THE LEGISLATIVE ASSEMBLY OF MANITOBA 2:30 o'clock, Friday, April 26th, 1963. Opening Prayer by Madam Speaker. HON. DUFF ROBLIN (Premier) (Wolseley): Madam Speaker, before you enter on the pro­ ceedings of the day, I wonder if I might have leave. of the House to make my Budget Statement at this particular time and after that has been made then we can proceed with the regular order of business on the Order Paper. If there is no objection from any members of the House, I will take it that leave is granted and I will proceed with the Budget Statement. A MEMBER: We might need a prayer after. MR .

ROBLIN: Well, we need prayers before and after. MR . GILDAS MOLGAT (Leader of the Opposition) (Ste.Rose): Madam Speaker, I would like to inquire, it will be the intention then to proceed with routine proceedings, I presume? MR. ROBLIN: It will be the intention to start right at the beginning and work our way through. BUDGET SPEECH Madam Speaker: For the fifth time, it is my privilege to move consideration of the requirements of Her Majesty's Government in Manitoba for another fiscal year.

I propose to consider at once Manitoba's economic situation as a background to our pol­ icies and programmes for the new fiscal year, the first of this new Legislature. The recently completed report of the Committee on Manitoba's Economic Future gives added significance to this review at this time. The Budget will refle�t the continuing application of the policies ex­ pressed in our programmesto meet the current and anticipated needs of our economy and of our people.

The Economy The new strength of the economy in 1962 was attributable in substantial part to the good results in agriculture in this Province and elsewhere, and a brief review of the highlights of the agricultural record over the past year will serve to emphasize this. In contrast to the drought·in 1961, weather conditions were favourable overall and con­ tributed to the achievement of the largest aggregate harvest on record. Livestock production was somewhat lower after the unusually large marketings which resulted from the feed shortage in 1961, but prices now have partly off-set these quantity reductions.

The net value of agri­ cultural production in 1962 is now estimated at $300 million - the highest level ever recorded for the Province. The renewal of strength is clearly reflected in the fact that the net value of output per farm rose from $4,800 in 1961 to over $7,000 in 1962. Production in grain crops alone rose from 72 millions in 1961 to a new record of over 200 million bushels last year. Crop conditions, however, were not uniformly favourable throughout the Province.

Sev­ ere hail storms in a limited area of south-western Manitoba and excessive moisture in the Red River Va lley and in a substantial area west and north of Winnipeg affected harvests. Fortun­ ately, many farmers in some of these areas had availed themselves of crop insurance which proved its worth in aiding the affected farmers to maintain their economic position. This year, the crop insurance programme will be extended to add an additional test area and thus insurance coverage will be available to about 30 percent of the farmers of the Province.

In total, more than $9 million in coverage was provided in 1962 to some 4, 400 farmers. Our programmes of investment in agricultural research are proving their value for the farmer and for the economy generally. We will be providing, in the year ahead, over $1 mil­ mion in further support for specific research projects and facilities at the University. We will also be initiating a soil and feed testing service at the University of Manitoba which will help farmers increase efficiency. Since its inception, we have committed over $18 million in credit for farm enterprise through the Agricultural Credit Corporation.

Loan repayment experience to date shows that 98 .1 percent of outstanding ·credit has been repaid on time and that less than 2 percent of repay­ ments are in arrears, with the majority of the late payments outstanding for less than six months. This favourable record is particularly significant when one considers the extreme drought conditions that prevailed in 1961. The excellent repayment experience. is solid evidence April 26th, 1963 Page 1669

i� £ "" 0 .6" ., .... .... � , 1-' CD "' C.:> MANITOBA. AGRICULTURAL PRCDIDTION, 1.950 - 1962 Year 1950 1951 1952 1953 1954 1955 1956 1957 1.958 1959 1960 1961 1962- �esate Production ($000) 326,971. 350,650 364,191 283,903 249,520 264,.396 3ll,817 259,71.9 322,694 323,247 315,300 .262,969 378,000 * All owance made f'or seed and teed grain used on the f'arm. - Estimated.; Source: Department of' AgricUlture Total ($000) 240,875 280,428 269,481 227,969 215,518 220,790 252,589 238,416 266,359 263,506 256,024 202,120 300,000 Net Production* Average per Farm ($) 4,588 5,.39.3 5,182 4,384 4,1.44 4,246. 5,1.55 4:,982 5,701 5,781 5,761 4,800 7,ll6

� 2: s; ? ,_. "' Cl> c.> "d I» � ,_. Cl> "" ,_. � MANUFACTURING LV CONSTRUCTION LV AGRICULTURE j OTHER RESOURCES .. � . <V ., �� 1 .... ., ' MANITOBA•s .PROVINCIAL OUTPUT GR OSS VALUE IN MILLIO NS OF DOLLARS FOR THE YEARS �" � I "0 "' ,o,' 1950-1962 ITMH '\�q, a,• � m ttifJI tti<lldl ,.,<>"' "'"'"' .,., 1958 1959 "'"' "' .. � H-i'}� '\"?� fl:l(l!llll.,.' 1960 ,,., a,' �0 ........... �. "\ ,, 'V � 1961 1962 11') Q:: "{ -...! -...! C) � l,... C) 11') � C) ...... -...! -...! �

"d � .... "' """ t-:1 > '0 '1 .... ...... t-:1 "' p .... "' "' c.> Year 1950 1951 1952 195.3 1954 1955 1956 1957 1958 1959 196o 1961 1962* * Estimated Source: MANITOBA •S PROVINCIAL OUTPUT GROSS VALUE (Millions of Dollars) M9.nufacturing Construction Agriculture 486 155 327 551 183 351 574 199 364 585 246 284 571 241 250 588 257 264 647 304 312 665 327 260 694 .345 322 742 398 323 738 397 .315 770 .382 263 823 406 378 Department of Agriculture Department of Mines & Natural Resources Department of Industry & CoDll!lerce f-- other Resources Total. 76 1,044 80 i,l6S . 78 1,215 73 1,188 84 1,146 117 1,226 118 1�.381 121 1,373 85 1,446 86 1,549 91 1,541 132 1,547 185 1,792

(Mr. Robliif, cont'd) ..• of the soundness of our investment in the enterprise and initiative of those Manitobans engaged in the business of agriculture . This credit programme will be broad­ ened to provide intermediate term credit to the producers of beef cattle. Farmers will be able to borrow up to $10, 000 for a period of up to ten years on the basis of chattel mortgages on beef herds, for the purpose of expanding their beef enterprises.

Farmers will thus obtain a source of credit to put their beef cattle enterprise.s on a sound footing and over the long term, the livestock industry offers one of the best opportunities for the expansion of agricultural income. The Agricultural Rehabilitation and Development programme is moving forward. A gen­ eral agreement has been signed with the Government of Canada and sub-agreements on several projects are being undertaken under the various sections of the Act.

A great deal of key plan­ ning and preparatory work has been underway this past year to provide the base from which the programme will move ahead over the coming months. Funds will be committed for the imple­ mentation of several projects of related research, land use and water control. We believe that in this programme there is great promise for the re-organization, on a voluntary basis, of low income agricultural areas so that they may offer a better living to their inhabitants.

In conjunction with these ARDA programmes and as a part of the policy to increase cattle production, the Provincial and Federal Governments are co-operating in the establishment of six new community pastures. It is worth noting that these projects represent a 50 percent increase in the number of community pastures in. Manitoba. Manitoba business moved forward in key sectors in 1962 and the year established a record for our Province in terms of overall economic results. The gross provincial income -repres­ enting our share of the gross national output value -reached an estimated $2 billion in 1962.

Manitoba not only shared substantially in the. buoyant national trends last year, but had the satisfaction of having resisted previously -with marked success -the extremes of lagging trends evident elsewhere. After coming through the difficulties of drought and crop losses in 1961, still clearly in possession of for·.vard initiative in our increasingly diversified provincial economy, we have endeavoured to make the most of our opportunities to further our expansion and development over the past year. Aggregate personal incomes in Manitoba in 1962 , at well over $1.4 billion, have never been so high.

Labour income in Manitoba in 1962 neared the $950 million mark as earnings reached another record. Underlying this new level of earnings was the fact that for the full year 1962 our provincial wor:k force of 334,000 persons, on average, was about 96 percent employed over the twelve months as compared to an average of 94 percent employment for Canada over the period. In fact, employment in Manitoba reached a record level through the upper swing of the annual cycle which lasted from the middle of May to the peak of harvest in October.

During this five month period, the average on-the-job experience in this Province was some 98 percent of the work force -or virtually full employment. The long range problems of accelerating expansion of employment opportunities remain. While our more favourable experience in the Province is to be greatly appreciated, there are problems which cannot be ignored. The sustained growth of greater numbers of new job pos­ sibilities is the vital objective that we must achieve.

Many of the suggestions contained in the Report of the Committee on Manitoba's Economic Future should provide useful guides to such potential development. Overall retail sales for 1962 totalled to a new high of $859 million. New strength was also evident in the manufacturing sector. In the twelve months ending with December of last year, Manitoba manufacturers recorded shipments valued at more than $820 million for an increase in manufacturing output over 1961 of over $50 million.

These gross earnings by processors and producers give increasing support to the earning capacity of our work force and this in turn does much to ensure the continued strength of Manitoba's consumer market ­ so essential in the overall provincial economic strength. The importance of that market is given added significance by the pattern of our indust­ rial diversification, emphasizing as it does the specialized industry, the service enterprise and the relation of many processors to primary food production.

Clearly revealed is our need to find our future strength in increasing diversification and growth among these secondary processors, and most particularly in the development of service and new-product enterprise. April 26th, 1963 Page 1673

i ......

CD "" "" .6> � � fl' ...... <0 CD C.:> _COl•IPARISON OF YIANITOBA.1S ESTIMATED GRCSS PROVINCIAL INCOME AND GRCBS NATIONAL PRODOCT . (Millions of Dollars ) --- J.anito'ta"ts Estimated % Increase Gross National -i-I;-crea�.;--�-- Year Gross Provincial Income Over Previous Year Product Over Previous Year 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962* * Projected • 1,016 1,164 1,259 1,255 1,252 1,384 1,560 1,564 1,678 1,774 1,832 1,805 2,000 Source: Treasury DeJBrtment. 8.3 14.6 8.2 - 0.3 - 0.2 10.5 12.7 0.3 . 7.3 5.7 3.3 -· 1.5 + 10.8 18,203 11.3 21,474 18.0 -23,255 8.3 24,473 5.2 24,871 1.6 27,132 9.1 30,585 12.7 31,909 4.3 32,894 3.1 34,915 6.1 36,254 3.8 37,421 3.2 40,401 8.0

VARIOUS ECONOMIC INDICATORS OF MANITOBA'S DEVELOPMENT > 0 'tl (Millions of Dollars) 'i .... ..... "" "' .F .....

Cheques "' "' Sales of cashed In C.:> Personal Percent l.<lbour Percent Retail Percent Life Percent Clearing Percent Year Income Change Income Change Sales Change Insurance Change House Change Centres 1950 755 + 4.1 437 + 6.6 567 + 8.4 66 - 4.8 9,115 + 6.9 1951 881 + 16.7 499 + 14.2 610 + 7.6 79 + 20.7 10,551 + 15.8 1952 934 + 6.0 551 + 10.4 651 + 6.7 87 + 9.5 11,690 + 10.8 1953 943 + 1.0 600 + 8.9 677 + 4.0 96 + ll.O 12,259 + 4.9 1954 927 - 1.7 604 + 0.7 637 - 5.9 100 + 4.4 11,602 - 5.4 1955 999 + 7.8 635 + 5.1 669 + 5.1 114 + 13.2 11,486 - 1.0 1956 1,126 + 12.7 700 + 10.2 700 + 4.6 142 + 24.5 13,971 + 21.6 1957 1,132 + 0.5 738 + 5.4 726 + 3.7 174 + 23.0 13,641 - 2.4 1958 1,262 . + 11.5 771 + 4.5 754 + 3.8 188 + 8.2 15,861 + 16 • .3 1959 1,324 + 4.9 829 + 7.5 813 + 7.9 191 + 1.6 17,158 + 8.2 1960 1,.375 + 3.8 874 + 5.4 84.3 + .3.6 198 + .3.2 19,081 + 11.2 1961 1,361 - 1.0 902 + 3.2 818 - 2.9 188 - 4.9 21,131 + 10.7 . 1962* 1,460 + 7.3 "d 945 + 4.8 859 + 5.0 .192 + 2.1 21,191 + 0.3 11> gq (I) * Est:lDated or Preliminary .....

"' "'I Source: Department of Dldustry and Commerce C11

(Mt: Robltn,·, cont'd). ... ---T The general upward swing of the economy throughout 1962 was to be noted in a number of other key indicators. Investment in new plants and equipment and repair expenditures showed a firmer trend in total than for some years past. Our preliminary estimates of overall new capital investment and repair and replacement expenditure in Manitoba during 196fl show a cumulative total of $613 million -up from the $5 85 million overall capital outlays and commit­ ments in. 1961.

Of the $613 million estimated total capital expenditure in 1962, new capital commitment accounted for $442 million - some $25 million-above the 1961 estimate with the private sector sharing some of this increase. Major capital growth stimulus in the Province ·still stems from public investment in such facilities, particularly those under development by Manitoba Hydro, the Manitoba Telephone System, the Greater Winnipeg Floodway, and in other public asset development.

New manufacturing investment in 1962 was still below the desirable level of participation in t� growth of our economy, although the preliminary forecasts for 1963 are indicative of a trend toward higher annual commitments. Since its inception, .the Manitoba Developme nt Fund has aided more than 100 individuals, firms and community development corporations in their efforts to realize more fully the opportunities available for sound growth in Manitoba:.

Actual loans from the Fund to date - more than $8 million with some 70 percent outside Metropolitan Winnipeg - have supported the creation of better than 1,200 new employment opportunities in the Province. The private enterprise partners in this expansion have approximately matched this commitment and the total of $15.8 million in new co-operative investment made possible by the Manitoba Development Fund operations over the past four years has resulted in an est­ imated additional factory output of over $19 million annually.

Another $600,000 per annum in new tourist revenue has been made possible through the Development Fund. The significance of this is emphasized when we consider the increasing contribution that tourism now makes to our economy - nearly $40 million annually and I might say that here again is another provincial record. Our ability to absorb new workers into the productive labour force of the Province will depend largely on our ability to increase the strength of our general economy through the wider development of new markets.

Even successive agricultur!ll harvests of the magnitude of 1962 or expansion in provincial incomes and output generally at the levels of growth enjoyed recently will not likely meet our need to provide growing numbers of our people with employment. We must realize that even service and specialized enterprise is today increasingly more dependent on capital and less on labour. To develop new jobs we wi ll require growth as well as special­ ization and diversification. The maximum in selective new capital investment by the private sector is now most necessary.

When we look at the magnitude of the task before us in the light of Manitoba's already considerable accomplishments, we can clearly understand and appreciate that this is no time either for complacency or for "resting on our oars". ( In 1962, the major construction projects brought underway included a beginning on the $63 million Red River Floodway - larger by 30 percent than the combined dredging and excav­ ation of the St. Lawrence Seaway project. Two excavation contracts for the Floodway were awarded in the fall and better than anticipated progress was made up to the end of the year.

Contracts for the construction of related highway and railway bridges in connection with this project, and for the outlet structure, were awarded and' construction is commencing. Surveys have been underway during the year for both. the Assiniboine diversion at Portage la Prairie and for the Shellmouth reservoir, and this work will proceed in the 1963-64 fiscal period. The Manitoba Water supply Board initiated projects during the year to serve six more towns and villages.

Water supply and treatment works for the town of Deloraine and for the villages of Erickson, Cartwright and Holland were started and completed during the year, Construction is still proceeding in the villages of Reston and Hamiota. This important utility plays a key role in modernizing vital services in many of our smaller centres. The 1962 output of electrical energy in Manitoba reached a record 4.4 million K. W.H. , of firm energy. Last year, the value of electrical energy consumed in Manitoba alone reached an estimated $42.6 million - up over the $39 million total for 1961.

The creation of new gen­ erating capacity requiring the investment of $127 million is well advanced at Grand Rapids - · progress there during the year indicated initial operations of the facilities will be commenced late next year and that the entire project will be completed in 1965-66. Detailed considerations Page 1676. April 26th, 1963

> ESTDIATED GRCSS VALUE OF SHIFMENTS 't:l FOR MANITOBA MANUFACTURERS '1 .... ..... "" 0> BY INDUSTRIAL GROUPS F' (Thousaoos of Dollars) .....

"' 0> t.> Industrial Group 1959 1960 1961* 1962* Food & Beverages 298,291 289,134 304,331 325,000 T�ilqs 9,434 9,898 10,023 11, 000 Clothing 48,283 48,892 50,080 53,000 Knitting Mills 1,126 1,491 1,541 2,000 Leather Products 5,939 5,509 5,393 6,000 Wood Products 10,328 9,859 10,010 11,000 Furniture & Fixtures 22,674 22,073 23,114 25,000 Paper & Allied Products 41,045 39,262 39,293 42,000 Printing, Publishing & Allied Industries 38,474 39,267 41,605 44,000 Primary Metal Products 28,004 25,902 26,906 29,000 Non�tallic Mineral Products 28,281 26,452 27,026 29,000 Metal Fabricating 52,623 58,385 61,637 66, 000 M:l.chinery 14,769 16,874 17,720 19,000 Transportation Equipment 55,614 54,110 54,804 58,000 Petroleum & Coal Products 49,710 51,993 54,600 58,000 Chemicals & Chemical Products 15,340 15,64 3 16,180 17,000 Electrical Products 13,108 12,216 13,148 14,000 Miscellaneous Manufacturers 9,140 11,497 13,04 8 14,000 TOTAL: 742,183 738,457 770,459 823,000 '0 ll> * Estimated. gq (1) ....

Source: Department of Industry & Commerce. 0> "'I "'I

� � ..... CD """ 00 .6> :l . ..... � p ..... "' CD <:.:> ELECTRIC POWER AVAILABLE IN MANITOBA FOR SELECTED YEARS r 4400 4200. 4ooo 3800 3600 3400 3200 30 00 !!> 2800 � � 2600 2400 2200 2000 I � � � 8 ;;.: I,_ c:. 1800 V, 1600 � -.J -.J � 1400 1200 1000 800 600 400 200 � LJIIJ lllJIIIl LlJIIJ UI1JII LJjJJ UIIIIIJ LJIIJ Ulllll Ulll lJD?_j 0 '"'"'" ono� 1926 1936 1946 1956 onrn onrn ''"'�'"' ·-�' ·---

Year 1906 1916 1926 1936 1946 1956 1957 1958 1959 * 1960* 1961* 1962* ELECTRIC POWER AVAILABLE IN MANITOBA FOR SELECTED !EARS Kilowatt-Hours (Thousands) 10,936 210,840 616,551 1,320,019 1,9.39,405 3,369,836 3,373,973 3,104 ,264 3,237,431 .3,480,965 4,046,214 4,361,646 Average Net Value (Thousands of Dollars) 2,108 3,823 6,r:Y72 12,606 28,307 29,016 26,697 31,097 35,425 39,068 42,600 * Source: Manitoba Hydro-Electric Board. Previous years' data from Department of Mines & Natural Resources. Figures for 1959 and subsequent years have been revised to accord with up­ dated statistical series of electric power availability. April 26th, 1963 Page 1679

{Mr: Roblin, cont'

d) of the tremendous power potential of .the Nelson River began during 1962; marking a further commitment to the future for Manitoba and for Canada as a nation. In this reference, again, the emphasis is on the special role to be filled by this Province . . In a national economy dependent upon abundant power at low economic cost, Manitoba's supply of untapped potential energy is a key to yet unrealized new contributions by our Province to the national development, as well as tO our own. · The telephone utility .also recorded another outstanding year of expanded service and development.

In 1962, the Manitoba Telephone System added nearly 13, 000 new customer fustallations and made capital investments and extension of existing services. \Ve have now passed the 300, OOOlevel for in-service telephones and our service equipment, facilities and organization have been kept to a maximum efficiency. There were more than 332, 000 motor vehicles registered in 1962. That total reflects an avE1rage annual growth rate in vehicles registered since 1958 of better than 15,000 in every registration year.

The nearly $40 million in tourist business now being realized annually in Manitoba can, in major part, be directly r�la:ted to the improvement and extension of highways and roads to areas most attractive to resort development.

There can be no question that the $29 million Provincial Government investment in 1962-63 in construction, reconstruction and maintenance of Provincial Trunk highways and other Highways, the Roads to Resources and other routes, represented a direct support for tourist trade expansion, new resource develop­ ment, greater industrial decentralization and the general diversified growth in overall prov- incial economic activity. · The Roads to Resources programme was the means by which four more northern centres were connected to the Provincial road system in 1962.

Snow Lake, Chisel Lake, Osborne Lake and Wekusko were joined to the Provincial network by all-weather gravel surface during the year. Work which has proceeded throughout the winter, and the construction programme which has been accelerated, will bring Thompson into the Provincial highway system within a rel­ atively short time. Better than 300 miles of work has been completed since 1959 on access roads to connect various centres located within five miles of a Provincial highway.· Since the inception of the access road programme in 1959, there has been a marked strengthening of many of our local communities.

All Manitobans benefit fr_om the greater ease of travel and communication thus provided. The improvement in our highways and the reduction of road hazards brought about by the upgrading of construction over the past four years has contributed substantially to greater safety for road users. Since 1958, the fatal accident rate per 100 million miles driven in Manitoba has been reduced by better than 28 percent and is consistently below the national average, as reported by the Dominion Bureau of Statistics.

In spite of the 23 percent increase in motor vehicle registrations over the period, there has been no increase in the general accident rate in Manitoba and in 1962 the rate of miscellaneous accidents per 1, 000 vehicles on the road actually showed a slight decline. That this increasing use of our highways has continued without increase in the rate of loss and damage is in major part a result of the emphasis on safety in our highway policy and in the vigourous programmes of driver training.

In all, development of the Provincial highways, and in the use of those highways, we shall maintain the twin factors of safety and efficiency to ensure true economy in our modern trans­ portation policy. We expect that for 1963-64, that additional Provincial investment of .some $32.8 million will be committed to sustained progress for Manitoba's highways and other roads for construct­ ion, improvement and maintenance. In 1962-63 we invested some $4.7 million in new or renovation.work to provide accommo­ dation-for technical education, health, reform and rehabilitation, recreation and other public services.

In 1963-64 the programme calls for $5.7 million to continue our policy of efficient and economical provision of these public facilities. In mineral production, the full year of operations at the nickel complex of Thompson was the major contributor to a 60 percent increase in the value of our total mineral output. From a total of just over $100 million in 1961, last year we recorded a total mineral production valued at $159 million. The Stall Lake Mine, near Snow Lake, is expected to commence pro­ duction before the end of 1963. This past year of growth - the best in the history of our Page 1680 April 26th, 1963

.6" !1 ..... "" "' p. 1-' "' "' c.o 'tl � CD 1-' "' 00 1-' MANITOBA'S PRIMARY RESOURCE OUTPUT Agriculture Minerals Forest Products Furs Fisheries Resource Output * Preliminary Figures. PRODtx:TION VALUE ('ftlousands ot Dollars) 1958 1959 322,6 94 323 , 247 57,066 55,5 0 7 17, 000 19,000 5, 366 5,0 59 5, 935 6, 254 -- 408 ,0 61 409 ,0 67 Source: . Department ot Mines and Natural �sources. Department ot Agriculture. 1960 315,300 58,703 20,000 5,439 6,5 07 405,949 1961 1962* 262,96 9 378,000 101 ,489 159,000 20,000 15,3 50 4,637 4,786 5,9 05 5,663 - 395 ,0 00 562 ,7 99

(Mr. Roblin, cont'd) ••. resources development -means that the soundness of northern invest­ ment programmes, both public and private, over the past few years is confirmed. Exploration for future development has now been extended to areas which previously received little attention. Oil prospecting was carried out in the unexplored area on the shore oLthe Hudson Bay. The Department of Mines and Natural Resources placed six geological crews in Precambrian areas during the 1962 field season.

These parties were engaged in the geological mapping of areas near Cross Lake, Knee Lake, Thompson and south of Southern Indian Lake. The Geological Survey of Canada also conducted two reconnaissance geological surveys and several ground water surveys in Manitoba. The geological parties were in the areas north of Lake Winnipeg and northwest of Churchill. The first year's work under a three­ year agreement with the Federal Government, in respect of a joint aeromagnetic survey, has been completed. This programme will continue in the Precambrian areas in Northern Manitoba.

Our work toward upgrading the economic status of our forest industry continues. Unlike the previous year of drought and high forest hazards, the planting season in 1962 was favourable for reforestation and some 2, 000 000 trees were planted on Crown lands while a further quarter million were made available for private planting in farm shelter belts, farm wood lots and tree farms. Development of forest management plans continued and included the Riverton management unit of 746 square miles. Field survey work was completed on 295 square miles in the flodgson, Duck Mountain and Turtle Mountain areas.

The trend in outdoor recreation continued upward during the yea.r, notwithstanding that there were from this standpoint rather unpleasant weather conditions which prevailed throughout much of the summer season. There was some general improvement in the fi_shing industry as more emphasis was placed on quality and as a result a generally higher price level tended to prevail. A programme is presently being developed to assist rough fish processing to provide a valua,ble source of animal food and supply a market for less valuable species of fish now being wasted in the industry.

Human Resources The reason for emphasis on economic progress has to be expressed in human terms. Better, happier, healthier lives depend in major part upon the capacity of society to provide full opportunity for development. Government activities in this regard constitute basic support for the creation and expansion of human opportunity. To provide" the necessary education and training of our young people and to meet the increasingly specialized requirements of our workers for knowledge and skills the Province has continued a major effort in the field of education.

In 1963-64 direct general grants to school boards, estimated at $28.5 million is almost double the annual aid to schools since l958-59 when the grants totaled $14.6 million. Increased enrolment at the elementary and secondary level are evidence of an expanding educational system, with the increase at the secondary level being the most marked. In the four years of operation of the division plan, the total enrolment in secondary schools in Manitoba has increased from 33, 77 4 to 48, 952 or by 45 percent.

In Grade XII alone, there was an in­ crease in enrolment outside of Metro Winnipeg of 122 percent between June of 1958 and October of 1962. Since 1958-59, more than 3,200 classrooms and classroom equivalents have been com­ pleted, representing 267 new buildings and additions. The value of new construction in 1962-63 alone approximated $8 million, and for the period the total investment in buildings was $54.6 million. · Our growing investment in vocational and technical training facilities reached $7. 9 million last year, with major commitments in the technical training field.

The increasing interest in technical and vocational education is evidenced by a new high in enrolment - some 4,200 students were registered in the fall of 1962. The new $5 million Manitoba Institute of Tech­ nology is nearing completion and it will be possible to make use of that part of the building designated for trade training at an early date. Classes in the various technologies will com­ mence in September of 1963, as scheduled.

In addition to the new Institute of Technology, it is planned to provide two additional vocational schools - one at The Pas and the other at Brandon • These schools will more adequately meet the need for additional technical education in the northern and western sections of our Province. Page 1682 April 26th, 1963

(Mr. Roblin, cont'd) •.. Again this year the institutions providing higher learning will receive assistance with both their capital and current programmes. In 1962-63, more than $8 million in operating and capital assistance was made available to the University and the affiliated colleges. For 1963-64 we estimate another $9.4 million in such aid will be extended. This financial support will facilitate the construction or completion of new residences, libraries, arts, science and medical facilities as well as other University purposes.

Emphasis is being placed on an educational programme designed to meet the varying needs and abilities of our population. The overall expenditure in Education - approximately $43.9 million estimated on current and capital account in 1963-64 - is perhaps the key invest­ ment in the Province's whole development programme. We know that the realization of our best hopes and plans for the future must ultimately depend upon the capacity of our young people to take advantage of the opportunities being developed in the Province. Our social services continue to show a judicious expansion.

A new multi-service agency is being established in co-operation with social agencies in Greater Winnipeg to bring together various rehabilitation and social services concern.ed with the human and financial problems being eiqlerienced by welfare recipients, particuiarly in respect of the able-bodied in the Salter-Jarvis area of Winnipeg. In addition, a pilot project will apply a Community Develop­ ment approach to this redevelopment area to complement the urban renewal and redevelopment projects now underway.

A new Provincial low-cost housing plan will assist undertakings in this field in the City of Winnipe g and other municipalities. The Community Development pro­ gramme for the Indians and Metis is now firmly established in key areas, and will be extended and improved in the coming year. In comparison to the approximate $8.5 million social wel­ fare commitment in 1958-59, we are providing $18.3 million in current and capital account in 1963-64 - some $10 million more annually for tb.ese programmes.

The primary role of Government in the health field involves prevention, detection, b.os­ pital care and rehabilitation, in both the general and mental health sectors. These are aspects of health services which the individual either cannot organize or arrange for himself or for which he requires material assistance. In this regard, the Government acts as a co-ordinator to ensure proper integration and balance in community healtb. efforts. Break-througb.s in concepts related to mental health have been reflected in our support for psychiatric services as these are expanded to meet new requirements.

In 1963-64, we will be providing some $6.6 million for this purpose - almost double the 1958-59 support given to psychiatric services. Part of this effort, emphasizing the preventative aspects of mental health care, is the Community Mental Health programme. Tb.rough increased staff, resources and service for the support of discharged patients in the home and community environment, we can hope to ensure more effectively the ultimate success of our wider programmes of mental health care.

A new $750,000 clinical unit at Selkirk, to be completed in the near future, includes a large out-patient department to support the community mental health programme in the Selkirk hospital service area. We are also about to undertake an experimental use of cottage-type accommodation at the Portage School for the Mentally Handicapped in Manitoba. Other facilities for the mentally retarded will also be expanded. The St.Am:mt ward for child­ ren will be enlarged. Increased support will be given for the care and maintenance of mentally retarded outside institutions.

We are also glad to be able to report an actual decrease of 467 in the number of patients in our mental hospitals since 1958. In effect, the new vigor of our Psychiatric programme has not only returned many patients to their homes, but has spared us the construction of a new 600 bed, 6 million dollar mental institution. These results are increasingly dramatic when we consider that the total number of admissions has continued to increase by 20 percent each year.

The key to this success story is, of course, the more intensive psychiatric care which has gradually reduced the average length of stay before dis­ charge to the new low figure of 3 1/2 months. All of these projects are part of a sound economic approach to effective maintenance of mental health in the community and warrant our full support. In the general health field, 1962 was a year of further development and service. An intensive province-wide oral poliomyelitis programme was carried out. This programme gave Manitoba the highest population coverage ratio of any area in Canada.

In this connection we April 26th, 1963 Page 1683

(Mr. Roblin, cont'd).... note with great satisfaction that only four cases were reported during 1962. The opening of the Manitoba Rehabilitation Hospital in 1962 marked the establishment of a reoriented programme of rehabilitation service •. The $4.5 million investment represented will prove to be one of the most directly effective. expenditures in the health field as people are given the wide range of expert assistance to a full return to productive health. New agreements with the Federal Government will also make possible the development of a comprehensive-vocational rehabilitation programme for adults.

A new facility for the Society for Crippled Children and Adults will also be completed in the near future. During the coming year, the Departments of Health and Welfare will operate for the first time an inter-departmental care authority in support of people requiring less complex help than provided in hospitals. This will aid in the economical use of hospital space in Manitoba. Cancer diagnostic and treatment services will be further expanded in the coming year with the opening of the uniquely comprehensive headquarters constructedior the Cancer Foundation.

Dental health programmes will also receive new support through the newly organized two-year course for dental hygienists - the first graduates from the University will be ready to enter the field in 1965. The five year programme for the development of improved hospital facilities, commenced in 1962 , has shown progress. By the end of 1963, we expect to have passed the half-way mark in a more than $40 million expansion programme involving some 57 hospital construction pro­ jects. Construction programmes are currently underway in 12 institutions while another 20 projects are expected to begin in the coming year.

Since its inception the Hospital Plan has been faced with the problems of increasing cost. In 1959 the gross cost of operation was $27 million or $31 per capital. · In 1963 we anticipate that this will be $43 million, or a per capita cost of $45. It is obvious that this increase of 45 percent in four years is the object of legitimate concern to the Manitoba Hospital Commission and to the public generally whose taxes are required to help meet these great expenditures. In 1963 the costs of health and welfare will be absorbing nearly 30 percent of our total current revenue or $39 million.

If we add to this the costs of the Hospital Plan which do not come directly into our current budget, for our account includes only the provii:J.cial subsidy and hospital services tax payment, it is obvious that this increasing impact creates its own limit­ ations. There are very real if not precise limits to the extent that our economy can support the ever-growing costs of social services. Good as these services are in themselves, they necessarily are dependent upon the more directly productive forces of the economy for their support.

Hospital costs indicate the essential need for economy and efficiency: We look to the autonomous hospitals for full support in our efforts toward this end. As I have stressed in previous Budgets, expenditures in education, welfare and health responsibility together comprise one of our soundest economic investments. In 1963-64, we anticipate a combined investment in this human resource sector of the Provincial development amounting to some $84. 5 million - about one third of all current and capital account commit­ ments for the fiscal year.

I believe the prospect for Manitoba's progress in the coming year is most encouraging. We are successfully continuing that transition between a dependency on primary resource pro­ duction to a diversified and resilient economy. Our country enjoyed nearly the best rate of overall growth experienced among the nations of the free world last year. To this our Province contributed substantially.

We know that the future will not be easier than the past, but we know as well that the future will bring far greater opportunity for us if we have the initiative, the­ imagination and the courage to grasp what it can make available to us.

Whatever may be the final disposition in the changing trade patterns in Europe; whatever new economic arrangements may be developed with United States t;Uld other hemispheric part­ ners; whatever may be the challenges placed before us by newly emergent communities and whatever risks and dangers may beset us in the months ahead - we have substantial means to meet every challenge as an opportunity. We shall succeed in realizing the full potential of our opportunities if we are prepared to put to the task our capabilities and our maximum energies.

Provincial-Municipal Relations In the progress of our Provincial community there is no greater contribution than that_ Page 1684 April 26th, 1963

(Mr. Roblin, cont'd) ••. generated by the endeavours of the people themselves through their local communities. m· recognition of local government. as the most important instrumentality by which progress can be achieved, the Government has emphasized assistance and encourage­ ment to local effort as fundamental. An average increase in aid to local government each year since 1958-59 of some $7. 6 million in direct and indirect support contributions by the Province has expanded the total municipal aid from the Provincial treasury to a total forecast of $80 million for 1963-64.

Very nearly 60 percent of Provincial revenue is thus being directed to local government support and development. The range of local services and facilities being directly or indirectly assisted includes every major function and responsibility of local government. Educational aid has almost doubled in the past four years. Social assistance has been very substantially expanded, mainly at the expense of the Provincial treasury. Road building in both the Provincial system and the inter-connecting municipal systems has been given the greatest support in the Prov­ ince's history.

Drainage, water supply, sanitation and many other basic necessities of the local service structure have received substantial direct and indirect assistance from thE:J Province. Total Provincial aid to the local taxpayer in Manitoba now approximately matches his own aggregate local tax. We have succeeded in relieving the local taxpayer of an amount equal to the weight of his current taxes. Provincial aid has been growing at roughly double the annual rate of growth in municipal levies in aggregate. This h..1.s been a very real contribution toward the reduction of local tax burdens.

But we are aware of the financial problems facing local government. With these foremost in our minds we have established the Royal Comrp.ission on Local Government Organization and Finance which will have the two-fold task of defining the problems and recommending possible solutions. This work has been placed in capable hands. Under the chairmanship of the Honourable Roland Miche ner, P.C. , Q. C. , supported by the Honourable Judge John Thompson, Mr. Donald Campbell, Q. C. , Dr. Murray Donnelly, and Mr.

James Mclnnes, C.A., the Commission will, I am confident, contribute much to the satis­ factory solution of the complex problems affecting local government. I hope that a preliminary report will be available before this House meets again, in 1964. The Metropolitan Winnipeg Review Commission, for which provision was made at the last Session of the Legislature, has now been convened under Dr. Lorne Cumming, Q.C., as Chairman, with Mr. Sydney Halter, Q.C., and Mr. Russell Robbins, as Commissioners. The Commission is advancing in its studies of the special problems affecting the Greater Winnipeg area.

It has been reported to us that a substantial number of detailed submissions have been received and that these and other relevant matters have been under close study by the Review Commission for some time. In the meantime, as I have noted, the Province will be contributing $80 million in aggre­ gate aid and support for continuing local development in 1963-64 - up some $9.3 million over 1962-63 estimates. Our local taxes remain the lowest of any western province. Our local economies are the beneficiaries of one of the widest ranging government support programmes for industry and related enterprise.

Our people are enjoying their highest level of earnings and productivity in our history. We may say, with reason, that our problems at the level of local government, however formidable, can be met. Dominion-Provincial Relations Our experience for 1962-63, the first year under the tax collection agreements and their attendant fiscal arrangements between Canada and Manitoba, on the whole has been satisfactory.

Revised estimates of the basic tax-sharing payments which will actually be received in respect of the fiscal year 1962-63 - exclusive of Hospital Services Tax revenues - are set out in a table, together with a preliminary forecast for 1963-64 . . . . • . Continued on next page. April 26th, 1963 Page 1685

(Mr.

Roblin. cont'd) •• ·• CANADA-MANITOBA TAX COLLECTION AND FISCAL ARRANGEMENTS RECEIPTS (Thousands of Dollars) ·· Personalincome Tax Corporation Income Tax Succession Duties Total Yield of Standard Taxes Equalization and Guarantee Total Increase over year 1962-63 1963-64 Revised Estimate 14, 822 15, 129 2 •. 419 32, 370 12. 250 44, 620 Estimated 16, 855 15.242 2,671 34,.768 i1, 033 45, 801 The $2 million increase in personal income tax collections estimated for 1963-64 is in large measure attributable to the progressive nature of the fiscal arrangements with Canada whereby, with the Federal Treasury withdrawal by an additional one percent from the personal income tax field, our share increases correspondingly for the coming year.

This progressive withdrawal will continue cumulativ.ely by one percentage point per annum for the life of the agreement. The importance of this advantage can be clearly understood when it is realized that the 1961 drought effects on personal income and on business earnings have yet to work their way through the fiscal system. This is particularly true of corporate earnings which are reported over a considerably extended fiscal period.

With contraction in the profits thus constricting ordinary growth in tax receip.ts, the additional abatement of federal tax liability has been a most welcome and necessary advantage to our economy. We are in fact able to forecast a net in­ crease in these aggregate tax collections and guarantee revenues of nearly $1.2 million for 1963-64 over 1962-63.

The Hospital Services Tax now forecast at $7, 237.000 for 1962-63 will total to a forecast $7; 643, 000 in 1963-64 and will thus provide an increase of over $406, 000 in support of hospital services in the Province. ' We have also received retroactive adjustment in our arrangements in respect of the Dominion-Provincial Tax-Sharing Arrangements in force in the 1957-62 period, as a result of revisions in population following the 1961 census.

Some $2. 9 million in additional revenue has been received in respect of the fiscal years 1957-58 through to 1960-61, following from revised equalization computions utilizing corrected inter-censal population estimates. This amount, along with an adjustment of $1, 081, 000 for 1961-62, has been taken into revenue in 1962-63 and is shown as having been received in that fiscal year.

While, as I have said, we regard the financial experience under the new fiscal arrange­ ments with Canada as satisfactory on the whole to date, we have nevertheless not departed from the Province's traditional position in respect of these matters. As I have emphasized on more than one occasion in this House and at Federal-Provincial Conferences, we remain firmly convinced as to the necessity of greater recognition of provincial responsibilities through increased·tax-sharing and the full acceptance of the pri'nciple of equalization.

The attitude of the Premier of Q.ebec as expressed in his recent Budget address supports this position in a very firm way. We, in Manitoba, are, I think, united in the opinion that anything that is done must be consistent with our national purposes, but it is the Government's view that this can best be achieved by a realistic recognition and acceptance of the need of the Provinces for the financial means to meet their growing responsibilities.

It is evident that the new Prime Minister of Canada accepts this view for he made it .quite clear that his party, and now presumably his Government, will apply the principle of ·equalization based on the revenues of the richest province. Nor is it many weeks since the National Council of the Liberal Party is reported as having unanimously adopted a resolution Page 1686 April 26th, 1963

(Mr. Roblin, cont'd) .••. calling for a greater equalization and increased sharing of those tax fields with which Canada and the Provinces are both concerned. There are matters that can only be settled. by reasoned negotiations in a co-operative spirit and it would, I think, be proper for the Federal-Provincial Fiscal Conference to be re­ convened at an early date. I will be prepared to present this Province's case at that time . FINANCIAL REVIEW It must be recorded as a fact that Government will continue to occupy a vital and probably growing role in our economic development.

This is not to say that it should assume responsi­ bilities that can, as well or better, be assumed by the people themselves. Rather it must be prepared to play its part and be fundamentally concerned that the most favourable conditions for economic and social growth and development are created and maintained. This is the basic premise of our programme. Public Debt While the net amount outstanding on capital account has increased by $15 million over the past twelve months it has done so in line with deliberate policy based on our analysis of the needs of our people.

Men do not hesitate to invest in endeavours where the return is assured. Neither does this Government. Our credit policy is an important tool in stimulating the , growth of employment in particular and the economy in general. It has passed the tests of the past five years with obvious benefits to our people. There are, of course, some practical limits to the extent of such future commitments, but from the high regard in which the credit of this Province is held in the money markets of the continent it is clear that this point is far from being reached.

Our interest cost continues to compare favourably with similar governmental obligations. For example: 5 1/2 percent long-term Manitoba bonds were being offered on March 15th of this year on a 5. 37 percent basis; Ontario's were at 5.31 percent; Quebec's, Nova Scotia's and Saskatchewan's at 5. 41. Government of Canada 5 1/2•s were on a 5.20 basis.

ComEarison of Public Debt March 31 st, March 31st, December 31st, 1961 1962 1962 Debentures $2 98, 892, 000 $26 6, 71 7, 000 $247, 017,000 Savings Bonds 38 , 585, 100 52,1 44,200 Treasury Bills 54, 111, 543 66, 831,372 66, 930, 689 Gross Debt - $35 3, 003, 543 $3 72, 133,472 $36 6, 091, 889 Less: Gross Debt for Self- Sustaining Purposes 21 7, 436, 929 203, 28 4, 863 181, 107,229 $1 35, 566, 614 $1 68, 848, 609 $ 184, 984, 660 Less: Sinking Funds & Other Funds held for General Debt Retirement 11, 79 4, 766 12 ,7 27 , 061 15, 621,737 Net Debt - � 123 .7 71 , 848 � 156, 121, 548 �1 69, 362,9 23 Once again, I should emphasize that the burden of debt should be gauged not by its abso­ lute size but by the ability to assume its costs.

The best measure of this is the relationship of interest charges and amortization of discount costs to total revenue. ln the fiscal year ahead of us, we estimate that it will take slightly more than 4 percent of our current revenue to meet these costs. ln 1945 it would have taken two and one-half years' revenue to retire the net debt, while today one and one-quarter years' revenue would suffice, as indeed it did in 1962 . An examination of purposes shows a reduction in our direct utility investment as the Hydro Board and the Telephone System assume their obligations in their own names.

Our in­ vestment in tangible assets makes up almost the whole of the direct responsibility of the Pro­ vince, confirming the nature of our investment. April 26th, 1963 Page 1687

(Mr . Roblin , cont'

d) Purposes of Public Debt - December 31st, 1962 (Thousands of Dollars) Public Utilities Other Recoverable Debt Provincial Buildings Roads and Bri dges Other Public Works Grants and Advances Unemployment Relief Debt Discount Trans actions $172 ,6 72 8,4 35 11, 587 131, 011 14,30 4 9,3 01 10, 176 8, 606 $36 6, 092 ' As in the previous year , our public financing was confined to utility borrowing with a small issue for the University, under our guaran tee.

Apart from Treasury Bills , the direct needs of the Province were met by the second issue of Manitoba Savings Bonds which produced over $20 , 000 , 000 at an interest rate of 1/4 of 1 percent below the previous year . This same general policy will be followed in 1963-64 and the third Savings Bond series will likely be is- sued in a few weeks . · In February of last year , the Province undertook to offer $1 million a week in 91 day Provincial Treasury Bills .

Despite the instability of the money market during past months which made these short-term loans somewhat less advantageous than originally expected, our experience can be considered as a succes sful one with savings of at least 1 percent compared to the cost of other forms of domestic borrowing. It has not been our policy to borrow in foreign markets except when conditions indicated it was definitely advantage ous to do so . Over the past several months, however , the spread between long-term interest rates in Canada and the United States became increasingly great .

When we examined the si tuation in January last, we found that a 20-25 year loan in Canada would have had to be sold at a yield of close to 5.5 0 percent. On the New York market we could secure similar funds at half the financ ing cost, for a ra te of 4. 90 percent to the investor there, and when the premium on the proceeds is taken into account , the actual cost to us in terms of interest is reduced to 4.4 1 percent.

With these facts in mind, we made arrangements with two Canadian groups, with the participation of a leadin g New York house, to negotiate a private placement in New York for Manitoba Hydro in the amount of $25,0 00 ,0 00 (U .S.). It gives me a good deal of satisfaction to advise the House that the loan was rapidly and succes sfully placed at the lowest interest rate secured by any Can adian government in the United States , including the Government of Canada and the Provinces of Saskatchew an, Alberta and Quebec, in the period since the withholding tax was imposed in December , 1960.

It is obviously true that Manitoba Hydro assumes an obligation for repayment of the loan in U .S. funds after the term of 25 years has elapsed. But the long term trend of exchange is such that the premium secured and placed in reserve against the possible requirements for U .S. funds at maturity is more than likely to be adequate for the purpose. This has been done on the advice of the Board' s audi tors.

There is a further protection in the fact that the Board retains the right to call these bonds :ifter twelve years and is thus in a pos ition to take advan­ tage of any favourable conditions prevailing in either the money market or in foreign exchange over the last thirteen years of the issue� We have continued the conservative policy of setting aside adequate reserves for an debt over one year in term .

The Retirement of Debt Act provides that sinking funds with res ­ pect to dead-weight debt shall be paid into the reserve at a minimum of 3 percent of the prin­ cipal amount outstanding in all borr owings over one year 1n life. This arrangement , at a 4 percent earning rate , provides for the retirement of a loan in just over twenty-one years . In the case of the Utilities, 1 percent of the amount outstanding at the end of the previous fiscal year is required, plus· 4 percent on the accumulated bala nce in the sinking fund account .

As at December 31 st, 1962 , our sinking funds and other funds held for debt retirement Page 1688 April 26th, 1963

(Mr. Roblin, cant' d) . . • . . totalled $53 . 8 million of which $38 . 2 million was attributable to self-sustaining debt and $1 5.6 million to our direct debt. Guarantees Our policy with respect to guarantees rem ains unchanged. They are restricted to those government agencies and others which in aim and function are distinct from the regular de­ partments of government whose activities are a charge upon the Consolidated Fund .

STATEM ENT OF GUARANTEES OUTSTA NDING BY CL ASS OF BORROWER March 31st, March 31st, December 31st, 1961 1962 1962 Guaranteed as to both Princi,Eal & Interest : Manitoba Hydro $1 40 , 150,000 $1 59,950,000 $2 01,800,000 Manitoba Telephone System 20,000, 000 35,000 ,00 0 University of Manitoba 7, 600,000 10,100 ,000 12,6 00,000 Hospital and Other 4,360,886 8,697 ,30 2 8,725, 149 '� 152 ,1 10 ,8 86 $1 98,747,302 �2 58 ,12 5,14 9 Guaranteed as to Interest Only: School Districts $ 6, 042 ,8 02 $ 5,629,974 $ 5' 225, 843 Municipal 3,2 76, 128 3,133,839 2,9 84,537 $ 9,3 18, 930 $ 8, 763,813 $ 8,21 0,3 80 � 161, 429,816 �2 07 ,511,115 �2 66,3 35, 529 Local Government Borrowings Improved condition s for local government borrowings have continued in Manitoba .

The co-operation between the local authorities and The Municipal Board has been a fruitful one and is reflected in the state of the market for these municipal and school debentures . Rates were secured during the year comparable with those prevailing for similar securities anywhere in Canada . Through the facilities of The Municipal Board, and with its direct assis tance, $8.2 million of school debentures were sold. In addition the Board participated in the dispos al of $2. 5 million in municipal and hospital district securities .

Efforts have continued to improve the information available to investors and this, along with the trustee agreements and improved marketing methods, has been responsible in sub­ stantial measure for the higher acceptability which these smaller local credits now enjoy. In­ creased emphasis is being placed on developing local interest in the securities of the inves­ tors' own districts as it is con sidered most helpful in promoting a favourable attitude and res­ pon sibility toward local government matters.

Revenue and Expenditure - 1962-63 Revenue The original budget estimate for revenue in the fiscal year 1962-63 was $121 ,5 20 ,3 00. Indications are, prior to final closing of the books of the Province, that this will be substan­ tially exceeded and will total $128, 980, 592, or an increase of $7,4 60,2 92. This .is due in large measure to increases over estimated amounts in the following revenue headings. They're listed here Madam Speaker.

April 26th, 1963 Gasoline Tax Corporation Income Tax Success ion Duties Stabilization and Guarantee Canada-Manitoba Tax-Sharing Agreement (Adjustment Payment) Liquor Profits Mining Royalties Transfer of Surplus $600 ,000 615, 000 533,000 299,000 4, 043, 000 502,0 00 13 2, 000 81 6,4 23 Page 1689

(Mr. Ro blin, cont'd) ••••• There were a few decrea ses, principally Individual Income Tax, $231,0 00, and Land Titles Fees, $9 9,7 42 . Expenditure The main Estimates for 1962-63 were in total $121,2 64, 196 . Our last revision prior to final closing of the books indicates a total of $121,38 2,1 32, or greater by $117 ,9 36 .

The result is a surplus on current account of $7 ,5 98 ,460 which is being carried forward into the next fiscal year to provide stability in our revenue position. ·T axation In recent months , and particularly during the last Provincial election campaign, there has been considerable public discussi on as to the likelihood of a general sales tax in the Pro­ vince.

On November 22nd, 1962 , when speaking to the Union of Manitoba Municipalitie s, I made reference to this ques.tion in the following terms: ''I foresee no immediate or substantial change in the present tax structure in Manitoba, indeed I suggest no responsible person will forecast any at this time, certainly not in advance of the intensive inquiries into the needs, capacitie s and capa bilities of all three levels of government." This is still my view, and a Provincial sales tax is not included in these proposa ls .

But the essential needs of a. growing economy do demand more revenues to pay for the new and ex­ panded programmes that the House has already approved. In the search for such revenues I have tried to find it where it would have the least burden on our development. For this reason I have turned to the field of luxury taxes and am recommending to the legislature a tax on the purchase of tobacco products. This would be at the rate of one-fifth of one cent on each cigar­ ette with corresponding charge s on cigars and other forms of tobacco .

Three Canadian provinces alre ady have similar taxes on cigarettes and tobacco - Quebe c, Prince Edward Island, and New Brunswick - while in all the other provinces except Albe rta and in this one, they are subject to retail sales taxes. In United States forty-seven of the fifty states apply this form of taxation . The individual impact of this tax is not great but by its very volume it becomes a substan­ tial revenue producer capable of yielding about $3 , 500 ,000 in a full year . In the pres ent fiscal year we are estimating $2 ,250 ,000.

The average smoker in Manitoba smokes less than a pack of twenty cigarettes a day - to be exact about 288 packs a year . Under the proposed law, at 4 cents a pack, his annual tax would be $11 . 52 or less than a $1. 00 a month. For the cigar or pipe smoker the total charge will generally be even less . Smoking is a matter bf personal choice and decision and as such is suitable for luxury taxation. The tax will be administered in a manner generally similar to that used in the tax on gasoline .

This time last year I announced that it was my intention that the tax adjustments proposed in the Federal Budget of 1962 would be reflected in Manitoba law. This has been done in so far as individuals are concerned. However, after negotiations with the Government of Cana da; I am advised that it would not be possible under the Collection Agreement to extend the sales tax incentive provisions to the Provincial part of the corpora tion income tax . I did consider the pos sibility of applying such a credit on our own but this would have been a difficult and expensive operation .

In view of the pres ent Royal Commissio n on Taxation which is actively engaged in this area, I have decided to defer any such action for the time be­ ing. When the Royal Commission on Taxation reports, the •question of taxation and incentives will be reopened for a thorough examina tion. Revenue and Expenditure - 1963-64 Revenue A substantial increase is shown in the estimated revenue returns for the present fiscal year amounting to $14,69 5,3 33 . We have based our estimates on a continuing growth of the economy reflected in an increase of about 3 percent of the Gross National Product.

The in- crease is made up of a number of items , and the most important are listed: · Page 1690 April 26th, 1963

(Mr.

Roblin, cont'd) •••• Gasoline Tax Motive Fuel Tax Individual Income Tax Corporation Income Tax Succession Duties Tobacco Tax ARDA Agreement Liquor Control Mining Royalty Game & Fur Licences & Royalties Auto & Drivers' Licences Unemployment Assistance Agreement Transfer of the Deferred Revenue Reserve To off-set these gains, some revenue losses are expected: Equalization & Stabilization Guarantees School Lands Fund Interest Other Mining Revenues $1, 300, 000 250, 000 2, 195, 000 741, 000 785, 000 2, 250, 000 ' 672, 000 1, 427, 000 140, 000 156, 000 1, 450. 000 384, 000 3, 854, 366 $ 918, 000 394, 000 108, 000 The loss of the School Lands Fund interest from revenue is due to its dedication for the special purpose of grants to affiliated colleges, instituted this year.

It is a matter of some regret that I find it necessary to propose the introduction of coloured gasoline and motor fuel for tax-exemption purposes. This, of course, is not a tax increase but it is an administrative change which does have important implications for revenue. A study over the past year of all the facts available in Manitoba and a close comparison with the other three Western provinces (all of which use coloured gasoline) has convinced us of the need for this step.

Under the present system it now appears that revenues of more than half- a -million dollars are being lost annually to those who are abusing the present tax-refund sys­ tem for gasoline and motor fuel. With the introduction of colour, the great majority who fully accept their tax liability in this respect will suffer little inconvenience (and indeed in contrast to the present refund system, they will receive their tax exemption on the spot at the time of purchase). Those who fail to accept their tax liability can more effectively be brought to ac­ count.

It seems only just and fair to the public who pay their taxes as they should that this situation should be remedied in respect of the minority who are delinquent. Expenditures As is the custom in this House, Estimates for the new fiscal year have been fully dis­ cussed in the Committee of Supply. References to the tables and charts accompanying this statement will give all pertinent details.

It is sufficient here to record that while the ever increasing demands for government services have brought an increase in our current budget of $14, 797, 045 over the last year, to a total of $136, 061, 241, I am again able to present a budget with a surplus of $154, 392 . Capital Programme Our capital programme continues to make its substantial contribution to the Provincial economy. In this programme we have endeavoured to follow the principle of only incurring a continuing debt where there is an earning asset to off-set its costs .

The clearest examples of this are of course the utilities but the same principles apply to such projects as highways where the return may be less direct but none the less real. You will have already noted that a very large part of the water control expense, as it relates to the Red River Floodway in particular, has been charged to revenue account. While the Floodway is as much of a permanent asset as any other public work, I am nevertheless, in view of the more indirect nature of its return, recommending that as far as possible its costs should be treated as a current charge.

An appropriate capital programme table has been included in the data papers appended for your information. What has been put before you is a careful but comprehensive programme of investment dedicated to the economic and social growth of this Province. I believe our April 26th, 1963 Page 1691

(Mr ; Roblin, cont'd) •••.• people fully understand t)lat. the Gove:rmnent ll1ust be_ and is pre­ pared to assume its fair share of responsibility for the capital investment of the country. Forward investment is necessa ry to provide the productive· assets our Province must have for growth and development. Without such growth and development the future holds only limited promise for us or our children, as the Report of the Committee on Manitoba's Econo­ mic Future so clearly confirms. The Developing Economy .

The Report of the Committee on Manitoba' s Economic Future - Manitoba 1962-75 , has attracted a great deal of attention inside the Province and out. This report did not come about by chance . It was preceded by a great deal of thought and concern for our future. Those of you who have read oui: submiss ions to Federal-Provincial Conferences! to the Royal Commis­ sion on Banking and Finance , and that arising out of the Conference of Premiers wilfknow that the Government regards the problems of the future now clearly facing us as a challenge to our energy and ingenuity.

To quote briefly from the submission to the Royal Commissi on on .Banking and Finance, '' •.• The achievement of an economy that has well developed primacy , secondary and service industries is the basis of our concept of an internally balanced regional economy which contributes most satisfactorily to a sound national development." And again, "It is our philosophy that Government has a responsibility to create the conditions wherein the type of industry described will develop in an atmosphere conducive to its success.

" This is a national problem, of course , but in a Federal state there are important pro­ vincial responsibilitie s as wen.- It has become more and more obvious as our economy has developed that the provincial influence is an increasingly important one, far beyond the scope envisaged for it when this country was founded nearly one hundred years ago . As this country has grown and as our economy has devel oped, an increasing responsibil'­ ity for growth has fallen to Provincial Government. Provinces and their municipalitie s now control close to half the public expenditure in·Canada.

It is only ten years ago that this pro­ portion was closer to one-third. In our submission to the Royal Commiss ion on Banking and Finance we estimated that capital expenditure of the Provincial Government and its ag encies made up about 35 percent of the total capital expenditures in the Province and this is supported by reference to national figures. There is nothing in the report of COMEF to suggest that Government role will be relatively less in the years ahead.

While Manitoba is primarily a free enterprise and private initiative economy, the growing importance of provincial govern­ mental activity in terms of economic growth must be accepted and understood. The economic philosphy of this Government is reflected in its positive action in many fields .. We have put into effective terms our belief that government's responsibility in a free society is to guide, prepare and assist its people to achievement through their own efforts. This we have done through many channels , direct arid indirect.

The development of our utili­ ties , the extension and improvement of our highways , water control and conservation, the ad­ vance of all phases of education, agricultural research, agricultural credit, business credit, trade development, urban redevelopment and many more - all are aimed at the stimul ation of enterprise. These are aside from any of the important socia l advances that we have sponsored over the past five years . We find a clear and concise exposi tion of these ideas in that

chapter of the report of COMEF which deals with a recommended programme of action. To quote in part, ..• "The role of Governments is to create a favourable climate for such private action. It must act as a catalyst by instituting those measures and programmes which wi ll encourage the private sectors of the economy to help themselves ." The COMEF report has confirmed many of the problems with respect to our economy which we had suspected when we first set the Committee 's task .

As a result we have been able , at this Session, to put before you a number of proposals for measures which we regard as necessary to the continued and accelera ted growth of this Province . First among these is a proposal which we have advocated on a broad national scale on several previous occasions. This concerns the establis hment of the Economic Consultative Board as an advisory group to the Manitoba Development Authority (the latter being the Econo­ mic Committee of Cabinet) , as well as to the public itself.

As you will have seen from the legislation , the Authority and the Board are charged with furthering the economic development Page 1692 April 26th, 1963

'\ (Mr. Roblin, cont'd) ••••• of this Province through a number of specific objectiv es . The Con­ sultative Board will provide the Government and the public with the best and most widely re­ presentative advice of the leading minds in the basic sectors of our society as how best to achieve our goa ls . We seek to make the Economic Consultative Board an agent of society by whose varyin g yet representative views we may be aided in our efforts toward growth and development of Mani toba.

In effect, what we must have is a continuation on a more compact sca le of that succes sful instrument, the "Committee on Manitob a' s Economic Future" . But let me emphasize this, for it is fundamental to our whole approach to these problems. We are not in any way seeking, nor are we desirous of, shifting governmental responsibility . This will remain , as it must, with the Legisla ture , through the Executive . However , there must also be more direct instruments for the implementation of policy than economic advice alone.

Many of these already exist through the Gove rnment departments , the utilities, the credit corpor ations , etc. , but other steps are es sential . Therefore, we are introducing further measures leading toward our goal of co-operative development of the Pro­ vince. There is the Manitob a Research Council whose purpose will be the promotion and carry­ ing out of research and sci entific enq uiries in the various segments of Manitob a's economy. In this , we are building for the years ahead, not merely for the immedi ate present.

To aid in the broadening of markets for Manitob a producers we have proposed the esta­ blishment of the Manitob a Export Corporation. This corporation will not duplicate the efforts of other bodies in providing financial or other governmental backing for export trade . Rather it will provide special, provincially oriented help and expert "know how" - particular ly to en­ courage small firms in the export field. If we are to achieve our goa ls, such expansion of our existing and potential markets is a necessi ty .

The third of these new ag encies for progress is the Manitob a Design Institute whose purpose will be the development of improved design and quality in Manitoba industry. Provi­ sion is also being made for a products development fund to encourage the development and diversification of our industrial production. These we regard as having an important bearing on our emphasis on quality in our output. There will be other things to be done, and these will be brought before you as occasion demands and circumstance s permit.

To my mind, the COMEF report and the study behind it illustrate better than anything else the economic philo­ sophy of this Government - that only through voluntary co-operation and joint effort can we prosper . I would like to close these remarks with a brief quotation from an editorial in The Finan­ cial Times of Montreal . "ln Manitoba business and labour and government have started a con­ certed effo rt to define and understand the roads to growth." There is little more to be said but there's much to be done.

Conclusion In conclusion, Madam Speaker, this is the beginning of a new tenure of office for this Government. I think we can justifiably look back with a sense of accomplishment at the past five yea rs , not with any feeling of self-satisfaction or complacency but With a renewed deter­ mination to see that the next few year s are even more productive . We are' at an important stage in Manitoba's development, in fact in the development of the Canadian nation . We have before us important moves and decisions . With confidence and effort this Province can move on to an even more productive future.

Now, Madam Speaker, I move, seconded by the Honourable Minister of Industry and Commerce , that you do leave the Chair and the House resolve itself into a Committee of Ways and Means to consider the requirements of Her Majesty's Government in Manitoba for the fis­ cal year beginning April 1st, 1963 . April 26th, 1963 Page 1693

PROVINCE OF MANITOBA EST IMATED CURRENT REVENUE 1962- 63 MAIN ESTI MATES Percentage of Total Revenue % ___ 1. 1 Tax on Insurance Corporations _--1. 7 Statutory Subsidy Mines and Natural Resources 1, 400, 000 2, 054, 000 3, 720, 600 --- 6. 7 [f***�W' I or�i»m®!ll,illillil@l!il!ll· ml"'i!llliillilll ¥1!!11!llllll!lll!lll'iillli iili%lll illW!iilill lii FI!ieill l/ -- 11. a Canada-Manitoba Unemploy­ ment Assistance Agreement Motor Vehicle and Drivers • Licenses 4, 500, 000 r !!Ill!""' Page 1694 1-- 12.3 Other Departmental Revenues Government Liquor Control Commission ·· Gasoline and Motive Fuel Users ' Tax __ 41.7 Canada-Manitoba Tax­ Collection Agreement Income Tax* $20, 609 , 000 Corporation Tax* 16,195 , 000 Succession Duty 1, 886 ,0 00 Equalization and Guarantee 8, 175, 000 14,3 71, 700 14,908, 000 21,750, 000 50, 641,000 100.0 % TOTAL $121, 520, 300 Source : Treasury Department * Including Manitoba Hospital Services• Tax April 26th, 1963

PROVINCE OF MAN ITOBA EST IM AT ED EX PENDIT URE REVENUE ACCOUNT 1962 - 63 MAIN ESTIMATES El!!)enditure $ Function Percentage of Total El!!)enditure % Public Debt: interest and 4, 430, 063 Amortization of Discount 3.6 4, 463,9 15 Mines and Natural Resources 3. 7 :*#%@ ff Ni@tt\§8 Sinking Fund and Debt 4, 818,9 20 Redemption 4.o --I J!lll1Mil!lli!!•'"• ., . . . . .

IMH&Mb& .*9 ia!r) ®f)·· 5, 135 ,3 65 Agriculture and Conserv.ttion 4.2 ·- - 13,8 98 ,79 2 Service Departments 11. 5 ·- - •Oi&HII ::D 15, 323 ,1 84 Public Works and Highways (including Highway and re­ lated Aids to Municipalities) 16, 224, 090 Welfare 20 ,4 35 ,4 84 Health 36 , 53 4, 383 Education $i21,2 64,1 96 TOTAL Source: Treasury Department April 26th, 1963 1Z .6 -- c::lJ 13.4 -- 16 .9 -- 30 . 1 -- 100.0 % - l!llli.\iliiiiiii¥ii ""*' 1 [ . "=] Page 1695

PROVINCE OF MANITOBA ESTIMATED CURRENT REVENUE 19 63 - 64 MAI N ESTIMATES M'*', Perc entage of Total Revenue % 1. 1 T!IX on Insurance Corporations 1. 5 Statutory Subsidy Revenue ---r== 1, 450, 000 2, 089, 000 G.r=___:_ _____ --, lt*H 3 .1 Mines and Natural Resources 3. 6 Canada-Manitoba Unemploy ­ ment Assistance Agreement 4, 172, 875 [' ijijij@f"t :.,::·:·:!:::�.:: ·::.: :- ::::··.{·. ·· ·,·. : .• • .... • · , . . • ·· . . . . . Page 1696 I I 7.1 Motor Vehicl e and Drivers' Licenses -- 12. 0 Goverlllll ent Liquor Control Commission -- 17. 1 Gasolin e and Motive Fuel Users• Tax -- 39. 2 .

Canada-Manitoba Tax- Colle ction Agreement Income Tax* $22, 804, 000 Corporation Tax* 16, 936, 000 Succession Duty 2, 671, 000 Equaliz ation and Guarantee 11, 033, 000 100. 0% 4, 884, 000 9, 650, 000 20, 890, 758 16, 335, 000 23,300, 000 53, 444, 000 TOTAL $136, 215, 633 ====================== · Source: .Treasury Department * Inclu ding Manitoba Hospital SerVices' Tax April 26th , 1963 I

'!

I EJCPenditure . $ 5, 871 ,7 82 PROV\NCE OF MANITOBA ESTI MATED EXP EN DITURE REV ENU E ACC OUNT 19 63 -6 4 MAI N ESTIMATES Fun ction PUblic Debt: · Interest and AJnortization of Discount Percentage of Total E lffi enditure % 4. 3 - - Mines and Natural Resources 3,6 -,- I t'U ·-o 4; 918, 405 Sinking Fund and Debt I d Rederoption 3.9 - - .___ ___ __:__=][? 5, 359, 027 12, 580, 900 Agriculture and Conservation 14, 960, 839 Service ])epartroents 14, 681, 270 Public Works and Highways (inclUding Highway and re­ lated Atds to Municipalities) 17, 544, 310 Welfare 21,458, 339 Health 38, 686, 369 Edu cation $136 . 061, 241 TOTAL Source: Treasury Departroent April 26th, 196 3 I +n "** 9. 3 -- .____ __ * ____JD 11 ,0-- t "lJ 10. 8- - ("' '""*"!!¥ . , 12 .9 -- r�...--- _** ___JD 100 ,0 % Page 1697

"d � (!) ,_. "' "" "' PROVINCE OF MAN ITOBA REV ENUE AN D EXPEN DITURE FISCA L YEARS 194 1 -196 3 (R EVENUE ACC OUNT ) � REVENUE 88 EXPENDITURE � §iiiJ(3 '140 3a 4130 ·� � -l120 � � � G � 3a -1110 ij ��� 100 �� � � �a� �2 � � � OJE3 96"{ �� �� � �" � � � ·� � ao cS �� �� lllu� � � � � � � � 70C) �� � ��� � � � � llJu� ;ga � 60 � ·� � � � ·� � ·::l � �� ���� 50� IDDoJI � � � � � !niL� !1§ =� � � � � � -l40 > -- � 8E5 �3 � � � � -130 �. :sla � �� � lllu�� � � � ��3 � � � � m=:3 -120 so � e�3 � � � � � � -llo � fBl8 � &-E� 3. � � llJu� �1::e§3 . 0�3 g; � � .. llJiDIIIJ�7 ---'o 19 41 1951 19 58 19 59 1960 1961 1962 19 63 -,

.6" '1 :::: "" a> y ..... <&> a> c..> "d � ..... a> <&> <&> ' Year 1901 (f�scal Year Ending December 31, 1901 ) 1911 (Fiscal Year Ending December 31, 1911) 1921 (Fiscal Year Ending Novembe1• 30, 1921 ) 1931 (Fiscal Year Ending April 30, 1932) 1941 (Fiscal Year »di ng April 30, 191..2 ) 1951 (Fisc al Year Wing March 31, 1952 ) 1957 (Fiscal Year Ending March 31, 1958 ) 1958 (Fiscal Year Ending March 31, 1959 ) 1959 (Fiscal Year Endi ng March 31, 1960 ) 1960 (Fiscal Year Ending !larch 31, 1961) 1961 (Fiscal Year Jhiing March 31, 1962) 1962 (Fiscal Year Ebding March 31, 1963) (l) 1963 (Fiscal Year Ehding March 31, 1964) (

l) REVENUE AND EXPENDITURE REVENUE ACCOUNT 1901 - 1963 * Exclui es 1950 Flood Control and E)nergency Expen:l i tures ot $3,9 42, 423 , (

l) Main Esti.Da tea Source : Treasury Department • Revenue Expenditure $ -- $ 1,008,65 3 988,251 4,454,1 90 4,00 2, 826 9,8 00, 861 10,401,895 14,631, 341 14,631,341 19,92 0,8 13 18,151,988 48,5 35,6 95 42,394, 917 * 80, 123,6 15 80,1 19,2 47 85,356,8 00 81,6 15,1 22 93,897 ,600 85,8 80,954 10 3 , 038 ,6 02 93,650,4 90 112 ,584,139 10 4, 179, 716 121,5 20,300 121,2 64,196 136,2 15,6 33 136,061, 241

Page 1700 A. trr iLI'l'IES C!\PIT!\L AUTHORITY REQUIREMENTS Fiscal year 1963-64 1. l'.anitoba Telephone System (guarantee ) 2. Manitoba �·iater Supply Board B. PROVINC I.'IL DEPARTNENTS 1. Provincial Buildings 2. Land acquisition, Land Settlement Projects, N.-:ttural Resource Developnent Projects and He­ creationAl Development Projects 3. Canada-Hmitoba AIIDA Agreement 4. Agricultural Research 5. Urban Renewal · 6. High�rays arrl Related Projects c. GR.Ar-."'TS, LOANS, ADVANCES OR GUARANTEF' ..S 1. University of l'anitoba (guarantee) 2. · Hospitals and Homes for the Aged 3.

Agricultural Credit Corporation $ 7,0 00, 000 370, 000 $ 7,370,000 $ 4,359,00 0 104 ,160 414, 500 462,0 00 700 ,000 15,000,0 00 $ 21,039, 660 $ 3, 448,1 60 754,000 4,500,0 00 " $ 8,7 02, 160 April 26th, 1963

� t; :=: ., "" p .... "' gs 'tl "' 're .... """ 0 .... PROVI NCE OF MAN IT OBA PU BLIC DEBT GROSS PUBLIC DEBT ' g MANITOBA TELEPHONE SYSTEM €;3 MANITOBA HYDRO - ELECTRIC BOARD * iiiliiif ALL OTHER DEBT RETIREM ENT FUNDS' tiiiTiiJj SINKING FUNDS RE' UTILITIES 8 ALL OTHER APRIL 30 1946 MARCH 31 1950 MARCH 31 1954 MARCH 31 1958 • lnd .. dln�; the 11S!:Icls ul the )>l;nutub� P""''r Cummn•:,wu merged 111 l�h2 MARCH 31 1959 MARCH 31 1960 MARCH 31 1961 MARCH 31 1962 DECEMBER 31 1962 420 400 380 360 340 320 300 280 260 24C � 220 ::3 2 200 � 180 � -J 160 � 140 120 100 80 60 40 20 0

'tl � ._. _, 0 "" � :::::. "" Cl> so ._. <0 Cl> c.> PUBLIC DEBT TRANSACTIONS - CALENDAR YEAR 1962 A. SAVINGS BONDS TRANSACTIONS Series Savings Bonds Issued : 2S Term 10 years Less : Savings Bonds Retired: lS 10 7ears 2S 10 7ears Date of Issue Apr. 1, 1962 Apr. 1, 1961 Apr. 1, 1962 Net Incre,:'lse - Savings Bonds B.

DEBENTURE TRANSACTIONS Debentures Retired : bE 6Z 7C 7V 7Z se SD SE 10 years 4 years 4 years 2 years 2 year:J - 1 month 2 years - 5 months 1 year - 6 months 2 years Less: Debentures Issued: SK 1 yoar - ,3 months Feb. 15, 1952 Aug. 15, 1958 Oct. 31, 1958 Apr. 1, 1960 June 1, .1960 Aug. 1, 1960 Nov. 1, 1960 Nov. 4, 1960 Dec. 14; 1962 Net Decrease - Df!bentures C.

TREASIJIU BILLS: Isoued (exclusive of renewals) in 1962 Less: (11.) Retired during 1962 Date ot MaturitY Apr. 1, 1972 Apr. 1, 1971 Apr. 1, 1972 Feb. 15, 1962 Aug. 15, 1962 Oct. 31, 1962 Apr. 1, 1962 Jwie JO, 1962 Dec. 31, 1962 Ma7 1, 1962 Nov. 6, 1962 Mar. 14, 1964 (

b) Funded during 1962 b7 provincial direct end guaranteed debenture issues Issued prior to Januscy 1, 1962, and (

a) Retired during 1962 . . (

b) Funded during 1962 b7 provincial direct end guaranteed .debenture iosues Net Increase - Treasury BU1s Net Decrease in Gross Public Debt 'Where Payable Manitoba .Ma.J"I.itoba Manitoba Canada Canada Canada Canada Canada.

Canada Canada Canada Canada $ Interest ...!!lli..L Par Value Total 4� $ 20,184, 200 .00 5 4,o67 ,600 .00 � 3,190,800.00 7,258,400.00 $ 12,925,800.00 4 10, 000,000 .00 2i 3, 200,000 .00 3 3,000, 000 .00 2 5,000,000 .00 2 2,500, 000 .00 2 3,500, 000 .00 2 2,500, 000 .00 2 J., ooo,ooo .oo 30,700. 000 .00 -- 3 J/8 1,ooo,ooo .oo (29, 700, 000 .00) 92,724,574.73 273,442.35 li!..'l!ll..032,38 f!lf.,21Z.117!t·Zl 27,747,100.00 1,566,188. 74 18.588.694.86 20,154,88J.6Q 7,S92,2lb.40 $ (9 ,181,983.60 )

� 2: "" "' p. - ..... <.0 "' c..o 'd � � ..... _, 0 c..o � Security Term -- MANITOBA HYDRO Debentures: Series •1511 5 years Series •lT" 20 years Notes - Serieo 1962: "1" -- "2" -- "3" -- "4" -- "5" 3 months •6• 3 months IWIITOBA TELEPHONE SYSTEM Debentures: Series •u• 20 years Serie.s •lB• 21 years Note Series 1962: ·1'·- - UNIVERSITY 01' IWIITOBA Series •lH• 20 years ELDERLY PERSONS HOUSING Sisters of the Order of St.

Benedict Series 1-20 ;years !!m!!m MANITOBA HYDRO Debenture Series •1c• 7 years Note Series 1962, •1• -- •2• - IWIITOBA TELEPHONE SYSTEM Note Series 1962, n1n -- othe r: Winnipeg General Hospital " " " Dauphin General Hospital Brandon Gener81 Hospital Morris Eventide Home Menno Home for the Aged Midd1echurch Home of Winnipeg Ebenezer Home for the Aged Foyer Notre Dame Manitoba Co-op Honey Producera cancer Relief & Research Institute Dl!BT GUARAN1'El!D BY FI!OVINCE CALENDAR YEAR 1962 Where Date of Issue Date of Maturity Payable Aug. 30/62 Aug. 30/67 Canada Aug. 30/62 Aug. 30/82 Canada Mar. 15/62 Demand W innipeg June J0/62 Demand Wi nnipeg Aug. 15/62 Demand Winnipeg Oct. )1/62 Demand W innipeg Dec.

J/62 March 1/6J Winnipeg Dec. 3/62 March 1/63 Wi nnipeg Feb. 1/62 Feb. 1/82 Cena:da Noy, i5/62 NoY. 15/83 Canada Apr. 1/62 Demand Winnipeg Oct. 15/62 Oct. 15/82 Canada Aug . 1/62 Aug. 1/63-82 Canada Mar. 15/55 Mar. 15/62 Canada Mar. 15/62 Demand Wi nnipeg June J0/62 Demand Wimipeg Apr. l/62 Demand Winnipeg Jan. 1/62 June 15/62 June 1/62 Dec. 1/62 Sept. 1/62 Dec. 1/61 and 62 Aug. 1/62 Aug. 15/62 ·N oY. 15/62 Oct • 1/62 {$),609.84 principal due but not peid) Increase in Gross Guaranteud Debt Co upo n � Par Value � 5� $ 3,000,000 .00 6 22,000,000 .00 �t 2,800,000 .00 2,475,000 .00 6 1,880,000 .00 6 2, 770, 000 .00 4.65 10, 000,000 .00 3� 5, 000,000.00 �� 20,000,000 .00 15, 000,000 .00 5! 5, 000,000 .00 5 5/8 2,500, 000 .00 5! 12�,000 .00 $ 92,550, 000 .00 J 3,ooo,ooo .oo ;t 2,800,000 .00 . 2,475 ,000 .00 5! 5,000,000 .00 50, 000 .00 )0, 000 .00 18,000.00 27,000 .00 1,152.63 5,000 .00 13,000 .00 3,000 .00 2,500.00 80, 000 .00 LU.2!l!...ill:21 $ 79,045,347.37

_MADAM SPEAKER: Presenting Petitions . Reading and Receiving Petitions. Presenting Reports by Standing and Special Commi ttees. The adjourned debate on the motion of the Honourable the Minister of Education. The Honourable the Member for Elmwood. MR. RUSSELL PAULLEY (Leader of the New Democratic Party)(Radisson): The hon­ ourable member apparently is out. I'm sure that he wouldn't object to anyone else who desires to speak on this motion to proceed now. MADAM SPEAKER: Stand? Introduction of Bills. The Honourable the Attorney-Gen- er al. HON. S. R. LYON, Q, C. (Attorney-Gener al)(Fort Garry) introduced Bill No. 130,

An Act to amend Certain Provisions of the Statute Law and to correct Certain Typographical Er­ ros in The Statutes; and Bill No. 134,

An Act to vest the Title to Certain Lands in Her Majesty the Queen in Right of Canada. MADAM SPEAKER: Orders of the Day. HON. G. EVANS (Minister of Industry and Commerce) (Fort Rouge): Madam Speaker, before proceeding with the Orders of the Day· I wish to lay on the Table of the House the Re­ turn to an Address for Papers on the motion of the Honourable Member for Assi niboia. HON. C. H. WITNEY (Minister of Mines & Natural Resources)( Flin Flon): Madam Speaker, before the Orders of the Day I'd like to lay on the Table of the House the copy of the Province of Manitoba Firearm Safety Inquiry.

Copies are available for each of the members of the House. HON. G. JOHNSON (Minister of Health)(Gimli): Madam Speaker, before the Orders of the Day I would like to draw the attention of the Members of the House to the fact that Canadian Me1_1tal Health Week, or Mental Health Week, will be celebrated starting Sunday evening and carrying on during the whol.e of next week.

I think that I would just like to say at this time that I'm sure all the members will join in expressi ng to all those hundreds of voluntary citizens who make up the Canadian Mental Health Ass ociation and who are doing such a wonderful job in assisting government bodies throughout Canada in the development of modern attitudes towards mental illness·, and espec ially in the Province of Manitoba_ where I think our Manitoba Division of the Canadian Mental Health Asso ciation have done such w.onderful work, both through their Share J:>rogram and their Rehabilitation Facility on Lombard Street in Winnipeg, and as I men­ tioned during the est imates, and was touched upon by the First Minister in the Budget Speech, the assist ance and guidance which they're giving in helping with the rehabilitation of the men­ tally ill.

MADAM SPEAKER: Order for Return. The Honourable the Leader of the Opposition. MR. MOLGAT: Madam Speaker, I beg to move, seconded by the Honourable Member for Lakeside, that an Order of the House do issue for a Return Showing the actual expenses of the Provincial Government for the Community Development Program in the years 1959-60; 60- 61, 61-62 and 62-63 to date, for each of the following items:

(1) Salaries.

(2) Administration and Supplies.

(3) Housing Projects .

(4) Employment Training Emplacement.

(5) Grants to Friendship Centres and other Voluntary Agencies. Madam Speaker presented the motion. HON. J. B. CARROLL (Minister of Welfare)(T he Pas): Madam Speaker, before you put the question, I would like to make sure that this is the program that's being offered through the Department of Welfare rather than a program with a similar name that was operating through the Department of Industry and Commerce and which is now being called, I think, The Regional Development Program. MR. MOLGAT: Madam Speaker, I'm referring to the one dealing with the Indian and Metis population.

I appreciate that some of the figures that I'm asking for are partly in Esti:­ mates but in view of the fact that there are contributions from the Federal Government, it's impossible for me to ascertain the details that I'm asking for from the Estimates, hence my Order for Return. Madam Speaker put the question and after a voice vote declared the motion carried. HON. R. SMELLIE (Minister of Municipal Affairs)(Birtle-Rus sell): Madam Speaker, I move, seconded by the Honourable the Minister of Labour, that Madam Speaker do now leave Page 1704 April 26th, 1963

(Mr. Smellie, cont'd. ) ... the Chair and the House resolve itself into Commi ttee of the Whole to consider and report on the Bills listed. Madam Speaker present ed the motion and after a voice vote declared the motion carried and the House resolved itself into a Com mittee of the Whole with the Honourable Member for St. Matthews in the Chair. Bills No. 6, 8, 9, 12 , 13 , 15 were each read sect ion by sect ion and pas sed. MR. CHAIRMAN: Bill No. 23 is a pretty lengthy Bill. I wonder whether it would be all right to take it page by page . MR. EVANS: This side of the House is, I think, agreeable on that, Sir. MR.

CHAIRMAN: Agreed? MR . EVANS: Does the Honourable the Leader of the Opposition agree ? MR. MOLGAT: Yes, I am agreed. I want to make some comment on

Section 11, page 3. MR. CHAIRMAN: Page 1, passed. Page 2, passed. Page 3, passed ... MR. MOLGAT: Mr. Chair man, I'm not a member of the Municipal Affairs Commi ttee and was not at the Com mittee Mee ting but I wan t to make some com ments now on this section. When the Bill came through for se cond reading I did make comme nts at that time and asked the Minis ter some questions about it. I don't agree with Sec tion 11, Mr. Chair man. This is a sect ion that makes it compu lsory now for all villages with a population of 500 and over to have a consta ble.

I submit that in many cases this is not a practical proposition for these vil­ lages. They do not have people in the area who are able to do this work. They haven 't got people who have the training . They have no means of training them. In most cases from a financial standpoint, it will not allow them to have a full-time constable -- and I think the Min­ ister realizes this , and ce rtainly will make provision for part-time -- but still it will be un­ trained people by and large who will come in as cons tables. I don't see that this adds at all to the law and order of the province.

In fact I think it may detract in some cases from this and I cannot see why the Minister is making this compulsory on these villages . Su rely the councils of the villages concer ned are in a position to judge their own si tuation better than any of us . I submit that there is a wide difference in the need for police protection in different parts of the province .

You take those areas where there is a large transient population where the re may be const ruction work going on on a temporary basis , then the need for police protection is ob­ viously greater than in some of the other sect ions where you're dealing with a stationary popu­ lation -- very often retired people -- in many of our small pra irie towns and that the govern­ ment here is not in a position to judge those needs . The council in the local place is and can decide what they need.

Now if the Minister still after those com ments feels that there is a need for over-all police protection then I would suggest to him that there would be a better approach than this one and that is to make an arrangeme nt with the RC MP. This was discussed by my colleague , the Member for Ethelbert Plains, on se cond reading. Mr. Chair man, it seems to me that at the moment a number of these villages cannot afford the full price of an RCM P cons table .

Would it not be possible for the Provincial Government, if it feels that this is required, and I wonder that it is, quite frankly, but if for reasons that they have which I'm not aware of, we must have protection in these villages, why not.have a levy of some kind either $2 .0 0 per per­ son or $3 . 00 per person across the province on these villages of 500 and more. This would bring in in the case of a village say of 500 , if you had it $2. 00 per person, it would bring in $1, 000. 00.

You can't hire a constable for that purpose but you ca n by equalling this over the province and making an arrange ment with the RC MP -- have them cover those villages, be­ cause in a number of cases the RC MP are short of personnel -- that's true -- but not neces­ sarily always of one full consta ble. Possibly a const able on a part-time arrange ment could do this and where there is a detachment located -- there may be two or three villages in their area -- that they could service by say having one extra constable to do two or three villages, rather than each village having to hire its own.

This would provide qualified personnel. It would provide police st aff that has had training, that is familiar with the laws and is in a posi­ tion to enforce them; it would give some uniformity of enforce ment across the province. What my friend is suggesting here will not provide that; it will add extra cost on these villages and I don't think will do the job that he wants . I would suggest to him that he remove this sec tion April 26th, 1963 Page 1705

(Mz'. Molgat, cont'd, ) ..• at _this time; that he approach the municipalities, the union and the urban associations, and see if they wouldn't come forward with a sugges tion of this type . · i ·· think the suggestion has already been made in the past or some arrange ments like this and if he can get agreement from the villages I think he would provide better police protection for the Province of Manitoba; achieve his purpose and not have this sort of a clause which I think will cause trouble. MR. M. GRAY (lnkster): Mr.

Chairman, I think that I am going to support the Bill and the section, if not for anything else but to try out how a person who has· no police experience can operate -- may be operating in a better way. It's a small town; likely be a local man; he knows the children; he knows the boys and I think he could get along without a quarrel much bet­ ter by talking to them, taking

part in their sports -- and after all the main police protection nowadays in the small towns are not robberies -- maybe sometimes it may -- it's just to keep peace in town and I think it's worthwhile experimenting -- we cannot do it in the big cities -­ it's worthwhile in a small town to experiment one that you could hire without police experience and he'll likely act as a fatherly adviser rather than a policeman. I think it's worthwhile try­ ing it and I am going to support this section. MR. P. J. McDONALD (Turtle Mountain): Mr.

Chairman, I rise at this time; I think that I have at least a little experience in this particular bill and I can't agree with the Leader of the Opposition, the Honourable Member. I know that in our constituency of Turtle Mountain we have several, like in Boissevain, they have an excellent man. He is the utility man for the town and it makes a contact for the RCMP; and also in several of the other small towns they al­ ready have their man appointed. They don't have to be fully experienced. They're men with authority though and they can contact the RCMP when there's help needed.

I think that it is very important that they have a contact man in a community. MR. MOLGAT: . . . . . permit a ques tion? Could he tell me the population of the town he's referring to? Can he tell me the training that the individual he refers to has had in police work? MR. McDONALD: Well this particular gentleman is the utility man and there 's about 1200 people and in Cartwright, its 600 and they have the same agreement in that town. MR. SMELL IE: Mr. Chairman, in most of the villages and towns that will be affected by this sec tion of the Act, they already have some town employee who could undertake the duties.

In many cases the duties of a chief constable may be those of enforcing the local by­ laws , traffic control, perhaps keeping the bicycles off the sidewalk and this sort of thing. It doesn't necessa rily require a full-time employee in most of these towns and villages. Under the pre vious

section of the Act where it was permissi ble, the villages said "we don't have to have any chief constable, we have not respons ibility in this matter because the province em­ ploys the provincial police" -- and when we woUld suggest to them that this was a local matter for a town with a population of over 500 and that the provincial police would not undertake this re­ sponsibility. My honourable friend from Ethelbert Plains knows this ; he knows that the RCMP will not undertake this contract. They don't want this res ponsibility.

He knows too that where in a town or village where they have a chief constable, if that chief constable runs into diffi­ culties of any kind the RCMP will come in and assist him . They will assist particularly in the enforcement of the provisions of the Criminal Code, but they have to have someone there on whom they can rely; someone whom they can contact, and in actual operation most of these towns and villages will take some person who is already in their employ and will officially ap­ point him as the chief constable for the village.

This emp loyee can carry out the resp onsibili­ ties of looking after local by-laws an_d that sort of thing. If there are any serious law enforce­ ment problems he will call upon the RCMP for their assist ance and it will be gladly given; but in the first instance the local chief constable will be the person first charged with the admin­ istration of the law in that particular are a. One of the reasons why the RCMP don't want this res ponsibility is that they don't want to be res ponsible for example for traffic control in villages . They can't possibly have a full­ time constable there.

The local village can instruct their own chief constable as to how strict they wish him to be in the enforcement of local by-laws , traffic control and this sort of thing; how many hours they wish him to spend in a day on duties of this nature and so on. This is not going to impose any real hardship on the towns and villages concerned. At the present time Page 1706 April 26th, 1963

(Mr. Smellie, cont1d. ) .•. they have this respons ibility. Some of them feel because of the sec tion in the Act that they are going to be looked after otherwise. We have found it in some cases difficult to impress upon them that the provincial police will not accept this res ponsibil­ ity and the change in the Act is only so that they will know clearly and without ques tion that this resp onsibility is their own and that the provincial police will not look after it in the first in­ stance -- they will only come in if they're called in, if the chief constable of the village or town is in difficulty. MR. M. N.

HRYHORCZUK, Q. C. (Ethelbert Plains): Mr . Chairman, I completely agree with what my honourable leader has said and I completely disagree with what the Minis­ ter has said. I think this is a mistake and it'll only be a matter of a year or two before we know it is a mistake. The personnel that should be the peace officers are not in these small towns and you are forcing the councils of these small villages to appoint men who are unquali­ fied who could do more harm in the way of law enforcement than they will do good.

Insofar as our agreement with the RCMP is concerned, I' m quite sure that if you entered into a financial arrange ment wit h these villages where the detachments are situated, that the RCMP would un­ dertake to do this work. After all is said and done; after all is said and done, Mr. Chairman, an agree ment under which the RCMP works for this province is an agreement which is mutual­ ly agreed upon and I'm quite sure that if the province insisted in a change in the present agree­ ment to allow for that type of policing it would go in.

On the other hand, I' m also sure that if the Honourable the Attorney-General gave instructions to the RCMP force in the Province of Manitoba that they are to police these sma ll towns they would be policed. Insofar as assi stance is concerned, there'l l be ho more assistance from the RCMP after we have these chief constables than there is at the present time, and it isn't only a matter of enforcing the by-laws of the local villages, it's a matter of enforcing the law in general, the Highway Traffic Act and every other pr ovincial statute which has to be enforced.

And I say that we'll be making a big mistake and we'll realize it -- I hope that too much damage is not done before we do realize that this provi­ sion is wrong and it's not going to help law and order and the enforcement of law in the Pro­ vince of Manitoba, but is going to hamper it, and very likely hurt it. MR. LYON: Mr.

Chairman, I'm in the happy position of being able to agree unequivo­ ca lly with my colleague the Minister of Municipal Affairs, and surpr isingly enough to agree somewhat with the Honourable Leader of the Opposition and the Honourable the Member from Ethelbert Plains, although not -- I agree with them in their philosophy -- but not as to the hard facts of the situation as we find them today. And I'll attempt to explain why I find myself in this position. Basic ally the purpose of this amendment to The Municipal Act is merely to bring the law into harmony with the actual facts of the situation in Manitoba today.

The facts of the situation in Manitoba today are these; that we have an ag reeme nt with the Royal Canadian Mounted Police at Ottawa, Provincial Policing Agreement, which agreement, by the way, was signed by my honourable friend the Member for Ethelbert Plains and has been renewed on a year to year basis since then. In fact it might have been signed by one of his predec essors be­ cause it is an agreement of some years' standing. And under that agreement, as has been stated in the House, the RCMP by contractual arrangement refused to police the villages of the size that are mentioned in the amendment before us.

They contract their services for the pur­ poses of a provincial police force. That is the arrange ment that we have with the RCMP, an arrange ment of long standing, and an arrangement that from time to time discussi ons have been had upon, not only here in Winnipeg with the D Division Headquarters, but as well in a conference that I participated in in Ottawa some two or three years ago at the call of the Minis­ ter of Justice.

Now, that being the situation, there is no arrangement that can be arrived at outside of the contract with the RCMP because I can tell my honourable friends opposite that they have flatly refused to enter into such an arrange ment. Their sugges tions that we get the RCMP to enter into some cost-sharing, or that we enter into some cost-sharing arrange ment with the villages and then, pursuant to our contract, assign RCMP personnel to these villages is certainly not a novel idea.

I thought of it in 1958 when I had only been in the department for a couple of months and tried it on for size with the RCMP and received a definite and a flat "no". The other arrange ment with the RCMP with which I'm sure members opposite are familiar, is that whereby municipalities can contract directly with the Federal Government in April 26th, 1963 Page 1707

(Mr. Lyon, cont1d. ) ... order that they may employ RCMP constables as town or village de­ tachments. The province is a party to those agreements but the financial arrangements are -­ we act more as a clearing house for the agreements than anything else, and the financial ar­ rangements are directly between the municipalities on the one hand and the Department of Jus­ tice, the RCMP at Ottawa, on the other hand. And I may say that the financial arrange ments accorded to the municipalities are less favourable than those which are accorded to the pro­ vinces under the Provincial Policing Agreement.

So those are the two means whereby RCMP may be used in Manitoba: 1) As a provincial police force under contract with the province. 2) A municipal contract directly between. the municipality and the Federal Government, with the province signing the agreement as a par ticipating and an authorizing partner only. Now, my honourable friend from Ethelbert Plains says that if the Attorney�General were to tell the RCMP that they must police villages of 500 or less, they would do so.

I beg to disagree with him, because under the contractual arrangements they are not under any obligation to do so, and notwithstanding any order that I might give them to do so, they would quite properly, I think, come back to me and say, "Fine, we'll be happy to do that, Mr. Attorney-General, if you will get the agreement amended. " Now, the cost-sharing arra ngement -- I've already mentioned that.

The obvious way to get around this as has been mentioned on the other side, at first blush would appear to be to make some cost-sharing arrangement between the province and one of these small villages whereby the province would them create a provincial police detachment in the village on the unders tanding that the constable -- and this is hypothetical -- on the unders tanding that the constable would devote say half of his time to provincial policing and half of his time to muni­ cipal policing. This is a good idea.

I thought of it three or £our years ago -- and I'm not try­ ing to take any credit -- I think it's a good idea, and this is why I say that I agree with my hon­ ourable friends opposite. But try to get it implemented! Because we have . I've spoken to the Minister of Justice; I've spoken to the Commissioner of the RCMP; I've spoken to the various assistant commissioners that we've had here, and the answer is no.

And I'll tell you why: be­ cause the RCMP have found out that in providing provincial police forces for eight of the ten provinces of Canada as they do, with the exception of Ontario and Quebec, they feel from a financial and a fiscal standpoint that they are in a losing proposition.

As a matter of fact,. as I mentioned two years ago; or was it three, the then Minister of Justice convened a meeting of all of the Attorneys-General from the provinces where provincial arrange ments were extant on the RCMP, with the purpose in mind of trying to get a new contract with better financial provi­ sions for the Federal Government.

And I want to tell my honourable friend that along with the rest of the Attorneys-General of Canada who were involved, we put up a pre tty stiff fight, and we said no, we would sooner stay with the contract we have than have you imrose upon us a much more financially onerous and burdensome contract, which is what they were proposing at that time. As a result, the meeting broke up with there being no agreements between the provinces and the Federal Government, and quite frankly we were happy, having had some idea of what the Federal Government plans were, we were happy to rema in with the contracts �:�s they were.

Now, recently within the past year to 18 months , I have had dealings in my office with two villages, or two areas in Manitoba, one being Souris and the other being Lac du Bonnet, where they were willing to enter into a municipal contract with the RCMP. They had tried other forms of policing. In the case of Lac du Bonnet the Provincial Police Detachment at Lac du Bonnet had actually been providing on an "as and when" basis a form of town policing in Lac du Bonnet.

But we soon found -- and I'm sure the Honourable Member for Lac du Bon­ net will bear me out on this -- we soon found in our discussi ons with the RCMP that they were doing really more for Lac du Bonnet than they were certainly required to do under the contract.

But the interesting thing is this, that when those two towns made application to Ottawa for the privilege of entering into a municipal contract, which you will remember is the more financi­ ally burdensome contract than the provincial one, they were turned down flat by the RCMP as a matter of policy because they are apparently not entering into any more municipal contracts across the country, their feeling being that these again are money-losing contracts for them and that they have put a complete closure on this type of contract, with the result that even though their applications were supported by myself, supported by the government to the RCMP at Ottawa, the reply back was no, that they would not provide even the municipal form of Page 1708 April 26th, 1963

(Mr. Lyon, cont'd. ) .•. contract. At that time and earlier I had had discussi ons with D Divi­ sion, I'm sure it was at that time , with this idea of cos t-sharing in mind, and saying to them, "WelL now, this is per haps a way that we could perhaps change the terms of the contract with­ out getting into some subs tantial alterat ions of the contract itself, " and again the answer was no, that that couldn't be done because of course, it would be somet hing that was never connoted under the contract itself and it would be a distortion of the terms of the contract itself.

So, I want to assure my honourable friends opposite that the reme dies or panaceas that they offer have been thought of, have been tried, and there is just, at the present time there is no cha nce, as I see it, for this to come about. Comi ng back to the amendment then, we suggest that the amendment should be passed because, as I said, initially it does reflect what the ac tual practical situation is in Manitoba today. Now, for a moment, to deal with their question about the form or the quality of the poli­ cing in Manitoba, and here's where I agree with them.

Here's where I agree that we should have , we should be working toward -- and I think in concert with the RCMP we should be trying to work toward some form of schooling, some form of arrangement for the future, either to have these village constables trained through an accredited police school such as the City of Winnipeg Police Department operate, or through, perhaps, facilitie s that may be operated by the RCMP.

I have had some very general discussi ons, and I won't try to dress them up as be­ ing anything more than general discussi ons with the C. 0. of D Division Headquarters in Winni­ peg on this precise topic, because, of course, it is a subject that arises and is extant in all provinces in Ca nada where there is no provincial police training unit suuh as Ontario has for the training of their own people. So I do want to assure them that we are not unmindful of the problem. We think that they do touch a point when they say that there is some necessi ty to train people who may go into the policing field.

But at the same time the negotiations that we have had to date, at least, with the RCMP having been fruitless along the lines that they have suggested, I think that we have no alternative but to pass this amendment as it appears and to keep in the future working towards some policy that will be in accord with what they think and what I think should be the situation for long-term policing of small hamlets and villages in Manitoba. MR. MOLGAT: Mr .

Chai rman, I couldn't let this opportunity of seeing the Attorney­ General in such an agreeable mood -- he's not only agreeing with his colleagu es , he's even partly agreeing with us . This is a "red letter" day and I have to pass com ment on this. Mr. Chair man, the Minister told us that the RCMP were prepared to make arrange­ ments with the municipalities direc tly. This I think was his first state ment. -- (Interject ion)-­ Yes, but then they no longer are prepared to ma ke' any contracts of any kind. MR. LYON: With the municipaliti es. MR.

MOLGA T: But they are prepared to have a contract with the Provincial Govern- ment. MR. LYON: We have one. MR. MOLGA T: Yes, we have one, that's right. Now, surely the suggestion ma de by the Member for Ethelbert Plains , if the RCMP will not entertain new contracts with municipali­ ties then let's approach them to have a change of contract with the province . Because here are the problems that aris e. My honourable friend is going to make a change in the law making it comp ulsory for villages to have constable s. Surely what he should do is approach the govern­ ment.

He says he's approached the Minister of Justice. I'd like to point out to my friend that there's a new Minister of Justice, There's a change in Ottawa. There 's a new spirit abroad and I'm sure if my honourable friend were to get to work now, before passi ng these comp ulsory regulations make another attempt under the new circums tances , to see if we can't arrive at some mutual understanding .... MR. JOHNSON: Mr . Chair man, the Leader of the Opposition has mentioned the new Minister of Justice in Ottawa.

May I take this wonderful opportunity of asking the Leader of the Opposition to pursue the promise of the former Liberal Minister of Justice that all those com munities on the borderline edging on where we have permanent Air Force Stations such as Gimli should recei ve the RCMP services of one full-time constable at Federal Government expense, in view of the impact of such stations on the local com munity, and now that we have April 26th, 1963 Page 1709

(Mr. Johnson, cont'd. ) • . • the new Minister I'm sure that in view of the previous promises the Leader of the Opposition will give every assistance to our communities in this regard. :MR. MOLGAT: I want to assure all the ministers that if they have problems that I can assist them with, I'll be very happy to use my good offices in that manner . MR. J. H. BILTON (Swan River): Mr. Chairman, I hes itate to enter into this debate. The Attorney-General has pretty well outlined the situation, in which I entirely agree.

The Honourable Leader of the Opposition pointed a finger of fate at me, so I thought I may say some­ thing. I come from an area where we do have the Mounted Police. We have seven of them in fact. Three of them are devoted to the area surrounding Swan River and the situation is such that it may be a 60 -mile drive from one end of the area that they cover to the other. We have small villages with these town policemen, and what do the towns want ? They want a man that they can turn to in time of trouble; a man who quickly has access to the Mounted Police -- and that has happened time and time again.

I'm sure villages with a population of 500 .and less could not afford what the Mounted Police are asking for a man which is in excess of some $4,0 00 annually. Are we going to call upon the Mounted Police to take over these areas to act as dog-catchers, and infractions against the liquor laws, and traffic infrac tions in these small villages which these constables are quite capable of taking care of?

And as I said a moment ago, with the Mounted Police accessi ble at all times , night and day, I can think of no more ideal situation for these villages, and we have one in our area which is very, very anxious to have a town policeman, and we'll get one. The Attorney-General was speaking of a training per­ iod, or training of these men at some ultimate date. I would suggest to the Honourable Leader of the Opposition that this is going on with the volunteer firemen. They're brought in from time to time -- trip around the countryside and trained, and the same thing could apply to these village constables.

Thank you very much. MR. HRYHORCZUK: In the first place we're overlooking one very important fact and that is the RCMP will do all what the Honourable Member for Swan River sa id they'll do if the population in the village is below 500. Now insofar as the statement by the Honourable the At­ torney-General is concerned, he's in complete agreement with us on -- he only does not agree with us on one point and that is the financial arrangement .. He tells us that Ottawa will agree to supply RCMP personnel for the purposes we ask for, but they are losing money.

That's why they do not want to -- (Interjection) -- Oh, yes, 'that's what you said. It was on account of a financial arr angement that we didn't get this , that they were losing money. When you tried to get it at Lac du Bonnet they said, "Well, under those circums tances we're losing money; we won't put a man in there. " That was the reason you gave, and if that is the only reason, then I say that this particular matter jus tifies further expenditures by the Province of Manitoba if necessary.

After all is said and done our police force is an important part of the services that the province has as an obligation, and if it's only a matter of money, Mr. Chairman, I certainly don't say that this is an objection that we should look at as insurmountable . :MR. LYON: ...• happy to hear that new doctrine of flamboyancy in the expenditure of money coming from the Liberal Opposition -- (Interjec tion) -- a doctrine which is an ex-­ tremely foreign one, may I say, and a strange one to come to my ears, "because if it's only a matter of money", says my honourable friend, "well let's go ahead and <lo it.

" I shall remem­ ber those words . They shall rema in emblazoned on my mind for years to come. I want to tell my honourable friend, though, and I think it was an honest misunderstanding that he has of my remarks. What I said was that these two areas , Lac du Bonnet and Souris , had been re­ fused municipal contracts but there had been never any suggestion by the RCMP that they were willing to renegotiate the total municipal contracts in Manitoba. This was not the purpose for which we had di scussi on some two or three years ago.

The purpose for which we had discus­ sion was for the renegotiation of the provincial contract which has, as my honourable friend knows, absolutely nothing to do with the municipal contracts. They're two separate arrange­ ments altogether, and the RCMP's attitude on municipal contracts has been "no more of them;" no ques tion of negotiation or anything at all. On the provincial contracts they said "We think you've got too good a deal. We don't want to give you any more people provincially -- for a provincial police force. We want to renegotiate on new terms," and the attitude unanimously of all of the A.

G's of Canada was that the present financial arrangements and operations that Page 1710 April 26th, 1963

(Mr. Lyon, cont1d.) ... . we had with Ottawa, were very good when we got a peek at what Ottawa was offering to subs titute, and so we as a group let the Minister of Justice know in no unequivocal terms wha t we thought of his proposal for a new