Look, our community colleges offer excellent training.

They are providing young people with skills that will enable them to make a contribution to the economic development of this great land of ours, and yet you are now reducing the expenditures." Now the theory was that that money would be made available to the private sector and that private business could come in and make the application, get the mone y, and go out and do their own training. Wel l, Madam Speak er, that simply has not happened. We said to the ministry it will not happen and, indeed, it has not happened, and we've now got the figures to prove that it has not happened.

So, as a result, there has been a real decrease, a real diminution in federal support of the community college system in this country of ours. That's only one example. You may think it's a small example. I think it's a very significant example. It's symptomatic of what's happening with the Conservative Government in Ottawa shifting their debt burden, their burden of financing, onto the provinces. It's fine if you are talking about Ontario or Quebec or maybe B.C., the wealthier provinces but, when you get to places like Newfou ndl and or PEI or wh atever, you'r e threate ning something there that has existed.

Ind eed, I would say they are threatening Medicare as we know it in this country right now by their particular approach to sharing the costs of health care. So I say that we see this right across the field and so we have to look at what we're doing here in light of what's happening federally . 423 Nevertheless, we are proceeding with other social programs, and the Min ister has outlined a number of these. We are cont inuing to provide property tax reductions. We suggested that there be changes in the Pensioner School Tax Assistance Program to provide assistance up to $175 to people in the 55-64 age bracket.

Indeed, there are other benefits. We have increased the Cost-of-Liv ing Tax Credit by a large amount of money. This will help the lower-end and the middle­ in come Manito bans. The in crease is 33 percent, assisting 293,000 Ma ni to bans, Ma dam Spea ker, including 79,000 senior citizens. At any rate, the fact is that to provide social services, to maintain the health care system, to maintain quality education, we do need funding, and I think that the funding that has been proposed, as I indicated, is fair.

If you look at the burden on individual categories, this has been spelled out by the Minis ter and it has been spelled out in documents provided by the officials of the Department of Finance. You see that we are still not too badly off when we compare ourselves with some of the other provinces.

The rates paid by a tax filer with an income of $40,000 per annum - this is with a family of four with $40,000 per year income - if you look at the statistics, including the tax credits, which you must, health premiums, if you look at the retail sales taxes across the board and the gasoline tax, you will find that we in Manitoba, for this family earning this amount, are certainly not at the top as some members opposite would like you to believe, Madam Speaker . The Provinces of Ontario, Quebec, Nova Scotia, New Brunswick and New foundland all come up with a much higher tax burden on that particular taxpayer.

So we are well below average in terms of the tax burden on someone earning $40,000 per year with a family of four. It would be interesting to see what happens, I think, later this week. The Provinces of British Columbia and Al berta are to come out with their Budgets, and it's going to be interesting to see what will happen, to what degree will the Province of Alberta continue to be free of retail sales tax. I think at some point, Madam Speaker, we are going to see sales taxes brought into being in Alberta and, indeed, at some point, I believe you will see Saskatche wan inc rease their sales taxes as well.

In fact, the problem raised by the Member for Russell could easily disappear, because I note that the deficit of the Saskatchewan Government was three times higher than what was forecast by the Saskatchewan Minis ter of Finance.- (I nterjection)- That's Cons ervative acc ounting. You kno w, we're out a few million, two or three tens of millions, and there is a big kafuffle. Here in Saskatchewan, they are out threefold . The y were out an enormous amount of money, and overnight the Saskatchewan Government is facing massive deficits.

I will predict, Madam Speak er, that you're going to see a lot of new taxes and services cut back at the same time in the Province of Saskatche wan. If we look at what's been happening, how this Budget affects people in the $20,000-a-year category, you'll see that the burden, when you take provincial income taxes, tax credits, rebates, the health premiums, the retail sales taxes and the gasoline taxes into account to make a comparison, you find that of the 10 provinces, a person in Manitoba in that category, the $20,000 --

Thu rsday, 19 March, 1987 income category with the family, is in the second-l owest in the cou ntry, the seco nd-lowest in Canada. Again, I say this is before the Alberta and B.C. Budgets are brought down, and goodness knows what's going to happen in the future in Saskatchewan. So we' re certainly not out of line. As a matter of fact, those people on the lower end , as I said, are not doing badly at all. The fact is, Madam Speaker , that we are blessed with a very buoyant economy .

In spite of all the criticism opposite about our various laws, whether they be labour laws or whether they be our health and education levy or whether they be other policies of this government, the fact is that we have experienced above average rate in economic growth, and all of the major banks are foreca sting a very strong economic performance of this economy , our provincial economy , in the next year. As a matter of fact, the Globe and Mail reflected today on forecasts of the Royal Bank of Canada.

The Royal Bank of Canada has said in its latest outlook that Manitoba will lead all provinces in economic growth through to 19 95 with an annual average rate of growth of 3.3 percent. So I think that speaks for itself, Madam Spea ker. That speaks for itself because not only is the Royal Bank saying that, but it's being said by the Bank of Nova Scotia. It's being predicted by the Bank of Nova Scotia. They are a little more cautious, but they too say that Manitoba's economic growth rate will be above the national average. That's not our estimates; that's the Bank of Nova Scotia.

The Conference Board of Canada also has indicated that we will have a very favourable rate of economic growth. The October 19 86 forecast showed us having the highest growth rate of any province. That comes about for a number of reasons, Madam Speak er. It comes about because we have a balanc ed type of economy . We're blessed with a diversified economy . We have some forestry; we have some mining; we have a freshwater fishery; we have a farm sector that is being undermined now by international prices of grains like the rest of the prairie economies, but we have devel op men t in vari ous segments.

We've got a devel opment of our transpor tation ind ustry. The financial institutions and other elements of our service sector are doing very well so that, all in all, this adds up to a favourable situation and it adds up to jobs for Manitobans. Madam Speaker , I would appreciate it if we could have a little quietness in this Ho use so I can hear the speech that I'm making. MADAM SPEAKER: Order please. HON. L. EVANS: Thank you, Madam Speak er. I wanted to indicate that the economic policies of this province, far from driving business out, have just had the oppo site effect.

We have had busi ness expansion, we'v e had more jobs created than the national average, and our rates of unemployment are the best in the count ry. In fact, Madam Speak er, not only the best in total in the countr y, but they're the best in the country for various components of our labour force. I'd like to point out, with great pride, that we have the lowest level of unemp loyment for women in Canada, and we're doing whatever we can to create 424 more job opportunities for women in this province of ours.

So all of these figures are very favourable, Madam Speaker , and I think speak very well of our economic approach. The youth unemployment rate compares very well and, as I said, if you look at the breakdown of the figu res showing where the jobs are created, you see that they're diversified. They're spread over many industries, and I think that speaks well as well. When we look at the labour force figures, Madam Speak er, they are broken down by Statistics Canada not only by sex but also by age categories.

When you consider for a moment the breakdown of the youth versus the not so young - the youth are in the category up to 24 years of age and then there's 25-plus - but it's the 25-plus people who tend to be the heads of the households, who have the family responsibili ties and so on. So even though we have a fairly good overall rate of unemployment, when you break it down and you look at it in terms of the number of people who are unemployed, 25 and over, you see that we're down to 6 percent for those people who are 25 years of age and over.

If you look at men, it's a little higher - 6.8 percent, but for women it's as low as 5 percent. I think, Madam Speaker , that when you get down to figures like 5 percent, you're getting down near that magical situation of full emplo yment. I guess you could argue full employment will be zero, but the fact is there is always some turnover of people going from one job to another. It's often referred to as frictional unemployment, so you always have to allow two or three points for that.­ (lnterjection)- Yes, often it's utilized; often 3 percent is used.

So when we're down to 5 and 6 percentage points, I think we're doing very well and we're getting nearer that rather magical state of full employment or state of economic bliss, you might say, although we have to recogn ize that we're not an eco nomic island to ourselves; people move in and move out. When there are job opportunities, we'll have more people come to Manitoba.

As a result, I suppose, unless you had cooperation with the other provinces and the Federal Government, you could never achieve full employment provincially alone because, as we know from the information we have, people will come and take jobs in Manitoba. We've had an influx of people from Alberta. We've had people come to us certain ly, from the Maritimes and, if the job opportunities are there, you'll certainly see people come into our province.

So you can never ever say that you're going to achieve full emplo yment at the provincial level unle ss you get total cooperation from the Federal Government or unless the other provinces are as concerned about job creation as this government is. At any rate, Madam Speak er, we have done our best to tighten our belts. We have tried to sque eze spending as best we can. I believe we have been realistic, we have been fair, and we've said those people who have more mo ney should be able to pay more. The information we have about the future in Manitoba is very encoura ging.

I mentioned the Royal Bank of Canada projecting an economic growth rate which should be well above the national average. That real economic growth rate also translates, according to them, to a growth rate of

Thursday, 19 March, 1987 job creation, that is employment growth, which is expected to be relatively strong, faster than any other province and above the national averag e. In fact, they are also predicting that the unempl oyment rate is projected to decline even further in this year and indeed some of the following years. Similarly, other banks - the Bank of Montreal just a few weeks ago, a couple of months ago - estimate that we will have a very favou rable rate of incr ease of our econo my.

It is anticipating a stronger growth in 1987 compared to 1986 in the retail area, areas of retail sales, manufacturing shipments, and investment. As well, housing is expected to remain strong in 1987 with even a higher number of new starts. They're anticipating new starts of around 7,500 to 8,000.

I guess if you took all these forecasts together and made an average of them, you take the latest forecast of the Conference Board in Canada, the latest forecast of the Bank of Nova Scotia, the latest forecast of the Royal Bank, the Bank of Mon treal and the Bank of Commerce, and you simply tally up all of these percentage incr eases and strike an average for Manitoba, you'll find that the average indicates that Manitoba has been above the national average in 1985; well above the national average in 1986; and again, is antici pated to be well above the national average in 1987.

So I say, Madam Speaker , there must be something right going on in the Province of Manitoba. I think that, while I would be the first to admit that there are other factors that affect economic growth but, as members opposite always rem ind us, the po licies of the Government of Manitoba have an impact as well. I say then, ii I accept their premise that policies of the Province of Manitoba have an impact on the econo my, then we should take some of the credit for this very favourable economic situation.

I might like to take a moment to talk about one of these policie s, one of these programs that we have brought into being under the Manitoba Jobs Fund, namely, the Job Tr aining for To morrow Program, a program that sees a lot of cooperation between this government and business. People like to forget that, when we get into these job programs, we do deal very closely with the business sector. As of Februa ry, we've had nearly 1, 000 jobs appro ved already and approximately another 500 are pending review.

We're dealing essentially with the small busine ss sector where you' ve got one, two or three jobs per empl oyer. We're inde ed working very closely with that sector and helping them expand their business. I might add, Madam Speak er, that this is indeed true training on the job, where there's a training analyst involved. So it's not a matter of just handing out money to the businessperson. We're saying to them, ok ay, what is it exactly? What kind of occupations are you talking about? What kind of skill do you want to develop here? A training analyst sits down with the employer and works out a training program.

It varies, depending on the degree of skill required. The level of training, the amount of training will vary. Certainly we've recognized in this program that we have to give some increased assistance to certain categories - and I mentioned women before. We're trying to provide enc ouragement to small busine sses to hire women in no n-traditional occupations; so there is inde ed additional incentive there. 425 Another element of the program is to provide incentive to emplo yers to hire people who are 55 years of age or over - the 55-plus category.

I'm very pleased with that particular element of the program and we've had quite a bit of inte rest taken in that area. If we can help people who regrettably are displaced, usually it's because of changing technol ogy, they lose their job in their fifties, they have a difficult time in obtaining work elsewhere. This is a program that will help them to go out and solicit with the potential em ployers. They can go out and solicit work for themselves and point out that the government's prepared to provide quite a bit of subsidy money, if they would be hired by that particular empl oyer.

I regret, Madam Speaker , that recently one major report of the Federal Government, namely, the Forget Report, is rather negative for the working people of this count ry, including the workers of Mani toba, and will have, in my judgment, a very negative impact on the welfare of working people in our province.

We have made our views known to the Federal Government very clea rly, and we hope that the Federal Government, in its wisdom, will not accept the major re commendations of the Forget Report on unem ployment insurance because if they do, Madam Speaker , this province alone will lose tens upon tens of millions of dollars in benefits paid to our working people thr ough the Unempl oyment In surance Commission. Ma dam Speak er , the Ho nourable Member for Mi nnedosa is asking about how many jobs were created in his area under the Job Tr aining Program.

I might add that of the numbers that I quoted, the numbers approved in his area - not for his city or his town, but in his area - has been well over 100. There are many, many more pending. So I think he'll find if he goes around his community, there will be many employers there who will have received some assistance from the program. Madam Speaker , in concluding, I want to say that I bel ieve, although you could argue theoretically whenever you tax, it has a dampening impact on an economy . The fact is that we are maintaining a high level of involvement in the public sector.

There is no major cutb ack of government spending and that has a positive impact on the econo my, and certainly there's a major in vestment going on in No rthern Manito ba, in Limestone, the megaproject that is under way now in the North American economy , providing thousands of jobs and having very positive spin-off benefits in the business sector of our econo my. We are blessed with the fact that we have a renewable resource, namely, abundant fresh water flowing down the Nelson River . We've got a resource there that will stand us in good stead forever if we harness it proper ly, as indeed we are.

So we are maintaining a positive position in the economy. All our programs are geared towards creating jobs, geared towards stimulating the econo my. As I say, there are programs in Industry, Trade and Te chnolo gy, programs in the Busine ss Development Department and even, as I say, the programs under our department where we provide job subsidy money to employers that are beneficial to the private sector. Our population is increasing, our housing starts are maintained at a high rate, the retail sector is doing

Thursday, 19 March, 1987 very well and, generally speaking, the economy is in fairly good shape. The one point I would make before closing, Madam Speaker, is that in giving more money, in effect , to poorer people in this province, as indeed this Budget does, the fact is that people who have low incomes tend to spend all their money and they have a much more positive impact, much more stimulated impact on the economy through spending than giv ing the money to people who are in the wealthy category , who may spend it, but may spend it outside of the country or who may simply save it.

So, in conclusio n then, Madam Speaker , I th ink that this Budget deserves the support of every member in this Legislature. Thank you. MADAM SPEAKER: The Honourable Member for Pembina . MR. D. ORCHARD : Tha nk you , Madam Speaker . Madam Speaker, after listening to several speeches from the members of the government who are attempting to defend this ill-fated Budget, I swear they have all taken the "P.T. Barnum snake oil hucksterism sales-pitch course," trying to sell such an innocuous damaging document. Only P.T. Barnum could tell them how to sell it.

It's unfortunate that the last speaker was not quite as eloquent in his pitch for selling this, but then maybe that indicates his enthusiasm for the Budget. Madam Speaker, we were faced last Monday night with what I describe as the Red Monday Budget, because it put every Manitoban in the red as taxpayers. It put the province further in the red, and there isn't one Manitoban who buys any amount of goods, who heats his home or pays an electric bill, there's not one Manitoban who escaped increase in taxation in the Red Monday Budget.

Not one Manitoban has escaped, despite the snake oil salesman pitch that certain income levels are exempt from this Red Monday Budget in its provisions . Madam Speaker, there's no question about it that the Red Monday Budget was the greatest pillage and plunde r of working Manitobans' pocketbooks that has ever been seen in the history of this province, taken from the working men and women of this province by a party that for 14 of the last 17 years of government have said they faithfully defend their interests.

Well, last Monday night the working men and women of the Province of Manitoba finally understood what these people will do to them if left in government long enough, and they've already been in there one-and-a-half terms too long, Madam Speaker . Madam Speaker, the difficulty of the Red Monday Budget from last Monday this week is that it's only just the beginning of what's going to happen in further Budgets tabled next year and the year after by the NDP.

I predict that each Budget that the Finance Minister brings down - and the term of the this Pawley administration will be equally as bad - will have the same kind of def icits, the same kind of taxation measures. We only achieved treading water to take our lips out of the water as Manitobans by this last Budg et despite the massive tax increases. 426 For any member that hasn 't read the inclusions of the Budget, $368 million in taxation alone are to be gleaned from working men and women in this province and from businesse s.- (Interject ion )- My hon ou rabl e friend from The Pas says given to whom?

Given to the bankers in Zurich; given to the bankers in Tokyo; given to the bankers in Manhattan. That's who 's got them because interest charges are up to $500 mill ion. That's who got the taxes . If the Member for The Pas doesn't recognize that then he should read the Budget document. (Mr. Deputy Speaker in the Chair .) Mr. Deputy Speaker, what we witnessed Monday night was the NDP vision of the future in the Province of Manitoba: more spending, more taxes , larger deficits, less services , fewer services .

Witness already the 9 percent bed cut in Brandon and, when we go through Estimates in Health, we're going to find out that there's going to be 10 percent bed cuts in Winnipeg . What we are facing right now is the second stage of NOP mism anagement. The first stage over the first four Budgets, Mr. Deputy Speaker, was increased deficits ; in total in five Budgets , $2.5 billion of increase d deficit. That was the first stage . What the NOP ran into was a brick wall in the borrowing and they were told by the money managers in Zurich, Manhattan, Tokyo , the European Economic Community - no mor e borrowing.

So what is their second phase? Then to go back to the people of Manitoba and tax them to death , to pillage their pocketbooks with $370 million of increased taxation in Manitoba alone, that's the second phase . Mr. Deputy Speaker, the third phase will come before the natural term of this government is over, and that is massive cutbacks , not imposed in a logical , rat ion al way, but imposed because the bankers in Zurich, the bankers in Manhattan , will say as they have said to Mexico, Brazil, Poland , no more borrowing, cut your ' spending.

That's where we are going to be before the natural end of this government's term and that is a disastrous place to be. Mr. Deputy Speaker, there was no mention of eff iciency whatsoever , of achieving manag eme nt efficiency in government in th is Budget. These people simply talk borrowing to cover expenditures and taxing to cov er expenditures. They never once dealt with how to make government more efficient. Mr. Deputy Speaker, what is it that makes these NOP Cabinet Ministers and backbenchers believe that they are running government efficiently? Is it the example of the Member for St.

James and the Telephone System with a $27 million loss ? Is that efficient management , Mr. Deputy Speak er? Is that the example that we have in every line department of government? Is it now the example of the Minister respon sible for Autop ac tabling docum ent s showing a $58 million loss to the people of Man itob a in that Crown corporation? Is that the example of the efficiency in management that they profess to have within the line departments? Mr.

Deputy Speaker, we are in serious troubl e in this prov ince, compliments of mismanagn ient by the NOP and their refusal to even mention managem ent effici ency in this last Budget. Mr. Deputy Speaker , the one thing that happened to me Monday night as I listen ed to the Budget come

Thursday, 19 March, 1987 down and the massive tax increases and the massive deficit and the massive cutbac ks in services that are going to result and the hardship upon working men and women in this province and the hardsh ips put upon the business community to maintain the jobs they are now providing to Manitobans , what made me somewhat proud when I heard the disastrous Budget being brought down was I was proud of the fact that from 1977 to 1981 I was a member of Sterling Lyon 's government in the Province of Manitoba, because in the four years that we were in government not one service was cut back in the Province of Manitoba ; they were expanded.

New programs were added in health , community services , shelter allowances for renters , for elderly . We had massive increases in funding to needy organizations . We maintained our road system . We maintained the Natural Resources Department . Mr. Deputy Speaker, we did it while reducing taxation and reducing the deficit: better services, more services , lower taxes, lower deficits in four years of Progressive Conservative Government under the Honourable Sterling Lyon as Premier. That is a record that I am proud of.

Follow that and contrast it with five-and-on e-h alf years now of NOP mismanagement, taxes going through the roof , double the taxation there was in 1981, deficits of now $3 billion in six Budgets, soaring interest costs . Mr. Deputy Speaker, the only tax - and I apologize if I slightly misled the House, and I'll apologize for it - because there was one tax that did go up during the Lyon regime, and that was the gasoline tax.

But of course at that time we were spending money on highway construction and maintenance in direct contrast to what this incompetent Minister is doing with the gas ta x in the Province of Manitoba . I want to just offer you one set of figures , Mr. Deputy Speaker. This Minister of Highways is spending $87 .9 million on highway construction while his Finance Minister is pillaging the drivers of Manitoba for $115 million in gasoline tax alone. They