ISSN 0542-5492 Second Session - Thirty-Second Legislature of lhe Leglslatlve Assembly of Manitoba DEBATES and PROCEEDINGS 31-32 Elizabeth II Publl•lted under tlut autttorlty of The Honourable D. Jame• Walding Speaker VOL. XXXI No. �68 - 8:00 p.m., THURSDAY, 12 MAY, 1983. Printed by the Office ot the 0.-.s Prirrl«. Pr- ot Afenilobll

MANITOBA LEGISLATIVE ASSEMBLY Thirty-Second Legislature Members, Constituencies and Political Affiliation Name ADAM, Hon. A.R. (Pete) ANSTETT, Andy ASHTON, Steve BANMAN, Robert (Bob) BLAKE, David R. (Dave) BROWN, Arnold BUCKLASCHUK, John M. CARROLL, Q.C., Henry N. CORRIN, Brian COWAN, Hon. Jay DESJARDINS, Hon. Laurent DODICK, Doreen DOERN, Russell DOLIN, Mary Beth DOWNEY, James E. DRIEDGER, Albert ENNS, Harry EVANS, Hon. Leonard S. EYLER, Phil FILMON, Gary FOX, Peter GOURLAY, D.M. (Doug) GRAHAM, Harry HAMMOND, Gerrie HARAPIAK, Harry M. HARPER, Elijah HEMPHILL, Hon. Maureen HYDE, Lloyd JOHNSTON, J.

Frank KOSTYRA, Hon. Eugene KOVNATS, Abe LECUYER, Gerard LYON, Q.C., Hon. Sterling MACKLING, Q.C., Hon. Al MALINOWSKI, Donald M. MANNESS, Clayton McKENZIE, J. Wally MERCIER, Q.C., G.W.J. (Gerry) NORDMAN, Rurik (Ric) OLESON, Charlotte ORCHARD, Donald PAWLEY, Q.C., Hon. Howard R. PARASIUK, Hon. Wilson PENNER, Q.C., Hon. Roland PHILLIPS, Myrna A. PLOHMAN, John RANSOM, A. Brian SANTOS, Conrad SCHROEDER, Hon. Vic SCOTT, Don SHERMAN, L.R. (Bud) SMITH, Hon. Muriel STEEN, Warren STORIE, Jerry T. URUSKI, Hon. Bill USK1Yt4 Hon. Samuel WALDING, Hon. D. James Constituency Ste.

Rose Springfield Thompson La Verendrye Minnedosa Rhineland Gimli Brandon West Ellice Churchill St. Boniface Riel Elmwood Kildonan Arthur Emerson Lakeside Brandon East River East Tuxedo Concordia Swan River Virden Kirkfield Park The Pas Rupertsland Logan Portage la Prairie Stu rgeon Creek Seven Oaks Niakwa Radisson Charleswood St. James St. Johns Morris Roblin-Russell St. Norbert Assiniboia Gladstone Pembina Selkirk Transcona Fort Rouge Wolseley Dauphin Turtle Mountain Burrows Rossmere lnkster Fort Garry Osborne River Heights Flin Flon Interlake Lac du Bonnet St.

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LEGISLATIVE ASSEMBLY OF MANITOBA Thursday, 12 May, 1983. Time - 8:00 p.m. CONCURRENT COMMITTEES OF SUPPLY SUPPLY - ECONOMIC DEVELOPMENT AND TOURISM MR. CHAIRMAN, C. Santos: Comm ittee please come to order. The Member for Stu rgeon Creek had the floor when we were interrupted for the Private Members' Hour. He has 15 minutes. MR. F. JOHNSTON: When we adjourned, Mr. Chairman, I was saying that, regardless of all of the good work that the department can do and all the programs that they have, the policies of the government were what will de cide whether the eco nomic cond itions of Manitoba will change.

I had mentioned the payroll tax, and I had mentioned some comments by union leaders. I mentioned another one, the hearings that we have just had on pensions in Manitoba. I fully realize that won't be initiated this year and I'm not against having a good pension program, but if Manitoba is going to be out of step with the other provinces, it will be just another area where people who want to invest in Manitoba will ignore Manitoba. We are in the position at the present time of exports being down, manufacturing being down, tourism being down.

The Minister keeps saying that retail sales are up, but not nearly up as much as inflation. So the province at the present time is in the position of having to recover after having a decline during the past year and a half in Manitoba. I don't really see the government having any policies, other than the Venture Program, that is going to really create a situation in Manitoba for increased economy. The $200,000 Jobs Fund is government money, and it is not going to create more investment; by investment, I mean by outside people coming in and investing.

I think it was proven today that when you are competitive, as we are in the oil business at the present time, you receive investment. I think it's going to be proven that provinces who take a look at tax reductions or tax incentives - and it's not a bad way to look at it; you don't have the money now - are going to be the people that are going to move ahead. Let me just read to you what you're up against in Saskatchewan, and I don't know whether the Minister gets the releases from Saskatchewan or not. "Small business details announced." It's also put up in the Manitoba Business.

"A $3 million special project fund will help finance productive investment in the public sector, sup porting more than 400 jobs. In the private sector, a new $20 million small bu siness tax credit program will provide a 5,000 tax rebate for each new employee hired by small business. That, Mr. Chairman, is an incentive for small bu siness to go forward. That's an incentive for Saskatchewan small business to go after the development that will take place in Western Canada.

Manitoba was on the threshold, until we hit the recession, of being the province that was going to get the advantages of the western development and the western devel opme nt will be there. The western development will be there because of your energy situation. None of us knows really what's going to happen on the Crow rate situation. But whether the Crow rate changes or not, the railroads are going to have to do a fair amount of expansion.

Unless we have a program that will give our small bu sinesses the opportunity to expand, we will lose to Saskatchewan, and we'll lose to Ontario who we've always lost to before. I pick up, I read if I have del ivered to me, Saskatchewan Manufacturing Opportunities for 1983 catalogue that is put out. Saskatchewan says, we're going to do business. We're open for business. Mr. Chairman, the Manitoba government is not doing things to create the climate for investment that the other provinces are doing.

It is the philosophy of the government, and the philosophy of this government is such that we will not have as much investment. Well, Mr. Chairman, as I mentioned earlier, the department hasn't really changed. I really don't see any real initiative progr ams com ing from this department. I really don't. Well, I shouldn't say that, I see a lot of excitement being created by the government to say that we have policies that will help the economy. The Minister mentions the housing policy, Homes in Manitoba. They have an interest program for a good interest rate.

Yet the house builders say that if the federal program closes up, they'll have to close up. That doesn't say much for the provincial program. So the incentive as far as the housing is concerned is not really there as far as Provincial Government is concerned. The "wish list" that has been presented, I would venture to say, has had so little research that it's close to being disgusting. Nobody can tell me that there has been thorough research done on any of those programs. Nobody can tell me that any one of them is ready to go out to tender. Pardon me, the Technical College is going to go ahead.

But your $200 million Job Creation Project - there is no more money in the Budge t. Our finance critic has proven that. It is just not there. It's been taken from the depart ment. Let me take a look at the Estimates generally, and I know we can go through this clause by clause. but generally, when I see Salaries expanding in many of the departments, and I guess that's the increase that was decided on with the Civil Services Comm ission, but most places where I read Other Expenditures are down. How can you give the same service if your Other Expenditures are down just about through the whole Estimates?

Is the department saying, or the government saying that pencils and paper clips and trave lling expenses haven 't gone up? For those to be the same, you wouldn't be giving the same service but in many cases, in most of the cases through these Estimates, the Other Expenditures are down. I really don't know 2705

Thursday, 12 May, 1983 how that can happen, because as I sa id, if they stayed the same. you'd be behind the gun because expenses do go up. I don't see anything in the Department of Economic Development and the Minister is the Deputy Minister on the committee that is involved in resource development, Crown investments, et c., other than ManOil, that is any type of a large project that is looked at in the Province of Manitoba. We know that Hydro isn't going ahead. We know the Minister of Energy fouled that up.

We know that we have a situation where Alcan is not moving ahead in Manitoba, regardless of what the Minister of Energy says. He says they're still negotiating but Alcan has decided to expand in Quebec. I have an

article on my desk downstairs where Quebec offered $50 million to an aluminum company to invest in their province. Here we had one that was going to invest in Manitoba, that weren't asking us for a thing except for a part ownership of a Hydro plant and were willing to pay $600 million for that privilege. I don't see anything like that coming. I don't see anything like the potash moving ahead in this province, but I see it moving ahead in New Brunswick. So. Mr. Chairman, where are these large projects? I read Mr. Newman's

article in the Business Magazine the other day and he said that our service industry is one that has to be looked at and one that has to be developed and mo ve ahead . Manitoba has always had a good service industry. We have always had people that were capable of giving service to manufacturers, giving service to offices, giving service to cash registers, or even servicing ma nuf actu red produc ts or manufacturing factories across Western Canada.

We've serviced the farm industry; we've serviced the railroads, and we are going to have a service industry; but there comes a time when the service industry will get so big that they'll be looking around for somebody to service.

It sounds a little corny maybe, but I can tell you that unless we start to develop some large manufacturing developments in the Province of Manitoba, we are going to be in the position of just being a manufacturing province that takes care of the agricultural industry and small manufacturers that take care of the service industry, but they will not have any large industries which they need to survive. They need those customers to survive. We won't have a car industry in Manitoba.

There are several industries that we will never have in Manitoba, but we do have the opportunity because of our power, because of geograph ies to have some large ones that will be of benefit to this province. I know the Minister and I went through this last Estimates, where she said that these large industries . . . MR. CHAIRMAN: The member has one minute. MR. F. JOHNSTON: . . . weren't that desirable because they might not stay.

Well I can assure you that anything that stays in Manitoba for 25 to 50 years employing people and having the type of investment that we had available to us is beneficial to this province. I don't see anything like that hap pening with this government. It has just not been put on the books to date. So, Mr. Chairman, the proof will be in the pudding. The count ry, as everybody says, is maybe on its way back from this recession. We will see whether Manitoba moves out with private investment versus publ ic investment, and public investment will not create the long-term jobs that the people of Manitoba want.

Thank you. MR. CHAIRMAN: Before we proceed any further, the Chair wishes to invite the members of the administrative staff of the Department of Economic Development and Tourism to take their respective places. We are starting with Item 1.(b)(1), because we wish to postpone, as is customary, the Minister's Salary which is Item 1.(

a) as the last item for consideration in this budgetary Estimates. So we are now in Item 1.(b)(1) and i.(b)

(2) Executive: Salaries, Other Expenditures - the Member for Sturgeon Creek. MR. F. JOHNSTON: These expenditures are for the Executive office. I wonder if I could ask the Minister, the Salaries are up slightly, $5 1,800.00. Does that mean that there is more of a staff in that department which covers the Deputy and the Minister's secretarial staff and Executive Assistants, etc.? HON. M. SMITH: Just to clarify. During the year there was a transfer out, during 1982-83, of three persons from the department and that's therefore the corrected figure.

The increase is the two salary increases which occurred in the one year, plus the 27th pay period. MR. F. JOHNSTON: Well the Minister had an Executive Assistant last year. I have been told that the Minister has two Executive Assistants now. Is that the reason for the increase? HON. M. SMITH: Our staffing pattern is one EA and one SA responsible to the Minister. MR. F. JOHNSTON: Does the Minister have a rundown of the number of SMYs in the different departments that she could table with us? HON. M. SMITH: Yes, we will provide that information for you. MR. F. JOHNSTON: Well, Mr.

Chairman, there's been many occasions when we have spent a lot of time on the executive. It is an area where it is the operations of the offices of the Minister and Deputy Minister, and that is very wide ranging. I've just noticed that there is some increases in salary. Has the total SMYs of the dep artment been increa sed ? That's Economi c Development. HON. M. SMITH: In the total department there's been an increase of five. from 239.08 to 244.08. In the executive

section there's been a reduction of four, from 48. 13 to 44.13. MR. F. JOHNSTON: Well in the executive section, the reduction of th ree, I'm having a little trouble wondering how the reduction of three can take place. I know that HON. M. SMITH: The figure is adjusted . 2706

Thursday, 12 May, 1983 MR. F. JOHNSTON: . . . Mu rray is gone, but I don't know who else is gone. HON. M. SMITH: I'm not sure whether your uncertainty is stem ming from the amount of the salary figure in the book, or that you are just wondering who the individual people are? MR. F. JOHNSTON: Well, I would ask then who the individual people are? HON. M. SMITH: There's been a transfer-out of two secretaries, an administrative officer and another staff person. Sorry, two secretaries and administrative officer.

The complement, perhaps if we go at it the other round, in the Executive sect ion, there is the Deputy Minister, an EA and an SA, a special assistant to the deputy and three secretaries. MR. F. JOHNSTON: Well, I'm having trouble wondering where the two secretaries went. There were never any more than that. HON. M. SMITH: Well, there were four when I entered office a year and one-half ago and there are now . . . MR. F. JOHNSTON: There are just two secretaries now. HON. M. SMITH: No, sorry, there were five and there are now three. MR. CHAIRMAN: The Member for Rhineland. MR. A. BROWN: Mr.

Chairman, we notice that there is an increase of 25 percent in Salaries in 1.(b)(1) and the Minister says there's been a reduction of three positions. No w somebody mu st ha ve received a trem endous salary increase, if th ere has been a reduction of three positions and you have a 25 percent increase in salaries. I would like the Minister to explain what has been going on. HON. M. SMITH: The figure in the book has been adjusted to recogn ize those transfers out, so the comparative figures are the salary levels for the current staff complement. MR. A.

BROWN: At the same time though, we have three less positions and we have an increase of 25 percent in the Salaries. Who has been receiving these increases? HON. M. SMITH: There have been two Civil Service increases that have been folded into one year plus the 27th pay period, and that's what accounts for the apparent jump, but they've all fallen within the Civil Service pattern. MR. A. BROWN: Could the Minister then identify these two civil servants that have been folded into one year, as she puts it? HON. M. SMITH: No, they're two Civil Service increases. MR. A.

BROWN: Could the Minister then say how much these increases were? HON. M. SMITH: I think it's been consistent across all departments but I can get the precise percentages if you like. MR. A. BROWN: It would be interesting, Mr. Chairman, to have the exact increases that have developed over this period of a year, since the last Estimates came out, because we would like to check to see what has been going on. Mr. Chairman, I don't know if this question has been asked , but I know that we have a new Deputy Minister that I am really not familiar with.

I don't know if the Minister had introduced the new deput y, but I would like the Minister, if she has not done this, then I would like her to do so and maybe give us some of his background. HON. M. SMITH: I would be very happy to do that. The new Deputy Minister is Mr. Ed Robertson, the gentleman here on my left, who has been with us for several weeks now. I would also like to acknowledge Hugh Eliasson to his left, who served as our extremely capable and co-operative Acting Deputy Minister since last August. Our new Deputy comes to us through an open Civil Service competition.

He has worked in Ontario in the immediate past with the Department of Northern Affairs and Tourism, where he has done a great deal of work in commun ity development and strategic planning. He also took

part in the cross-Canada federal task force studies of different industrial sectors. Prior to that, he has had experience in private sector here and in England and did work for a considerable length of time in England with the Federation of British Industry with special responsibility in the area of industrial relations. We feel extremely fortunate to have such a person as our depu ty, and look forward very much to the work ahead. MR. A. BROWN: I wonder if the Minister could give us the same background on Mr. Eliasson as to where he's from and what he has been involved with. HON. M.

SMITH: Hugh Eliasson is Winnipeg born and bred, as far as I know, and has been a graduate of our own Faculty of Admin Studies at the University and an M.B.A. Hugh has been with the department since early 1977, and has had special responsibilities primarily in working with the Enterprise Manitoba Agreement. He did serve as a special assistant to the previous deputy when he had to be away, and distinguished himself by his coolness and capabilities and overall knowledge of the department. MR. A. BROWN: I notice that the deputy, Mr.

Robertson, has been involved in the private sector, and I would say that is most encouraging. I wonder if Mr. Eliasson has also been involved in the private sector and private business. HON. M. SMITH: Not directly. MR. A. BROWN: These question that I am asking, Mr. Chairman, are questions which are continuously being 2707

Thursday, 12 May, 1983 put to me. As we know very well, that the Minister herself has not been involved in private business, and so the business community out there feels that it is essential that somebody that is close to the top, either the deputy or the close advisers, that it is essential that these people have been involved in private business at some time or another, because there is a lot of experience that is gained through being in private business that can be gained no other place. So I am pleased to see that the Deputy Minister, at least, has been involved in private business.

In the Salaries, are there any contract positions in 1.(b)(1)? HON. M. SMITH: No, we do not have anyone on contract at the present time. MR. A. BROWN: Are ther e any comm ittees or commissions operating out of this office? HON. M. SMITH: No. MR. A. BROWN: So this is only full-time staff then that is involved directly with the Minister's and then with the Deputy Minister's office, from what I understand. HON. M. SMITH: Yes. MR. A. BROWN: Among those people, is there a special group that is doing any consulting work for the Minister within this group? HON. M. SMITH: No. MR.

CHAIRMAN: 1.(b)(1)- pass; 1.(b)(2) - the Member for Sturgeon Creek. MR. F. JOHNSTON: Mr. Chairman, as I mentioned in my remarks earlier, the Other Expenditures seem to be down considerably, and I just assume that the Other Expenditures are down in this department because there was a transfer out of two people. I imagine that's the case, so we'll just pass that. MR. CHAIRMAN: 1.(b)(2)- pass; 1.(c)(1) - the Member for Rhineland. MR. A. BROWN: Again, I notice that there is a 21.3 percent increase in Salaries. Is the reason for that again that there have been two salary increases in the last year? HON. M.

SMITH: If I could perha;:is read from the information I now have on the previous item, I think it was a slight adjustment because of the different level of employee, gives roughly the patte rn. 1982-83, there was a 12.5 increase, and 1983-84, 10 percent, and the 27th pay period for the year accounted for 4 percent. MR. A. BROWN: And that is over a period of how many months? HON. M. SMITH: Both increases got charged to the one year. So it's over a 12-month period, but I guess should more reasonably be thought of as the increases that occurred over two years.

The 27th pay period, of course, is the anomaly that appears every fourth year. MR. A. BROWN: Who at the present time is in charge of this particular item, Finance and Administration? You must have a Director, I suppose. HON. M. SMITH: Yes. The gentleman sitting in the middle of the table over there, Mr. Wally Mialkowski. MR. A. BROWN: We notice that in some departments there have been a number of computers purchased, and I supp ose tha t this wo uld be one of thos e departments possibly at which some computers would be purchased.

I wonder if the Minister could tell me how many computers have been purchased, or whether they are going into a computerized program. HON. M. SMITH: The department has purchased two IBM personal computers. MR. A. BROWN: Would the Minister tell me at what cost? HON. M. SMITH: $25,000 each. MR. A. BROWN: Is this particular dep artment connected in any way with the Manitoba Data Services? Are they getting information from them or are they feeding information into them? HON. M. SMITH: The government is co-ordinating all its purchase of hardware and software in the computer field through Manitoba Data Services. MR. A.

BROWN: Because Manitoba Data Services are really available to all the departments, I wonder, was a feasibility study done before these computers were purchased? HON. M. SMITH: There was a very thorough study of the requirements of all government departments and the procedu res to be followed in evaluating and acquiring new equipment. Every department is required to work through that co-ordinating body. So I can assure the member that the case had to be well made and documented before the decision to make the purchase was made. MR. CHAIRMAN: The Honou rable Member fo r Sturgeon Creek. MR. F.

JOHNSTON: The information that was just passed to us shows this department has a decrease of two people by the look of it. Where did those two people go? If I am correct, this department does the researc h, has the research people in it, and the accounting people. Where did those two SMYs go? Or where were they working and they're not now? HON. M. SMI TH: There were not actual bodie s transferred. There were some vacancies which were reviewed in our repriorization. Each department in gov ernmen t attempted to set its pr iorities and accomplish its main programs without increasing the 2708

Thursday, 12 May, 1983 cost or staff compliment wherever possible. It was the decision in this department to shift a greater priority onto the activities und er the Manitoba Research Council, specifically to promote the technology field. Two vacant positions were given up from this sect ion to accomplish that. MR. F. JOHNSTON: Do we have the same number of people in the research staff? HON. M. SMITH: I ... MR. CHAIRMAN: Would the Member for Sturgeon Creek kindly repeat the question? MR. F. JOHNSTON: Do we still have the same numb er of people in the research staff or are they now under a different area? HON. M.

SMITH: Yes, they show up under 2.(aX5), under Strategic Planning, so there's no specific research staff in this section. MR. F. JOHNSTON: Again we have a large increase in salaries, a very large increase in salaries. We have the same amount of people, and we have a decrease in the Other Expenditures again. I just wonder how the Minister explains a decrease in Other Expenditures when the same number of people are there? HON. M. SMIT H: Well, the increase in salary is explained by the same response that went with the previous group. There were two annual increases that appeared in one year plus the 27th pay period.

The operating amount, the savings have been ach ieved through careful organ ization of the work of the department. MR. CH AIRMAN: The Ho nour able Memb er for Rhineland. MR. A. BROWN: Mr. Chairman, I would like the Minister to explain the two increases in the one year. It seems to me as if that is highly irregular, that we do not normally see two increases in salaries in a 12-month period of time. What is the explanation for that, or what is the reasoning behind this? HON. M. SMITH: Well, it had to do with the dates in which the agreements were sett led.

I think you'll find the same pattern throughout the departments. MR. A. BROWN: That is correct. I have been finding the same pattern throughout the departments. I'm just beginning to wonder about this. This means that within a period of 12 months, there have been two substantial increases. When was the first increase given, if I may ask the Minister? HON. M. SMITH: The 1981-82 settlement with MGEA did not occur until after April 1, of 1982. MR. A. BROWN: In April though. HON. M. SMITH: Well, after April 1. I haven't ... MR. A. BROWN: Yes, was it in April? HON. M.

SMITH: It's after April 1, so that would mean it would fold into this year's fiscal year, April 1 to March 31 st, 1983. MR. A. BROWN: Ok ay, that would have been after, even if it was after April 1, whenever it was, it would have been retroactive to March 31 st right? HON. M. SMITH: Yes. MR. A. BROWN: Now, we have another agreement now and I guess that this is what's bothering me. There has been another percentage increase and March 31 we know is the end of the government's year, it's the year end. Why was the second increase - when did that take effec t? Did that take effect before March 31 st? HON. M.

SMITH: The agreement was a two-year agreement, so they were able to put both the amounts into this year. Our budgeting was done with awareness of the increase in the salary side, so there was a redoubled effort to look for efficiencies and a better way of delivering service on the operation side. MR. A. BROWN: So the agreement was a two-year agreement, and I remember that it was a two-year agreement. Did the second part of the agreement come into effect before March 31 st, and if it did, when did payments start on that agreement? HON. M.

SMITH: No, it hasn't come into effect yet, but it will show up in the 1983-84 expenditures. MR. A. BROWN: I notice in this particular item, Mr. Chairman, that there is a reference library that's involved and I've noticed that in every department that we examine, you always have reference libraries. Could the Minister tell me, is there any thing in that particular reference library that is not in the library at the Archives Building? HON. M.

SMITH: This library has been built up with very specialized material relating to small-business industry and trade, and I think would have a fuller collection in those specialties than what exists in the Arch ive Building, which is a more general library . MR. A. BROWN: So, you are telling me then that in your library there are items relating to business, or whatever, that could not possibly be found in the Arch ives Building? HON. M. SMITH: I couldn't vouch for there being no duplications.

What we do have though, is a library that is available, on request, to public borrowers and it has provided a special resource, both to the department and to people involved in the business sector. MR. A. BROWN: I think that is possibly my concern, that every department has their own library and I'm just wondering how much duplication there is with the library at the Archives, and whether it is really necessary 2709

Thursday, 12 May, 1983 that each department have their own library when I know that there is a very comprehensive library at the Arch ives Building. It's just something that I was going to question the Minister on, to make sure that we were not duplicating things. HON. M. SMITH: Well, I think that's a very fair request and concern. This library does subscribe to specialized periodicals.

We find that business students do consult this library, and therefore we find that they seem to find that it has a wider and more specialized resource than what they can get at the university, and if I know students and their professors fairly well, I would think that someone has kept a pretty close eye on what libraries in the city do provide the service.

I think the steady traffic we get from business students does assure me that it is, in fact, a specialized library, but I certainly undertake to ask the staff to ensure that they do eval ua te it care fully and avoid need less duplication, because I think that is a fair concern. MR. A. BROWN: Mr. Chairman, I would appreciate that and if there is no problem, if there is no duplication of services, well, all right. If it's justified, then it's justified.

But I do know that the university does have quite an extensive library and we have this library at the Archives Building and maybe somewhere along the line between the two of them, we could work together and maybe make a bit of a saving in that particular item. Mr. Chairman, I notice that there are also some support services to the department listed under this item. I wonder if the Minister could give some indication as to what these support services are? HON. M. SMITH: Yes, there's an accounting service which, of course, is central.

There's a specialized clerical support for both legal and administrative activities. There's a central reg ist ry, mail and deliver y, photocopying, the library referred to already, pool vehicles. The services tha t are pr ovide d are in accounting and financial management, information, personnel, travel arrangements, word processing.

They look after the goods and stock such as office space, furnitur e, com mun ications equi pment, station ery, computer facilities and are res ponsible for reviewing all the legislative and regulatory requirements pertaining to expen ditures, records, revenues, procurement, personnel, reports and returns. MR. A.

BROWN: In other words, this is something . separate from what the Civil Service Commission would be providing, because I understand that the Civil Service Comm ission are involved in quite a few training programs for positions, so this would be something that would be quite separate from what the Civil Service Commission is doing? HON. M. SMITH: This department would be specializing in services to the 250 people in the department, but would be in commun ication with and co-operate with the Civil Service for special training programs. But there's not a duplication. MR.

CHAIRMAN: 1.(c)(1)- pass; 1.(c)(2)- pass; 1.(d)(1) - the Member for Sturgeon Creek. MR. F. JOHNSTON: Mr. Chairman, I notice there's an increase of $105,000 in the Salaries, and the Manitoba Bureau of Statistics has one more SMY than they had before. I'm not going to ask the Minister to give the explanation again. I just assume that it's because of the two pay periods and one more person. HON. M. SMITH: There has been a person responsible for developing economic accounts in co-operation with the Department of Finance; that accounts for the extra person.

The overall increase is, as the member has already intimated, tied up with the same salary increase pattern as exists elsewhere. MR. F. JOHNSTON: I wonder if the Minister could just - the person is with the Manitoba Bureau of Statistics and they are dealing with accounts? HON. M. SMITH: The member may have recalled some discussion about developing a Manitoba Economic Accounts Project, where we would be providing the data to the Department of Finance, so that they would have ability to simulate and know more about the economy of Manitoba and be able to test out different proposed programs in advance.

It's a very useful decision-making tool for both groups. MR. F. JOHNSTON: Didn't that person used to be in the Department of Finance that was liaisoning with the Department of Economic Development? HON. M. SMITH: It's a new project initiative taken jointly by the two departments. MR. F. JOHNSTON: Mr. Chairman, the Minister has said, "you will recall." Well, I'm having trouble recalling just what she has explained. In other words, the Bureau of Statistic s is now supplying stat istics to the Department of Finance, regarding different projects? HON. M.

SMITH: On the first point, when I said, "you will recall," I assumed that the Minister might well have heard of this proposal, because it was - I'm going to say floating around - what I mean is, it was a concept or an intention or something that was under review when I assumed duties in the department.

The idea was, through providing data from MBS to Department of Finance, that a model could be built that would enable people in Finance when they were evaluating different proposals, for example, different types of taxes and trying to work out their impact on the Manitoba economy, they could test them out on this model. So it's not for individual projects in our department so much as overall tax policies and programs that would affect the overall government. We did discuss the concept or the possibility of this program during last year's Estimates, and that also was what I was referring to that you would recall.

MR. F. JOHNSTON: Under those circumstances, has the Manitoba Bureau of Statistics been able to inform the Department of Finance the impact that the 1.5 percent emp loyment tax has on the economy of the Province of Manitoba? HON. M. SMITH: This accounts project was not in place. It would have been a very useful tool to use in assessing the impact. 2710

Thursday, 12 May, 1983 In the absence of this type of a modeling, the Finance Department did an impact study for the Cabinet with the tools they had available. It was in comparing the impact of the 1.5 levy with a percent or two of sales tax that revealed to the Cabinet that the sales tax was a much more regressive tax, that is, the weight would fall more heavily on people at the lower end of the income scale. That, in fact, did influence the decision to go with the levy to help comp ens ate for the approximatey $70 million cutback in federal funding. MR. F.

JOHNSTON: It's regrettable that this person was not in place when the 1.5 was put on because I can't, in my worst nightmares, believe that anybody in the Department of Economic Development could recommend to the Department of Finance a 1.5 percent employment tax, knowing the disastrous effect that it would have on the economy of the pr ovince, employment of the province and future investment in the province. The Minister says, "regressive.- the sales tax was more regressive." I don't know of a tax that is more regressive than a tax that puts people out of work. Mr.

Chairman, will this department now be making an evaluation of the 1.5 percent sales tax on the economy of the Province of Manitoba, and the effect it may have on investment? HON. M. SMITH: We will, of course, be looking at impact, but perhaps this is an example of where the concept of balance that the member said he had difficulty understa nding, is relevant. When faced with a cutback in federal funding as a government, we were faced with the question of how to make it up if we were going to maintain our health and post-secondary education services.

Now we could have let them go down and that would have impacted, I guess, on everyone. We could choose to raise money in order to maintain them, and that is in fact what we chose to do. In determining how we were going to raise that money, we operated on the concept that we, as a society, had to balance out the burden and the benefits so that it didn't all fall on one portion of the com mun ity, particularly on the people who were perhaps less able to cope.

Mindful of the honourable member's belief, which I know is sincere, that growth comes primarily, solely perhaps, from private-sector investment, I can see how he would feel that this was an unwise move, but it is our considered view that growth in tough times and good times comes from the private and the public sector and from the demand side as well as the investment side. We felt, therefore, that a progressive tax which did not take away the demand capacity, particularly of the poorer members of society, was the wiser move.

We realize it is somewhat of a deterrent to investment the same way any tax might be, but we also know that the private sector does understand that they cannot operate without sharing some of the good times and bad times of the total economy. We know that in other jurisdictions, they have a different mix of taxes and costs to deal with. For example, in Ontario, the employer has to pay a quite hefty and recently increased health premium. He must share payment of that with the employee.

In looking at the total package of taxes and costs in provinces across the country, although we all have somewhat different mixes, Manitoba does not score badly on that comparison. As a matter of fact, in the study that was tabled last year by my colleague, the Minister of Finance, we found that the cost of doing business in Winnipeg, taking all the reasonable costs and taxes into account, showed that Winnipeg was second best in the major Canadian cities. So that is an example of the balanced approach that we took.

We know that any levy at time of high unemployment and economic difficulty is a difficult thing to bear. It is difficult for businesses and employers, but also times of unemployment and inflation are very, very difficult for elderly people, for the unemployed, for young people who have never had jobs and students . It's also very difficult for them to cope with, so we were guided by that balanced approach. I think it is a responsible and fair approach. MR. F. JOHNSTON: Mr. Chairman, comparing Winnipeg with Toronto, Edmonton, Calgary, Montreal is not a good comparison when you're talking about businesses.

Small businesses in those areas have a tremendous amount of custom ers available to them that the Manitoba small businesses don't have. We were starting to create a market, or we were starting - let's put it this way - to be able to go after a market in Western Canada and, when the economy of the country broke down and the economy of Western Canada - mainly because of the horrible energy agreement of the Federal Gov ernment - broke do wn, it put Ma nitoba manufacturers in a very bad position, because we are only a million people and we are an exporting province in manufacturing.

To place a tax on employment at that time when there was no place for anybody to expand and no place for an increase in prices because of competition could only have harmed the small businesses and businesses in Manitoba. As the Minister says, any tax is some thing tha t does discourage investment and it will discourage investment. But to place that tax on Manitoba when it was put on, the effect that it had on the economy was basically loss of employment.

I am aware of two companies that let people go and the total of the salaries of the people that were let go was exactly the amount of the 1.5 sales tax, because they were having a tough time and there was no way they could increase prices. Mr.

Chairman, we have dwelt on that on many occasions, but I would ask the Minister again if there is going to be a re-eval uation done by the Manitoba Bureau of Statistics as to the effect the 1.5 sales tax has on the economy of this province in reference to business, and I ask that if that is going to be done, because there is no group of people that are involved in business in the province at the present time that have not said that this has been a harmful tax to the business people of the Province of Manitoba. HON. M. SMITH: Mr. Chairperson, I understand the honour able member's concern and perspect ive.

I submit, though, that he is looking at the economy and the society through the eyes of small business or potential investors only. I agree that's a very important 2711

Thursday, 12 May, 1983 component in society and their prosperity is necessary to our growth, but, Mr. Chairperson, they are not the only groups in society that deserve attention. If we had been cutting back on post-secondary courses that were supplying trained personnel for business, that might not have gone down so well, although! the impact might have been slow to show. If there were not health services available, again perhaps the only people who would have complained might have been the people who were affected by ill health, the misfortune of ill health.

Therefore, there might not have been as concerted an objection to it, but I guess our political and economic philosophy is that we must look at the economic well-being of the total group, that when times are tough we are not willing to say to 20, 30, whatever percent of society who are at the shorter end of things, that they must wait and tighten their belts for ten years until things look up. We believe we all must share the burden and find a way through the tough times toget her. It's a balanced approach that we believe in the long run produces the most impact both ways.

There was public investment that we put in to assist through the tough time to stimula te work for small business; there was money in people's pockets here so they could in fact maintain the demand for many small businesses. The exports to the west are things which are still possible if and when the big projects to the west get moving again. Meanwhile, through our Buy Manitoba Programs we are trying to ensure that small business, our own manufacturers, get access to what markets we have, get the assistance in becoming more competitive, and in seeking out new markets.

So that I think what we think we have put together is not only a re sponsible economic development approach, but we have not forgotten the needs of the less fortunate half of our society and we have tried to shield them somewhat against the worst adversities and offer them what we very much think they have every right to believe, and that is some reasonable share of the common wealth and productivity of this society. We certainly do realize that that one tax can be singled out and pointed at as the straw that broke the camel's back.

I think we might also say that we put in some special assistance programs to try to help those very companies, which were near the breaking point, through interest rate relief and some of the business ALERT initiatives. It was our choice of the way to do it, because we don't think that the only sector to be considered is small business. However important it is, and we do believe it is important, we still think the best way to go forward is in this balanced way. MR. F. JOHNSTON: Mr. Chairman, the Minister was defending the tax that was put on by this government on employment.

We realize that there are social services to be considered in this province, but the increased costs of social service if people are out of work, manufact uring employment and business employment is down. We don't need to talk about the construction industry or the service industries, etc., small business and manufacturing employment is down. This tax has been harmful from that point of view, that people may be out of work and are out of work because of this tax.

This tax, if the Manitoba Bureau of Statistics is the vehicle to supply statistics to the Department of Finance, will they be doing research on the effect of the payroll tax in the Province of Manitoba? We are in the Economic Development Estimates, but I would say that this tax is paid by farmers, it's paid by barbers, it's paid by everybody that employs somebody in this province, and everybody in this province has been suffering and suffer ing because of the economy in the country and the economy of this province.

Will the Manitoba Bureau of Statistics be doing a study as to the effect of the payroll tax on the Province of Manitoba? HON. M. SMITH: In such a study, what the Manitoba Bureau of Statistics does is provide the data that then enable s other departments to make their polic y decisions.

The policy decision that was made on that tax, as I said earlier, was made by Cabinet looking at all the groups in society, and although I can feel for an employer, and especially a hard-p ressed small business, feeling the imposition of such a tax, I suggest that a sales tax, which was the alternative, would hit the elderly, many of whose incomes are not keeping up with inflated costs, the unempl<'yed, the young, the disabled. The choice was to at least go to the people who were fortunate enough to have a job.

The tax was not against employment; it was for education, post­ secondary education and health services. It was an emergency-type tax because we were faced with a federal cutback which we could not control or prevent. Back to the Bur eau of Statistics. The type of information which they will be supplying to th e Department of Finance in the Economic Accounts Project will be in Phase I, which will be completed very shortly.

They'll be compiling data on gross domestic product at market prices by income component; next, gross domestic product at factor cost by industry; next, personal income by source; and four, government transfer payments to persons. The next phase of the study they will be looking at gross domestic expenditure at market prices by expenditure component, third phase to be completed by the end of this year.

They'll be looking at real domestic expenditure-by-e xpenditure component, using 1971 constant dollars and then the following year they'll be working on selected income and expenditure items, using both current and constant dollar tables. That information will be made available specifically to the Department of Finance and in that department they will be able to take that data and run the types of tests that the member suggests. MR. F. JOHNSTON: Mr.

Chairman, we now have an increased sales tax, and anybody that had the capability or anybody that had the opportunity to pass the 1.5 percent sales tax on, would increase pr ices to everybody, because everybody in business in Manitoba pays it, anybody that hires anyone. The fact of the matter is they weren 't able to pass it on and it was very harmful to small business. And very harmful to farmers; very harmful to everyone; and it's going to very harmful for future investment in this province. HON. M. SMITH: The member may recall that last year there was a cut in the small business tax rate to give 2712

Thursday, 12 May, 1983 them some relief and that the sales tax in fact did not go in last year, and this year it went in 1 percent, not the 2 percent that was expected last year. I would remind the member that if he keeps insisting that one tax will deter inves tment, he may create a self- fulfi lling prophesy. I think a wiser move on his part, as well as on ours, is to look at the total package of taxes and costs in this area and the areas where we do have comparative advantage.

There are opportunities for investment and we, for our part, are not that pessimistic that we won't get our reasonable share of investment dollars. MR. CHAIRMAN: 1.(d)(1) - the Mem ber for Sturgeon Creek. MR. F. JOHNSTON: Well, from what the Minister has said, then I can assume, or can we assume that the payroll tax will not increase? HON. M. SMITH: It would be presumptuous of me to make a decision which Cabinet will make when they have the most up-to-date data at the time that the Budget is being formed. A MEMBER: It scares you. MR. F. JOHNSTON: Scary is right. Mr.

Chairman, I would only say then that we have established a new tax in the Province of Manitoba that is in a position or is there to be increased if the Cabinet so decides. And any furthe r increases on emplo yment in this province would be disastrous. MR. CHAIRMAN: 1.(d)(1)- pass; 1.(d)(2) - the Mem ber for Rhineland. MR. A. BROWN: Mr. Chairman, this particular item is, as far as I am concerned at least, and I know that as far is everybody is concerned, a very important area, the Manitoba Bureau of Statistics.

Because if you don't have the proper statistics, there is no way that you can properly analyze a particular program that has been under way for a num ber of years or whatever, and to see whether it's a successful program or whet her you should be entering into different programs. So I feel that the Manitoba Bureau of Statistics has a very important role to play, and I think maybe for that reason we have been paying some extra attention to statistics, in whichever department we find them.

I notice that in the Department of Health, for instance, they used to do their own statistics over there and I notice that some of the SMYs over there were being transferred . Now I did not know where they were being transferred . Are they coming over into this Statistics Branch, are you going to be doing all the statistics for the Department of Health and for all the departments, or are some of the depa rtments still going to be doing their own statistics? HON. M. SMITH: No, we are not rece iving any statisticians from the Department of Health.

On the other hand the MBS has been moving increa singly to provide a service of integrating social and economic statistics relating to the province, but there are some specific stats areas that departments perform on their own. There is a co-ordinating committee of government that looks at statistical needs and in fact some of the base stats might come from the MBS and be then further refined and used by the Department of Health, but we have a co-ordinating committee to reduce and prevent duplication. MR. A. BROWN: How many reports are produced by this branch of the department every year? HON. M.

SMITH: Facetiously, I'll say lots, but if you give me a moment, I do have a list of the general reports which I could just run through quickly rather than give a total. There is a sourcing directory which is what we call one of our industrial services, it's a comput erized sourcing data base that identifies the supply capabilities of industrial service firms. That would be repair, maintenance, welding and machinery. As of Octo ber 1, 1982, 329 firms and 94 individual services were catalogued in the data base. Another one would be the Manitoba Sourcing Directory for manufacturing.

This computerized sourcing data base identifies the supply capabilities of manufacturers, we had one and it was updated. As of Octo ber 1st, 1,727 firms and 2,586 individual products were catalogued at data base. There 's a small area data development project, a generalized comput erized system was developed to produce a small area or sub-provincial level data, either general or custom ized for a specific requirement from individual statistical and administrative comput erized data bases containing postal codes.

This system is currently being tested; we are wanting to get data that could help us target some of our programs a little more specifically within the province. There's a survey review program. To February 28, 1983, 32 surveys have been reviewed. The bureau compiled and disseminated the report, Survey Activity in the Manitoba Government, 1981-82. Again the MBS looks to ensure that surveys are carried out according to the most professional standards of statistics.

There are statistical reports prepared; namely, the Quarterly Manitoba Statistical Review, for which we have 21 8 subs criptions, 164 of which are paid subscriptions; 1981 Census, 385 copies; Historical Investment, 11 copies; and Inventory of Administrative Records, 75 copies. There are specific information requests that the bureau responds to, and to February 28th there were 1,613 statistical information request s; 76 percent or roughly three-q uarters of these came from government departments and a quarter from the private sector.

In addition, 96 data requests were generated from four computerized data bases maintained by the bureau. The MBS also carries out statistical consulting. They assisted departments of Natural Resources, the Civil Service Commission, Northern Affairs, and Labour and Employment Services in providing both statistical and data processing consulting and operational services. They undertook a review of the word data processing requirements of the various branches of our department and were the ones to recommend the acquisition of comput er equipment to meet identified needs.

Again, they liaise with the eight feder al-provincial sta tistical comm ittees tha t meet to co-o rdina te provincial responses and input to Statistics Canada. 2713

Thursday, 12 May, 1983 MR. A. BROWN: Mr. Chairman, the reason that I'm asking this question is that so very often you get a duplication of statistics mailed to you; one from the Federal Government and one from the Manitoba Bureau of Statistics. Now, both of them are absolutely identical and you know that they have been xeroxed. One has the stamp of the Manitoba Bureau of Statistics on it and the other one has Statistics Canada. Now, that is the reason why I'm asking this particular question.

How many reports really are just absolutely xeroxed and, really, can we justify the amount of money that we're spending when we're xeroxing so many of the reports which appear under the Manitoba Bureau of Statistics and when they really are done by Statistics Canada? That is why I would like to know how many originals do we have in Manitoba and how many are copies? From the information that I have received then, it's a very very high percentage of these really come from Stats Canada, and all they are done is being xeroxed with the Manitoba Statistics put on them. HON. M.

SMITH: Well, if I hadn't known better, I would have thought the honourable member was sitting in on our Treasury Board Estimates meetings, because those were the very questions raised by myself and my colleagues. We have asked the bureau and, in fact, found that they had already started this, to review which stats were available elsewhere and which they would provide so that there would not be duplications. We also looked at the frequency of reports going out.

Some series of statistics might have been very important to send them out by monthly amounts in the initial stage; once they settle down, perhaps quarterly is enough. We may be, with some of our statistics, at a stage where annual reporting is quite adequate. So, in line with that, the MBS has already trimmed its traditional activities and made way for newer activities for the coming year; one of which will be the development of the Manitoba accou nts.

The other will be to further develop small area data development so that when we're doing things like Jobs Fund allocations, we can target a little more specifically to areas where unemp loyment is higher or where there's a special need. They are not only checking out their own efficiencies, but they're carrying out a data needs assessment for other departments as well.

They're moving more into the forecasting field to acquire more ability to forecast what is happening to the Manitoba economy and its various sectors, and this should perhaps lead us to have a more fine-tuning capacity when it comes to things like sett ing taxes. I might add that we didn't find very much planning and forecast ing capacity in our departments when we assumed government, and we found it a handicap when we were coming to make policy decisions, so we look forward to having a better capacity in these fields.

There is also a further development of demographic stats, which again are being fine tuned for specific departments; for something like the special needs of the Department of Health. There is a continued development and maintenance of the Manitoba Busine ss Reg ister. Now, this is something that has to be kept updated. It's broader than the sourcing directory for specific products but, as you can imagine, there are businesses forming and disappearing as an ongoing process. So keeping that register up-to-date is an important and somewhat time consuming activity. MR. A. BROWN: Well, Mr.

Chairman, I must say that I am pleased that the Minister is aware of the problem and that hopefully something is going to be done in this particular area because there's really very few original reports that you can find that have generated from the Manitoba Bureau of Statistics. Most of the reports that you're going to see, they have been direct copies of Stats Canada. I wonder if the Minister could tell me who is in charge of this particular program at this time. HON. M. SMITH: Yes, Wilt Falk, who's sitting over here at the side table.

But after introducing Wilt, I would like to correct the impression left by the membe r. I think one of the problems we may have is the ease with which things can now be duplicated and mailed out, but I assure you that if you have only received data that is a duplicate of some other of Canada's statistics, that you certainly haven't received a fair cross­ sect ion of what is generated in thd MBS. There are specific slats generated for specific purposes which don't receive as wide dissemination, but I'm sure that Mr.

Falk would be more than happy to speak with you and share the lists of statistics that are available. Just to identify a few that are Manitoba base, there's been a prices survey data, food prices data, energy prices survey and, of course, the sourcing directories which are all Manitoba based. So I think you have an impression that isn't really borne out by the facts, but I can see if you haven't actually seen these other statistics packages, that you might well have that impression. MR. A. BROWN: No, I'm certain, Mr. Chairman, that I don't have all the information because I did do quite a bit of checking.

Out of 57 reports that I went through, I found there was only four really that originated in Manitoba, and that's when I became really concerned about this. Then I checked the telephone directory and I saw that we had 13 people employed in that particular department . Then I checked some of the other provinces; namely, Saskatchewan, whose telephone book I had, and I found that they only had six people employed in that particular department . So obviously something isn't quite the way that it should be; either it's not right in Saskathewan or it's not right in Manitoba.

I'm not going to say which is right or which is wrong, but anyhow you generate some concern out of this. What is really needed in Manitoba, and in which there is not all that much information available, is in the entire farming industry, which is our No. 1 industry in Manitoba. We do not have the type of information, I would say, especially there. My colleague was mentioning that the business commun ity, there are more studies certainly could be done in the business community because there are some stats which are required which are not available. So I would hope that this particular area would 2714

Thursday, 12 May, 1983 go into different areas which are not already done by somebody else and provide the information which is required, especially in the small business and in the farming industry. I'm sure that there must have been a number of computers and they must have been purchased by this particular Bureau of Statist ics. Could the Minister tell me how many comp uters have been purchased and at what cost? HON. M. SMITH: One of the two departmental IBM s. Just a bit of information on the agricultural issue. The Deparment of Agriculture does generate some of those statistics specific to agriculture.

I have here in the general statistical review that's put out by the MB S, under agricultural statistics, they do list farm cash receipts by product; farm cash receipts by crop; farm cash receipts by livestock and product; and total farm cash receipts by province. There are more specific statist ics available through the Department of Agriculture. MR. CHAIRMAN: 1.(d)(2) - the Member for Rhineland. MR. A. BROWN: I realize, Mr. Chairman, that again you have to be careful that you don't duplicate what the Department of Agriculture is doing.

However, one thing that the entire agriculture community doesn't seem to have, and some thing th at really the Federal Government is not giving the agricultural commun ity, is we're lacking on marketing. We need to do more in marketing. Usually the information that we get is old. It's too late to make any use of it if we do get any information on marke ting. Maybe that is one particular area that I would be sugges ting if we could have more up-to-date information as far as marketing is concerned, this certainly would be most helpful.

One of the IBM s that the Minister was mentioning previously, one of them is situated here and that's the only one? MR. DEP UTY CHAIRMAN, A. Mackling: The Honourable Minister. HON. M. SMITH: One of the two in the department is being used by MBS. MR. DEPUTY CHAIRMAN: 1.(d)(2)- pass; 1.(e)(1) - Madam Minister. HON. M. SMITH: I'd like to just introduce to the committee the acting Chairperson of the Manitoba Horse Racing Commission, Jan Sylvester - Jan. MR. D. ORCHARD: What are you doing? MR. DEPUTY CHAIRMAN: I'm pinch-hitting here. Don't get excited. MR. D. ORCHARD: Are you collecting salary for this? MR.

DEPUTY CHAIRMAN: Sure. MR. D. ORCHARD: You don't earn what you make in Cabinet. MR. DEPUTY CHAIRMAN: Do you want to do it, Don? MR. D. ORCHARD: Not for what you are gett ing paid. MR. DEPUTY CHAIRMAN: The Honourable Member for Sturgeon Creek. MR. F. JOHNSTON: Mr. Chairman, what's the estimated handle for 1983 in the thorough breds? HON. M. SMI TH: The modera te es timate is $41,500,000.00. MR. F. JOHNSTON: $4 1,500,000. HON. M. SMITH: Yes. MR. F. JOHNSTON: So $41,500,000, we're only looking at the $1 million increase over 1982? HON. M. SMITH: We decided to set a fairly low estimate rather than a high estimate.

It's easier to adjust it upward than downward. The tracks across the country have been experiencing a fair decline. We actually were in the middle, perhaps a little bit up in the more favoured side on the thoroughbr ed in spite of the interruption last year. I think we were down about 2 percent, where we were up about 25 percent in the standard racing. We thought that the 41 million was a prudent estimate. If the handle is higher, of course, both the expenditure and the revenue go up somewhat proportionately. MR. CHAIRMAN, C. Santos: The Honourable Member for Sturgeon Creek. MR. F.

JOHNSTON: It was down closer to 10 - well it was 53 million in 1981, 53.3, so we had a drop of close to 13 million in 1982. I recognize the problems that were at the track. What are the numb er of racing da ys for thoroughbr eds this year? HON. M. SMITH: 110. MR. F. JOHNSTON: What are the percentages that will be paid to the purs es, breeders, and horsemen? HON. M. SMITH: Are you wanting the percent or the absolute numbers? MR. F. JOHNSTON: The percent. HON. M. SMITH: Sorry just one moment. I have the figures but not the percents. Just a moment. Here we are.

The thorough bred racing purse support will be 2.75 percent of wagering; the breeders' awards in thorough bred will be . 75 percent of wagering; the Racing Industry Development Fund in support of purses and breeders programs will be 5 percent of Triactor and Pick Six wagering on thorough bred races. There will be purse supports, breeder awards, sires stakes and capital support to the Great Western Harness Racing Circuit, and there will be support for purses and breeders for the harness meet equal to about 3.5 percent of wagering. There will be also be purse support, 2715

Thursday, 12 May, 1983 breeder awards and capital development for quarter horse racing. MR. F. JOHNSTON: Mr. Chairman, I don 't want to ask the Minister to repeat anyth ing. It's probably my fault. I was asking - I have the thorough bred at 2.75, 1.75 and the 5 percent on the Triactor . . . HON. M. SMITH: 2.75 is pu rse support; 0.75 for breeder's incentive; and 5 percent of Triactor and Pick Six. MR. F. JOHNSTON: Are the horsemen - do they have the authority to pass any amount of that onto the track for track improvements that relate to the horseman, such as the back stretch? HON. M. SMITH: No. MR. F.

JOHNSTON: Then, I wonder if the Minister - the handle for the standardbreds was $2.9 million in 1981 and $14. 7 million in 1982. That was the first year of the standardbreds at Assiniboia Downs. What is the handle estimated at for the standardbred meet in 1983 and what is the percentage going to the standardbreds? I think you gave me that before but I didn't take it down. HON. M. SMITH: The projected wagering of harness racing is $70,820,000.00. MR. F. JOHNSTON: And the percentage? HON. M. SMITH: For the standard? This is for the upcoming year you're asking? 3.5 percent for harness. MR. F.

JOHNSTON: And the numb er of days? HON. M. SMITH: 110 - the same as the thoroughbred. MR. F. JOHNSTON: That 110 goes through 1983 and 1984? HON. M. SMITH: No, sorry. Just wait one moment please - they're close in number but not identical. Both the meets that occur at Assiniboia Downs are for 110 days and then there are, of course, the meets out in the rural areas. MR. F. JOHNSTON: Is the $17.8 million take in the rural circuit as well as Assiniboia Downs? HON. M. SMITH: No. MR. F. JOHNSTON: What is the estimate for the rural circuit? HON. M. SMITH: About $1.2 million. MR. F.

JOHNSTON: And the days were 30 in 1981 and 33 in 1982. Has there been any increase with any of the rural circuits, or are they intending to add any, or will there be an increase in days? HON. M. SMITH: We're expecting about 36 days. MR. F. JOHNSTON: The qua rter horse - what is the estimate on that? If the Minister wants to give me qua rter horse, Assiniboia Downs and Rossburn all in one. HON. M. SMITH: There's two races at Assiniboia Downs and one at Rossburn - a one-day meet at Rossburn. MR. F. JOHNSTON: Have you got a handle on those? They totalled about 35,000 in '82. What is the estimate for this year? HON.

M. SMITH: It's difficult, with such a short period of experience, to guesstimate. I suppose one could say the same, or just slightly larger, but we can't be really more accurate than that. MR. F. JOHNSTON: Do you have the percentage that goes to the qu arter horse? HON. M. SMITH: There's a block grant to support that rather than a percent. MR. F. JOHNSTON: A block grant? The Minister said a block grant.

The reason I'm asking is, under the 1980 Annual Report of the Horse Racing Commission we have a total of $17,685 Provincial Support Programs purse supplement, etc., for the quarter horse, which is an increase of close to $12,000 over 1981. That's $5,500 in '81. HON. M. SMITH: For 1983-84 we're allocating $1 1,500 to purse support and breeders and $25,000 to capital improvements. MR. F. JOHNSTON: $25,000 to capital improvements. At Rossburn? HON. M. SMITH: Not necessarily. It will be worked with the industry . There is a rebate that they get from the total provincial tax as well. MR. F. JOHNSTON: Mr.

Chairman, if there's only qu arter horse racing at Assiniboia Downs and at Rossburn, if the $25,000 is not all for Rossburn, unless there's another area that is going to have quarter horse racing, some of it would be going to Assiniboia Downs. HON. M. SMITH: I think we did say there would be two days at Assiniboia Downs and sometimes there are some capital inputs that are required. MR. F. JOHNSTON: Mr. Chairman, I'm going to have to ask the Minister what capital will be required by Assiniboia Downs to run a qua rter horse race? HON. M. SMITH: So far the Downs did not require any capital.

Rossburn has been the only commun ity that has run one, but Mccr eary has also applied. Other smaller centres have expressed interest, so that is an amount that can be used if there are minor things that require to be done to run the races. MR. F. JOHNSTON: So it's Rossburn, Mccreary and any other rural area that may put in quarter horse racing or have it approved. 2716

Thursday, 12 May, 1983 HON. M. SMITH: I might be a little cautious in saying, any other. We might find we could only, if there was a sudden burst of interest. phase them in gradually, but I would have to be advised by the Commission. MR. F. JOHNSTON: I did say that might be approved. Mr. Chairman, I am looking at Exhibit B in the Horse Racing Commis sion Stat ement of Rev enue and Expenditures and Surplus for the year ended December 31, 1982. That is the second page, the Province of Manitoba Report of the Provincial Aud itor. I guess it would be about three-quarters of the way through the Report.

The Racing Commission of the Assiniboia Downs or the Province of Manitoba, the Chairman received 7,000; the Comm issioners received 4,000.00. There is one Commissioner, a Chief Commissioner, and there are four Commissioners. The Comm issioner and the Chief Commissioner and three of the Commissioners came into office on approximately April of 1982. There is only one Commissioner that had a full year. Under those circumstances, the amount that should be paid to the Comm issioners is $18, 250.00. It has. und er Expenditures, Commissioners' Honorarium, $26,750.00. Mr.

Chairman, if the Comm issioners had all been there all year, it would only be $22,000.00. The figures show $4,750, or - pardon me - it shows - well, much more than that. It shows $26,750, and it shouldn't be more than 22 if they all worked a full year. This past year, it should only have been 18,250.00. I am informed by the Provincial Auditor's Department that, in Decem ber, the Commissioners paid thems elves for the full year. I am also informed by the Auditor's Department that the Commissioners will not be taking any salary for the first three months of 1983.

That means that they will only be receiving this year's salary. Under those circumstances, the Commissioners prepaid their salary from December through to March 1983. They are not going to be working to the financial dates of the Manitoba Horse Racing Commission which is a calendar year. Now, if the Comm issioners decide to pay thems elves for a whole year right now and they did it the year after in March, somewhere along the line there is $4, 750 owing to the province. I would like to ask the Minister why the Hor se Racing Commission does not pay themselves monthly as many commissions do.

I would like the Minister to inform the Commission, or will the Minister inform the Comm ission that the y put themselves on a monthly income as most commissions do and get thems elves within the calendar year of this province or of this Racing Commission because, if it goes on the way it's going, somewhere along the line the province is owed $4,750.00. HON. M. SMITH: Mr. Chairman, the member may recall that the Act does give an annual stipend, not a monthly stipend, and that's the only guidelines that have been in place.

We are in process of reviewing how all boards and commissions are paid, and there should be a bringing of them all into line in the fairly near futu re. I would draw to the attention of the member that these amounts are a yearly amount. If they were broken down by the hour and the type of responsibility that the Comm issioners have contributed to this task, this figure would be five, six and seven times larger for this past year, because we have had an extremely unusual year and the Commissioners have given very, very freely of their time and of their effort.

One of the complexities we have had is that the Horse Racing Commission is set up on a calendar year, and the government and our department is operating on the March fiscal year. We are now looking into bringing them both in line and getting a new, more standardized way of rem un era ting mem bers of boards and commissions. But this is an anomaly that exists, because that is how the Act is set up. MR. F. JOHNSTON: Mr. Chairman, I can't accept that. If the Commissioners paid thems elves in December of 1982 for the work they did in 1982, it doesn't matter how hard they worked.

From March to the end of December, it should be $3,000 for three Commissioners; $4,000 for one Commissioner because he's the only one that was there all year; and it should only be $4,750 for the Chief Commissioner. If they had paid it that way, they would have paid thems elves for the work they did according to the laid-down amount of money that Comm issioners and Chief Commissioner receive in the Horse Racing Commission. They should have paid out $18,25 0.00. There has been $26,750 paid to the Commissioners in 1982. I can appreciate that they may have worked a little harder this past year or 1982.

If that's the case, go to Cabinet and raise their salaries, but that is not the case. The amount of money that should have been paid to the Commissioners in the year 1982, the calendar year of the Racing Commission regardless of what the calendar year of the province is, was $18,250.00. The Commissioners paid thems elves for a full year in 1982, and the Auditor's Department, as I told you, I have been in touch with them and they say they are not taking anything for the first three months of 1983, so will the y move to a calendar year and only pay thems elves a total of $18,250 for the 1983 calendar year.

The Commissioners are prepaying their salary and I ask the Minister to look into that and see that the Comm issioner's salaries and income relate to the calendar year of the Racing Commission. HON. M. SMITH: We have been working, along with the Aud itor, most of this past year in working out the affairs of the track and he has not raised any objection to this payment. The Act itself gives an annual stipend, it does not say when it should be paid.

The three months of this year that would be required to make this adjustment will, of course, be obse rved and when a new standardiz ed approach to remuneration is put in place, the adjustments for the different calendar years and amounts will be very conscientiously obse rved and worked through with the Auditor. I know, because we have worked so closely with the Aud itor, that he didn't express any concern with this particular way of charging the expense to the last year's account.

I sup pose it could have been left and shown up entirely in this year's calendar year, but when your calendar years don't jibe, I guess it is a judgment call which year you're going to put the amount in. MR. CHAIRMAN: The hour being 10:00 p.m., what is the wish of the members of the Committee? 2717

Thursday, 12 May, 1983 HON. M. SMITH: Committee rise. HON. S. LYON: You must be in trouble, that's why you are rising. MR. CHAIRMAN: Comm ittee rise. SUPPLY - ENVIRONMENT MR. DE PUTY CH AIRMAN, H. Harapiak: We're considering the Es timates of En vironment and Workp lace Safety and Health. We 're on 1.(

b) Administration: 1.(b)( 1) Salaries. The Member for Pembina. MR. D. ORCHAR D: Mr. Ch airman, it's my understanding that the Minister has an agreement with the opposition's official critic that we just ask questions on a wide-ranging numb er of things. Very good. Mr. Chairman, I would like to ask the Minister if he could give to me the details of the Clean Environment order that has recently been issued dealing with the ammonia emission standards at Simplot Chemical in Brandon. MR. DEPUTY CHAIRMAN: Mr. Minister. HON. J.

COWAN: Basically by way of background for the record, the Clean Environment Commission was requested by myself to undertake a review of ammonia emissions in Br andon as a result of a series of complaints that were forwarded by different parties to this government regarding emissions and the effect they were having on residential areas and the impact they were having on the communit y. The Clean Environment Commission did undertake a series of public hearings and came back with a set of recommendations.

Those recommendations basically were that there should be a two part per million level for ammonia emissions in residential areas imposed. Does the member want me to go through all aspects of the order? I can go through . . . MR. D. ORCHARD: Over what time period? The two parts per million? HON. J.

COWAN: Two parts per million over one hour; and that there be a scrubber or a flare system or other abatement procedures put in place on the low pressure ammonia system and on the new urea plant; that Simplot install and maintain an ammonia monitor in the area; and that there be a comm ittee comprised of representatives of the community, the Environmental Management Division, Green Acres residences - I think there's an association organization there - and Simplot. As we reviewed the order, there were three appeals that were brought forward. We discussed those appeals.

We discussed the order, and our final recommendation and direction to the Clean Environment Commission was that an order be issued that would uphold the two parts per million, would allow for that level to be exceeded under conditions of plant shut-down, power failures, plant start-ups, and a couple of other specific instances. I can get the detail for the member if he requires it. I don't have it in front of me at this moment. We added, in that instance, plant shut-downs and start-ups and power failures as being a period by which exemptions could be had.

We also, while we stayed with the two parts per million level, we called for two Clean Environment Commission public hearings to be held; one in June or July, I believe, and one in Octo ber. The first one would be to accept comments from local area residents in Simplot on how the order was being pu rsued up to tha t time. It was sort of a replacement for the committee. We had some real concerns about that type of committee being able to work effectively.

We don't say that it can't work, but we did have some concerns in this instance that we didn't have enough time to really direct the type of energies and attention that would be necessary to make it work, if we did want to pursue it in that way. Secondly, we weren't certain that even if we did have that time, that we could make it work. So, instead of going with the committee, we said we would go with the public hearing in June and that public hearing would allow for all the parties that would be affected to come forward. MR. D. ORCHARD: June of 1983? HON. J. COWAN: This year .

And that would allow for all the parties to come forward and to present their case and it's also an opportunity for Simplot to say, we have accomplished this or we haven't accomplished another goal and to explain why. Then we asked for another hearing to be held in October of 1983. That hearing specifically is to review the conditions of the order, such as the two parts per million, to see, if, in fact, that is a legitimate goal and objective to im pose upon Simplot. We know from a nuisance point of view, it is legitimate.

We know other jurisdictions have used a similar figure, but there isn't a lot of control of ammonia emissions throughout this continent. So we are treading somewhat in new territory and we wanted to make certain that we allowed Simplot an opportunity to attempt to meet those objectives and they've indicated that they will attempt to meet them. But we also want to allow them an opportunity to come back at a later date and say, we tried to meet them and here's what we accomplished.

Hopefully, they'll say, yes they did, but if they say, no, we just couldn't meet them for these particular reasons, then we're prepared to sit down and discuss why it is they couldn't meet them . That do esn't mean th at the y ma y not be continued, but it gives them an opportunity to discuss, in an open way, problems that they may have had and experienced in trying to meet those objectives. MR. D. ORCHARD: Thank you, Mr. Chairman. Now, the Minister indicated that the company established an ammonia monitoring station within the residential area. HON. J. COWAN: Perhaps I can just clarify that. MR. D.

ORCHARD: Sure. HON. J. COWAN: The Environmental Management Division operates a monitoring station in the area. We 2718

Thursday, 12 May, 1983 have asked the company to establish one. We have given them until January 1st of next year. It takes that long to get the equipment in place. MR. D. ORCHARD: Well, Mr. Chairman, I have to admit, I am not familiar with the requirements under the se kinds of Clean Environment emission orders. Is that a normal requirement? Would HBM&S at Flin Flon be required to establish their own monitoring station?

It seems to me that having the offender estab lish his own monitoring station to prove his own guilt, as it were - let's say emission standards exceed the Clean Environment Commission order - I question whether you co uld legally use their infor mation from their monitoring station as evidence for prosecution. It's self­ incrimination, and I think there are laws that say you can't give self-incriminating test imony. Is that a normal procedure for the company to be required to put in a monitoring station at their own cost and operate it at their own cost? HON. J.

COWAN: It's an interesting legal technicality that the Member for Pembina addresses. I can indicate that there are companies that have their own monitoring stations; that they share that information with the Clean Env ironm ent Commi ss ion; tha t when we look at prosecu tions, and we do from to time to time although it's certainly a matter of last resort, but when we do that we use our own data.

In this instance, we will have our own data as well, but we felt that - actually the Clean Environment Commission felt and we agreed with them - there should be another monitor in the area and we felt that because it was monitoring Simplot emissions specifically, that Simplot should have a responsibility to bring that monitor onstream. They argued, by the way, in their appeal that they shouldn't have to do that. One, I think they didn't believe it was their responsibility; second ly, they argued that the direction that was given was too vague as to where it should be placed and how it should be placed.

It was also indicated to me - I'm not certain whether the y argued - but it was also indicated to me that the time frame given in the Clean Environment Commission order was too short to get the equipment up and running because it has to be ordered in, put in place, calibrated, tested, set up. So we did, in fact, indicate to them that we would work with them over the next little while to ensure that it was properly placed and they had some direction in that regard. We gave. them until January 1st of next year, 1984, to have it in place, knowing that it would take them some time to get it in place.

I don't believe we have forced, by way of order, other companies to unde rtake monitoring of this nature, but we certainly have had other companies put together monitoring programs on their own, voluntarily, and share the results with us. It would have been far better if Simplot had done it voluntarily, but in fact they didn't. When I did discuss this issue with them, and when I discussed the whole issue with them, they felt that we had given them a tough order - and I think the press indicated that - we gave them some tough goals and objectives, but in fact it was livable and they would try to attain them.

So I don't think we have imposed upon them to the extent where they believe the imposition to be severe. MR. D. ORCHARD: Mr. Chairman, the Minister has indicated sort of an interesting - if I read his comments right - divergence from a normal Clean Environment order. The Minister has indicated that in other potential air polluters, they have their own monitoring equipment in place. Yet, in this particular instance, they have insisted this be part of the Clean Environment order.

I guess my question would be: Were the other companies who monitor air quality in and around the environs of their plant, were they doing that as part of the normal plant operation? In other words, it was part of their operational technique. In this case, the monitoring has been required by the company as a direct result of the Clean Environment Commission. HON. J. COWAN: Yes, I think that's basically correct. We have required them to do monitoring at their cost. I don't see anything wrong with that, by the way.

I think that oftentimes you have to take that sort of initiative to do specific monitoring on specific problems. Certainly the industry that is causing the problem or has potential to cause a problem, and you're trying to prevent them from causing a problem has responsibility to participate in that. So it is a precedent in its own way. The member has raised an interesting legal point which I have not heard before as to whether or not it wou ld be self -incrimination, but cer tainly that is something that could be raised if that information was being used solely for the purposes of a prosecution.

It is my understanding that even when we have access to other monitoring units, when we enter into a prosecution that would be the only time that it would be self-incriminating. We, in fact, use our own data. Now ther e have been orders issued asking or requiring companies to do studies that cost them mone y; requiring comp anies to do studie s of the environment around their area which cost them money; requiring companies to do studies of the impact of certain reductions on their emissions and their economic feasibility which cost them money.

In fact, there is not much difference between a monitoring machine of a physical nature and a monitoring program of a non­ physical nature. Certainly there is ample precedent for companies being required to do monitoring, although it may not have included the purchase of a machine but it certainly included the expenditures of significant sums of money on other sorts of programs. That's been a requirement in the past. MR. D. ORCHARD: Could the Minister indicate if he knows the cost of that monitoring station - $50,000.00? HON. J. COWAN: In the neighbourhood of . . . MR. D. ORCHARD: Approximately $50,000.00, okay.

Could the Minister indicate why the two parts per million on an hourly-weighted average basis was chosen as a maximum emission limit in this case? HON. J. COWAN: Because it is, in fact, a level at which nuisance odours begin to impact upon residents in the area and it's a threshold limit, so we chose it for that 2719

Thursday, 12 May, 1983 reason. It's also similar to what Alberta uses and similar to what Ontario uses and those are the only two other jurisdictions, I believe, with such limits in Canada. MR. D. ORCHARD: I guess I'd have a question for the Minister, When you mention the threshold for a nuisance level, can you indeed smell two parts per million of ammonia? If you were standing in this room where there were two parts per million of ammonia, can you smell it? HON. J.

COWAN: It's indicated to me that you would be able to smell it; and secondly, it would start at that range to have some impact on sensitive individuals - individuals with respiratory diseases or with sensitive respiratory systems. MR. D.

ORCHARD: I guess that's a medical question that, indeed, probably takes a little bit of - there's a variation between people - but it's my understanding that the old administration of smelling salts, for instance, to revive a person would give you a jolt of a minimum 100 and up to 500 parts per million to revive you with, and I think that was sort of like bleeding in the old days. That was good for you; it brought you around from a stupor or whatever. Now, could the Minister indicate - he mentioned Ontario and Alberta - the standards that are presently available in those two provinces, Alberta and Ontario? HON.

J. COWAN: I'm sorry, I missed the last part of his question due to some other conversation. MR. D. ORCHARD: It was simply if the Minister could - he mentioned Ontario and Alberta - if he could indicate the standards that are in place in Alberta and Ontario. HON. J. COWAN: It's my unde rstanding that Alberta itself is two parts per million and Ontario is five parts per million per half -hour , which th en tr ansla tes, according to technical advice which has been provided to me, to two parts per million per hour. I don't know why that is.

I don't know the formulas that are used, but I did request that information of staff when we were reviewing this and they did indicate to me that five parts per million per half-hour is equal to two parts per million per hour. Ontario's is two parts per million. Just while I'm on my feet, I might add to the record. I have received a note from staff that says that other companies do, in fact, have monitoring requirements in their orders. HBM&S, lnco and Shell must report the results to us.

Now whether or not it requires them to have a machine in the order per 3e, I would have to look and see, but the fact is they must do the monitoring and, therefore, they must have machines. So there is a su btle difference there. Perhaps the order might have been worded differently to say that they must report the results of their monitoring to us which would have left mute the requirement to buy a machine in the order, but certainly in practice would have meant that a machine would have to be required. MR. D.

ORCHARD: The HB M&S, Shell and others that the Minister has mentioned, would those monitoring machines be located on their property? Because in this instance, we have got the monitoring device located some distance from the plant, as I understand it, in the residential areas. HON. J. COWAN: That would be the same, yes. It would be off-property, I'm told. MR. D. ORCHARD: Oka y, then in this case, we are requiring the installation of monitoring equipm ent outside the boundaries of the manufacturing plant itself compared to other circumstances where they are within plant boundaries. HON. J. COWAN: No. MR. D.

ORCHARD: No? HON. J. COWAN: I'm sorry. In the ones that I read out, they would be off-site. The monitoring would be off-site, so it would be similar. Now I would have to check the orders directly to see if, in fact, it makes specific reference to monitoring equip ment or to monitoring results but, as I indicated, that's a subtle difference and the impact is exactly the same. If you have to have results and report them, then you have to have equipment to obtain those results. MR. D. ORCHARD: Now the Minister has indicated that Alberta and Ontario have two parts per million as a standard.

Is that a standard enforced by the Clean Environment Commission subject to prosecution? Is this one, or is that a guideline for design, for instance, which the provinces would hope the plants could stay within? HON. J. COWAN: It's my understanding that in one jurisdiction it is a regulation, and in the other jurisdiction it is a guideline. So if it is a regulajion, it would be enforceable through normal action. J,don't know how the guideline would be enforced in another jurisdiction, or whether or not it could be enforced, but that's my understanding.

I want to be careful to say that the Ontario one is equivalent to two parts per million. MR. D. ORCHARD: Is the Ontario one the one that the Minister believes to be a standard by regulation? It's my unde rstanding that the Ontario five parts per million is a standard for design, that the design of the plant is ... HON. J. COWAN: Then Alberta would be the regulation, if that's the case. MR. D. ORCHARD: Well it's my understanding that the Alberta one is a guideline. I wonder if the Minister might be able to provide clarification on that. HON. J. COWAN: I'll have to dou ble-check and get that information. MR. D.

ORCHARD: Mr. Chairman, I think I'd like to ask the Minister - Canada's quite junior when it comes to ammonia production, even though we have a number of plants in Alberta, Ontario and the one plant in Manitoba. United States does indeed have probably 2720

Thursday, 12 May, 1983 the heaviest concentration of ammonia manufacture in the world. Does the Minister have any guidelines and emission control standards - not gu idelines, but standards in this case - that are enforced on to United States manufacturers that he has for easy reference? HON. J. COWAN: I don't have the specifics, but I can indicate to you in the rare instances where there are guidelines or regulations they are much, much higher, 48 parts per million sticks in my mind for some reason, but I couldn't be certain of that, but that's just to give you an idea of the magnitude of the difference.

They are much higher in the United States than they are in Canada - where they exist, they don't exist very often. MR. D. ORCHARD: That's my understanding as well, Mr. Chairman. The Minister has indicated that where they exist they are much higher, and that indeed is my understanding. Now that begs the question as to why we are insistent on the much tighter standard in Canada compared to the United States and if the Minister could give an indication as to wh y that's the case I'd appreciate that? HON. J.

COWAN: Probably the same reason that it's the case in Alberta or the case in Ontario, and it will most likely become the case in more ju risdictions, because that level is a level at which we believe adverse effects start to occur, whether the y be nuisance or otherwise. In this instance, they are particularly nuisance effects and you want to protect the citizenry from that level if at all possible. That's what we've attempted to do here and I think we've done it in a very reasonable way.

I discussed this matter with Simplot, and I said, "If it's two parts per million, can you reach it?" They said, "We don't know if we can reach it." I said, "Can you try?" They said, "We'll give it our best shot." I said, "Is it going to drive you from the province?" "No, it's not going to drive us from the province, as long as it's done in a reasonable way, as long as the process is undertaken in a reasonable way." They indicated to me that some of the requirements of the Clean Environment Commission order that we supported were in fact already being undertaken by them, because let me tell you if you can smell the ammonia in a residential area, you have a problem.

I don't care if it's a two parts per million or four parts per million or eight parts per million or a hundred parts per million, you have a problem. You have, in most instan ces, a nu isance problem, but a problem nonetheless. Simplot doesn't want those kinds of problems. Why would they? They don't want people phoning up all the time about fugitive emissions; they don't want people calling up my office; they don't want people calling up their office; they don't want people calling up the City of Brandon; they don't want people calling up the fire department. So they're going to seek to attain those objectives.

And we're saying that we believe those are legitimate objectives for them to attain. We've also said though, at the same time, let's take a look at it, try for it. Go for it. If you can't do it, then let's come back and talk about it. But in the meanwhile let's set that as a goal and objective and that's certainly wha t we have by way of the Clean En vironment Commission order.

It now becomes more than a goal and objective when it's in the order , but we've also said to them, look, if there's a plant shutdown or a plant start-up, or a power failure, or I think there's two other exceptions of that nature, then if it's something beyond your control then let's not impose the order under those circumstances. But if it's a matter of you not having good housekeeping practices, which you say you don't want to have occur, and we say we don't want you to have occur, then we're going to go in and talk about why the order was in fact exceed ed.

I think we've been most reasonable in this, and I think Simplot has agreed, quite frank ly, if you read their comments and I can tell you that's exactly what was said to me by Simplot when I told them of the decision. It was exactly what was said to me by the City of Brandon when I told them of the decision. They said, that's a tough order, we're going to have to work to make it, but we're going to give it our best shot and we think you've done this in a reasonable way. MR. D. ORCHARD : Mr. Chairman, I'm not arguing with the Minister in terms of the reasonableness or the unreasonableness of the order.

I guess the concern I'd like to register with the Minister is that we don't run into a situation where naturally we set a standard under a Clean Environment order, which, when exceeded, triggers a fine of - well, I guess the fine levels are minimum $500, maximum $5,000 per occurrence, and HON. J. COWAN: It doesn't automatically trigger it though. It allows for that action to be taken. MR. D. ORCHARD: I appreciate what the Minister's saying.

Just simply exceed ing the two parts per million guideline on a weighted average hourly basis does not necessarily trigger a fine, but certainly strict adherence to the Clean Environment order would allow that. HON. J. COWAN: That's right. MR. D. ORCHARD: So that fine structure is indeed there, Mr. Chairman. To date, unless something changes on the 49th parallel, there is indeed a very free and open exchange of anhydrous ammonia between manufacturers in the United States and manufacturers in Canada.

Now the produc er, shall I say, in Manitoba, is perchance from time to time under competitive forces, market forces which dictate more its viability and its economics than do the technical capability of the plant. What I am saying, Mr. Chairman, is that should there be a manuf acturer of anhydrous ammonia in the mid­ western States hooked on to lower priced gas, natural gas, or with economies of scale where it's a thousand­ tonne-per-day plant instead of a 300-ton ne-per-day plant as is the case here, that th ere could be circumstances where the economics of production are getting very very close.

I wouldn't want to see, and I know the Minister wo uldn't want to see an imposition of a Clean Environment order, and particularly in view of the fact that the Minister has indicated, and it's standard knowledge, that the manufacturers in the United States 2721

Thursday, 12 May, 1983 are not operating to these kinds of Clean Environment Commission standards, the two parts per million. The closest one that I'm aware of in the United States as a standard is 46.8 parts per million - (Interjection) - the Minister was very close, and that's in the state of Connecticut where they've set that standard and I suppose it's fairly easy for them to set a standard on ammonia emission from a manufacturing plant, because they don't have one.

I only want to register with the Minister the concern I have that we don't overly regulate the industry in Manitoba when it has to compete in an international market and must sell in a very competitive market - and the Minister seems to me to be indicating in terms of the Clean Environment Commission - that the two parts per million is recognized by all sides to be a very stringent standard, that it's tough to meet.

It seems to me that the Minister is saying that at the end of June or the end of October indeed, if the company finds that under their best operating shot - and I think we have to be fairly reasonable here - that they're going to try to make their best operating shot. Because any time you've got ammonia in the air, you haven't got anhydrous ammonia in the storage tank to sell to the custo mer. That's a direct loss and it's a direct loss in terms of a cost, I'm guessing, of $150 per tonne manufact uring costs. So no company wants to have the air flooded with anhydrous ammonia. There is no question about that.

So I am hopeful that, when the Minister indicates that this standard is tough, we're trying to make it tough enough to protect all parties, but if one of those parties, namely, the manuf acturer finds it physically impossible and presents the Minister and the Clean Environment Commission with some very valid and real reasons in terms of economics of production that they cannot come within that two parts per million, that both the Minister and the Commission would listen very intently to those arguments. Because, Mr.

Chairman, I think the last thing we want to do is ever have a circumstance where we regulate a producer out of business in Manitoba and have our prod uct brought in from Alberta where, it's my underst anding, that the two parts per million is a guideline and not subject to fine or enforcement but a guideline, or indeed from the United States where within 175 miles they can truck in ammonia from the end of a pipeline that's hooked on to 2,000 tonne-per­ day plants. That's tough competition, and we want to keep the employment in Manitoba. It uses our electricity. . It uses our labour force.

It uses our maintenance crews. It uses all of the sales personnel out of Manitoba. I think the Minister, as well as everybody in this Cham ber, is indeed concerned on both sides of the coin. We don't want a polluter to keep on existing, but indeed we don't want to add the proverbial straw to the camel's back that may indeed shut down any other industry in the Province of Manitoba that's providing very real benefits in economic and employment terms to the Province of Manitoba. HON. J. COWAN: If I can just make a few comments on those remarks.

One, I agree that if at all possible we want to maintain this industry here. I don't know if I agree if it's the last thing we want to do, to drive an industry away because of regulation. It's certainly not a preferred course of action but, if the regulation is such that it is necessary to protect society and the industry can't meet the goals and objectives, then we have a very difficult choice indeed. In this particular instance, the two parts per million is not recognized as a health hazard. It is recognized as a nuisance hazard.

It is in keeping with the other jurisdictions in Canada, the two others that have it, whether it be guidelines or design capacity objectives. The fact is, they think two parts per million is a good objective as well. The fact is that we think it's a good objective, and we want to see if Simplot can reach it. We have tried to arrange the order in such a way as to allow them an opportunity to give it their best shot and then come back and say to the Clean Environment Commission, not to me, this is what we have tried to do. This is what we accomplished.

Hopefully, they will have accomplished the two parts per million but, if they haven't, they then have an opportunity to say, this is why we didn't accomplish it. The Clean Environment Commission can take that under consideration, can make their order and it can be appealed. It can follow the whole process again. Hopeful ly, that won't be necessary, but I can agree with the member opposite that we want to do two things. We want to provide reasonable regulations, and we want to do so in a way that protects the public health.

I think with this order we have been able to do that, at the same time acknowledge that we're in somewhat of a new area here and it's going to take some time to see if in fact they can reach it. The member said that they want to reach it because, if it's in the air, it's not in the tank. If it is not in the tank, it's not part of their profits, and that's exactly true.

One has to as well realize that the total cost of this order, and I could be off by a significant amount here, but I think the comparison I'll give you will show you that in the proper context, it's not an expensive order that's going to drive them out of business. The total cost of this order is 200,000 roughly. Let's say it's 250; let's say it's 150; let's say it's 300,000, or let's even say it's half-a-million. Now I haven't heard anyone say it's half-a-million. I have heard most people say it's going to be in the area of 200,000.00.

That includes the abatement procedures, the flare system, the monitoring, the cost of hearings, everything else. That's a guess. They have just undertaken an expansion there that is a multi-million dollar expansion. Perhaps the member for the area could tell me. It's $12 million and . MR. D. ORCHARD: 33. HON. J. COWAN: $33 million. So even if it was $330,000, it would be a small percentage of $33 million. Now one wants to, you know, use those figures carefu lly because $330,000, whether it's part of a $500,000 package, or a $5 million package, or a $50 million package, it's still $330,000.00.

But in the proper context, it is not a lot of money compared to what they are doing to increase their production in the area. I've spoken to them in those terms as well. It's not a significant amount of money in comparison to that activity which they are doing to make a better product and to have a more efficient operation. 2722

Thursday, 12 May, 1983 Some of the abatement procedu res which we have discussed, by the way, will help them have a more efficient operation, cutting down on fugitive emissions from leaks, having refrigeration systems that help maintain quality over any other emissions and a number of areas that are pollutant abatement programs but also increase production. So I think that, all in all, they've shown good will in wanting to proceed with getting the emissions down to the lowest possible level. I wish them luck. I hope they will do that, because it makes my job easier.

It makes their job easier and it makes the quality of life better. Now having said all that, I want to address the issue of driving business from the province. One of the difficulties with this particular operation is, an operation went in and then residences. if I understand the situation correct ly, went up around it. There is a very strong land-conflict use there. That's what we have to avoid in the future. We have to get a bit more of a planning HON. L. EVANS: Residents were there before. HON. J.

COWAN: Residents were ther e first (I nterject ion) - however it developed, the fact is that there is a land-use conflict there. We have to avoid those in the future, because what we're saying is the emissions should not exceed two parts per million in the residential area, and that's what we would always say. If there were no residents for a mile around, then it would be very unusual for the emissions to reach, you know, two parts per million in that area. The fact is, everything is so very close here that you have difficulty.

So one of the things that we have to do in the future is make certain that we have better planning for the use of our land to avoid these sorts of conflicts. I know it's a goal that the members opposite share with us. MR. D. ORCHARD: No question, Mr. Chairman, that's a goal we always share.

As is often the case though, the capital investment and the hearing costs, etc., are a small part of the potential future cost because, if the Clean Environment Commission wished to be, let's say, exuberant, every time the two parts per hour is exceeded, there could be a minimum $500 fine and the maximum $5,000, and that can add significantly to operating costs, as I'm sure the Minister would appreciate. One more question for the Minister, if he might.

Can the Minister indicate whether the OSHA standard for workplace exposure to ammonia levels for an eight­ hour day, five days a week, for over a working lifetime is not to exceed 50 parts per million on a continuous basis and the alert level is 25 parts per million? HON. J. COWAN: I would imagine that he's reading from some documentation and I will accept his figures. I'll also say that in almost every instance environmental standards are considered to be appropriate at much lower levels than workpl ace sta nda rds. Tha t's a standard rule.

I've just gotten information that the member was right in his assumption that the two parts per million in his statement, the two parts per million in Alberta is a guideline and that Ontario's is a design regulation standard, but it should be noted that Ontario has no ammonia plants, such as Connecticut. MR. DEPUTY CHAIRMAN: The Member for Turtle Mountain. MR. B. RANSOM: Thank you, Mr. Chairman. I have a brief question for the Minister. I'm sure he knows what it's about and I'll briefly describe it for the record.

There is a wading pool situated on a river a mile and a-half or two out of Cartwright that was built by the Kinsmen in the area. There is a regulation in place, which I believe our government put in place, that requires that this wading pool have, I believe, it's a six-foot fence around it. It's probably measured in meters now, but it's roughly a six-foot fence and that there be an attendant full-time.

The pool is located within perhaps 15 yards of the river, and the situation of course is that people may be exposed to the natural hazard of the river and it's not necessary to have it fenced or to have anyone present. Small children could only get to this area by having adults take them there and presumably they could easily be present, as well, to oversee them while they're the re. The situation is that if this fence doesn't go up and if the attendant isn't hired, then the wading pool is going to be shut down. I think the situation has reached an impasse.

I've brought it to the attention of the Minister and I'm wondering if the Minister sees any way through this problem, which seems to defy a bit of common sense, when one confronts it face to face. HON. J. COWAN: Well, I will agree with the Member for Turtle Mountain that it is a problem; that in fact in isolation does defy what one would term common sense. I'm having a real difficulty with it since the member has brought it to my attention. Perhaps I can explain to him the dilemma. Firstly, there is no provision in the regulation for an exception; that's the first dilemma.

However, that can be overcome by amending the regulation. The real dilemma is, let us say, that we remove the requirement for the attendant. I'm not so certain that you should remove the requirement for the fence, because a wading pool does have a certain public attractiveness around it that the river might not. In other words, a young person, a young child would figure they could handle the wading pool, but maybe not handle the river, so they wouldn't go near the river but they might go in the wading pool.

They might fall down, they might hit their head on the con crete and that's part of the problem, and then we would have a fatality. We would have an inquest, which I'm certain would censure everyone, myself included, and everyone who promoted the fact that there shouldn't be a fence the re. So I think there's probably recognition that there should be a fence and that it should be posted. I've discussed this with staff and we're still discussing it as to whether or not there should be an attendant.

They are of the opinion that from their experience the attendants do provide a service and they're probably right; the attendants do tend to prevent accidental drownings and they're probably right there as well. The real difficulty though is if you have the attendant there, you're not going to have the wading pool, because 2723

Thursday, 12 May, 1983 as the member indicated, the wading pool is going to be shut down. So what you're going to have is any young children there being forced to take the second alternative, which I would think and I don't know the area. but I'd ask the member - I would think the river is probably more dangerous for young children than is a wading pool. So if you have the wading pool shut down, you're forcing children into a more dangerous situation.

By the way, if you have the fence around there and the children get out there without their parents and can't get access inside, you're still forcing them into the river and that's a problem as well. So there is a dilemma and it's one which I have given a lot of consideration to in respect to how to solve it. Quite honestly, I tend to agree with you that the regulation doesn't make a hell of a lot of sense when it comes to that sort of a situation. On the other hand, what if we were to amend the regul€1tiOn so as to provide for an exception, had that exception put in place, and we had a fatality there?

I mean, did we make the right decision? It's one of those things that tests all of us to come up with creative and innovative solutions. I just haven't done that yet, but what I would ask the memb er, because he's more familiar with the area and the situation, is if there was a requirement for a fence. which would have a gate and a latch higher than a child could use without assistance from an adult, and it was posted clearly that any children in there would have to be under parental supervision, would that satisfy some of the difficulties that he sees being imposed by this particular regulation? MR. B.

RANSOM: Mr. Chairman, it might satisfy it. I've certainly inquired as to whether that would be the case or not. I just stress once again that this is an area that is a mile and-a-half or more from the town. So a small child is extremely unlikely to find their way to this pool without having someone. an older, more responsible person having transported them to the site. This is not in town. It's not like a pool in a playground someplace, so I think that's a fact that has to be considered. I would say, as a member of the opposition, it's perhaps not that easy for the Minister to say so.

I think that we go overboard in trying to protect people from all event ualities. No one wants to see an accident happen, of course, but there finally has to be a limit to where common sense has been exceeded to the point where everybody has to say, stop, this has just gone too far.

I'm sure you could take 100 people through that area, show them the river, and show them the wading pool . and explain the situation to them and I'm sure that almost to a person, they would say that this is regulation "gone wild." So all I can say is I hope that there's some kind of reasonable solution that can be worked out in this case. HON. J. COWAN: I agree with the member opposite that regulations, when they're developed and imposed in such a way as to cover all circumstances within allowances for except ions, where those exceptions are warranted, can create difficulties like this.

I just asked them why they didn't have a clause in there that would provide for an excep tion, but that's neither here nor there at this point because if it's necessary it can be put in by way of amendment. But the real difficulty is there are two hazards here. That's a real difficulty. You know, if it was a wading pool 1.5 miles or 1 mile down the road where there was no water nearby, then it would be a somewhat different circumstance than a wading pool where there is water nearby, because what you have is two attractive hazards.

You can force an individual to use one of those, what I think is more hazardous attractions by imposing the regulation and in that way the regulation doesn't make sense because it's working at counter-purp oses to its intended purpose of protection. In other words, if you fence the area off and have to have an attendant there, or fence the area off and not even have an attendant there, you may be forcing people into the river when they would be much better off in the wading pool.

If you have to have an attendant there and he closed down the wading pool, then you certainly are forcing people into the river when they might be better off in the wading pool. So it's a situation that is complex. It's one which I wish to indicate to the Member for Turtle Mountain is still unde r active consider ation. I've ha d some recommen da tions. I want to review th ose recommendations and attempt to find a solution to it which will solve a problem which we both acknowledge exists. MR. DEPUTY CHAIRMAN: The Member for Tuxedo. MR. G. FILMON: Thank you, Mr. Chairman.

As I indicated, prior to our adjournment for Private Members' Hour, there was another area that I wanted to explore to some extent with the Minister that has to do with his new permit system for mosquito control. I wonder if the Minister can indicate how he expects this system to work in terms of timing analysis, evaluation by the authority and so on, so that we have some idea as to the responsiveness, shall we say, of the permit granting process to a need should it arise? HON. J. COWAN: Well, perhaps I can give you the broad parameters. We'll have to discuss the detail another time for this reason.

As you are aware we have struck a committee comprised of representatives of the Department of Agriculture, the Department of Health, and the Department of Environment Workplace Safety and Health, which are what I believe to be the three main components within the government system, the thr ee major interest dep artments within the government system. On that committee as well will be representatives of the university. They will be there to provide technical and professional advice. We are working through the Gov ernment Un iversity Liaison Program to get a representative.

As well we've asked for a representative from the Union of Ma nitoba Mun icipalities and from the Asso ciation of Ru ral Mun icipalities to sit on that comm ittee. We are going to ask the committee to make recommendations for the permit system. So the final details of the permit system will in the large part rely upon the recommendations of that comm ittee. It has been struck so as to allow for the most responsive and efficient permit system. We've tried to get all the p"lrties, all the key actors involved to sit 2724

Thursday, 12 May, 1983 down and hopefully by way of consensus come forward with a permit system. But we are giving them some general direction. The one direction is that we believe larviciding should be key, if not a prerequisite, and we're not saying that it must be a prerequisite at this point, we want them to review that. But we're making a very strong statement in respect to larviciding; we believe that larviciding is a key component. We have just announced as a government that we will be sp ending several $100,0 00 to assist municipalities this year in two ways.

The municipalities that already have larviciding programs ongoing will be asked if they want to have some of that money to be used towards staff to assist and to expand with larviciding programs. That's about four, or five, or six municipalities, seven municipalities in the province that have larviciding programs ongoing from Winnipeg to Pinawa; there's Brandon, Gillam, and a number of other commun ities spread out through the province.

We're also offering assistance, monetary and financial assistance, to them to map mosquito breeding grounds, because the larviciding program is not really going to be efficient unless you can, in fact, get the grounds mapped so that you can go in in a very efficient way, and a continual way, and spray those areas that need spraying, but as well get rid of those breeding areas that can be gotten rid of, such as old tires, and containers that collect water. So we've gone beyond the strong statement which I indicated in thi