ISSN 0542-5492 Second Session - Thirty-Second Legislature of the Legislative Assembly of Manitoba DEBATES and PROCEEDINGS 31-32 Elizabeth II Published under the euthorlty of The Honourable D. Jame• Walding Speaker VOL. XXXI No. 50 - 2:00 p.m., WEDNESDAY, 20 APRIL, 1983. Printed by the Office of the 0-s Printer. Province ot Mlltlitoba

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

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

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

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LEGISLATIVE ASSEMBLY OF MANITOBA Wednesday, 20 April, 1983. Time - 2:00 p.m. OPENING PRAY ER by Mr. Speaker. MR. SPEAKER, Hon. J. Walding: Presenting Petitions . . Reading and Receiving Petitions . . . PRESENTING REPORTS BY STANDING AND SPECI AL COMMITTEES MR. SPEAKER: The Honourable Member for River East. MR. P. EY LER: Mr. Speaker, the Committee of Supply has adopted certain resolutions, directs me to report the same and asks leave to sit again. I move, seconded by the Member for Radisson, that the report of the committee be received . MOTION presented and carried.

MINISTERIA L STATEMENTS AND TABLING OF REPORTS MR. SPEAKER: The Honourable Minister of Northern Affairs. HON. J. COWAN: Mr. Speaker, I have a statement on a Clean Environment Commission Order for Simplot. There are copies being distribut ed.

While it is not usual to indicate that orders have been issued by a Ministerial Statement, because the Member for Turtle Mountain requested information on this last year and at that time I indicated in the House that a public hearing would be held, I felt that it would be appropriate in this instance to announce the results of the public hearing and the Clean Environment Commission and the appeals which have been made after that to the House by way of this statement.

I would like to inform the House that I have directed the Clean Environment Commission to issue a new environmental control order to regulate emissions to the air from Simplot Chemical Company Limited of Brandon. Notification letters were hand delivered today to all parties affected by the order. I have also had an opportunity to speak directly to a number of the parties affected by the order over the lunch hour. This new order requires the company to limit downwind concentrations of ammonia to two parts per million when averaged over a one-hour period.

Exceptions to this restriction will be allowed only in the case of equipment breakdown, process upset, plant shutdown, start-up or power failure. The order is a result of public hearings last July and September which were held in response to complaints from local residents about ammonia emissions. Recommendations were then forwarded to the government for review and appeals to several of these recommendations were received from Simplot, the Brandon Industrial Commission and Atom-Jet Industries Limited at Brandon.

I have carefully considered these appeals, especially with regard to the two parts per million limit for ammonia. I do not anticipate that this limit will have a detrimental impact on the economic viability of the company and at the same time, I am confident that it will provide adequate protection against nuisance odours for nearby residents. In order to ensure compliance with this requirement, Simplot has been instructed to install a continuously operating monitoring station by January 1, 1984.

Data from this station will be forwarded to my department on a monthly basis and will complement data we are already receiving from our air monitoring station at Assiniboine Community College. In addition, Simplot is required to install a scrubber, flare system or implement abatement measures to collect and control ammonia gas emissions from a number of sources from the plant.

The new order also limits the emission of nitrogen dioxide, sulfur dioxide and solid particulate matter. lt requires Simplot to notify my department as well as the City of Brandon if accidental circumstances result in the emission of these or other contaminants above the prescribed limits. I'd also like to mention that I have directed the Clean Environment Commission to hold further public hearings in July and October of 1983 to review the company's progress in achieving compliance with the new order.

In addition, at the October hearing the commission has been asked specifically to review Simplot's ability to meet the upper level for the emissions affecting residential areas, that of course being the two parts per million limit. Mr. Speaker, I'm certain this new order will assist in solving the problems experienced with ammonia emissions to the satisfaction of all concerned. Thank you. MR. SPEAKER: The Honourable Member for Turtle Mountain. MR. B. RANSOM: Mr.

Speaker , there may be others who would not share the same confidence the Minister has in hoping that this will solve the problem to the satisfaction of all concerned. Indeed, it is to be hoped that is the case, but from my knowledge of the situation there may be some serious concern as to whether or not Simplot can indeed meet these restrictions being placed upon them.

I'm glad to see, therefore, that the Minister is going to hold further hearings to see whether in fact Simplot is able to meet these requirements, but it is to be hoped that the process of pollution control, necessary as it may be, does not progress to the point where the balance is tipped in favour of maintaining an environmental quality that is so high that people therefore begin to lose their jobs as a consequence of that. So I would hope that Simplot will be able to meet these standards without resulting in the layoff of people 1918

Wednesday, 20 April, 1983 at a time when there are so many people unemployed in this province, Mr. Speaker. MR. SPEAKER: The Honourable Minister of Natural Resources. HON. A. MACKLING: Yes, Mr. Speaker, this is a report from the Water Resources Branch as to spring runoff conditions and prospects as of April 20th. The Assiniboine River: River levels have risen about one foot upstream of Virden since yesterday due to the snowmelt of the past few days. Downstream of Virden, river levels are declining. With normal weather conditions the peak is expected at Brandon on April 30th.

The Souris River: River levels are declining very slowly. With normal weather conditions they will continue to decline slowly. Agricultural flooding will likely continue from the International Boundary to Hartney until late in May. The West Lake-Dauphin-Swan River Area: Most streams are just beginning to flow. Rapid increases in river levels are expected during the next few days. Peaks on most streams are expected to occur between April 23rd and April 25th. The runoff potential of the area has been somewhat reduced due to very favourable weather conditions since April 1st.

Latest predictions call for possible minor flooding on only the Valley and Wilson Rivers. Localized flooding is possible on most streams if ice jamming occurs. This is based on the present weather forcast of no significant precipitation and normal temperatures for the next three to four days. Weather: The weather pattern is essentially stable. Sunny, mild weather is expected to continue for the next three or four days. Temperatures in snow covered areas around Dauphin, Swan River, and Yorkton should reach 10 to 12 degrees celcius for the next few days, with overnight lows of O degrees to plus 2 degrees celcius.

Winds will be light; this will reduce the melt rate somewhat, particularly in dense tree covered areas. The melt rate in western Manitoba and eastern Saskatchewan will likely be somewhat above normal and similar to that of 1974 and 1979. MR. SPEAKER: The Honourable Minister of Highways. HON. S. USKIW: Mr. Speak er, at this time I would like to simply mention that I will be tabling the Instruction Program of the department while we're in the House, since we are going into committee in about half-an­ hour, so we will have the distribution in the House. MR. SPEAKER: Notices of Motion . . . Introduction of Bills ...

INT RODUCTION OF GUESTS MR. SPEAKER: Before we reach Oral Questions may I direct of honourable members to the gallery where we have 60 students of Grade 11 standing from the Warren Collegiate under the direction of Mr. Shadlock and Mr. Wiebe. The school is in the constituency of the Honourable Member for Lakeside. There are 70 students of Grade 5 standing from the Chancellor School under the direction of Mrs. Banki er. The school is in the constituency of the Honourable Member for Fort Garry. On behalf of all of the members, I welcome you here this afternoon. ORAL QUESTIONS Jobs Fund - federal funding MR.

SPEAKER: The Honourable Leader of the Opposition. HON. S. LYON: Mr. Speaker, I have a question for the First Minister with respect to the Jobs Fund and the attempts by this government to create jobs for the 54,000 people in Manitoba who are unemployed at the present time. Mr. Speaker , last night in the Budget delivered by the Minister of Finance in Ottawa, we heard word of a $4. 8 billion Job Creation Fund, which by rough mathematics, if one works it out proportionately for Manitoba, it would seem to indicate on the capital side that there would be available to Manitoba something like only maybe $30 million.

If the figure is higher, I'm sure we would be pleased.

But given that would be the rough ballpark area of about $30 million available to Manitoba in the first of the four years for this fund, given the fact that my colleague, the Member for Turtle Mountain, has indicated that there is only $18 million of Manitoba budgetary money in the so-called $200 million Jobs Fund that the Government of Manitoba has put up; can the First Minister give some indication to us, first of all, as to whether or not he's had any indication as to whether this is the extent of the federal joint participation with the province in job creation for this year? MR.

SPEAKER: The Honourable First Minister. HON. H. PAWLEY: Mr. Speak er, I thank the Leader of the Opposition for his question. We have not had any indication as to what kind of announcement, the nature of the announcement, the nature of the projects that the Federal Government has in mind insofar as Manitoba. It would be my understanding that the Minister responsible for Manpower would be making an announcement, as the regional minist er, within - I don't know whether there has been a precise announcement, as to the date of his announcement, but we'll have to wait for his announcement as to precise detail. HON. S.

LYON: Well, Mr. Speaker, given the Budget constraints that appear to be applying to Manitoba as a result of the Federal Budget of last evening, can the First Minister indicate to us at this stage how many of the projects on his Wish List that he filed at the time he announced the Jobs Fund, how many of those projects can we expect sharing upon with the Federal Government, if any at all? HON. H. PAWLEY: Mr. Speak er, probably I could assist the Leader of the Opposition by mentioning that every province in Canada submitted a so-called "wish list" with the exception of the Government of Alberta, to 1919

I Wednesday, 20 April, 1983 the Federal Government; that it is not only Manitoba HON. H. PAWLEY: Mr. Speak er, there had been but each government in Canada with as I say the discussions with the Federal Government insofar as a exception of the Government of Alberta, at the request co-operative effort between the Federal and the of the Finance Ministe r, Mr. Lalonde. Provincial Governments insofar as monies required to We will have to await the announcement by the modernize the Manfor operations.

Also, as the Leader Minister as to whether or not any of the proposals that of the Opposition is aware, we are anxious indeed to were outlined in the list as requested by them have encourage any private investor partnership insofar as indeed been accepted. the Manfor operation. Those options are options that HON. S. LYON: Mr. Speak er, a second supplementary on that same point.

In view of the fact, Sir, that there was no overt reference at least that I picked up in my monitoring of the Budget Address last evening, to sharing in job creation with the provinces on the scale that the First Minister is speaking about - and I hasten to add that it is a scale I think that all members of the House would tend to support - in view of the fact that there was no such overt mention in the Budget, to my recollection, what will be the nature of the response that we could expect from the Minister of Immigration and Manpower on Friday or Monday next, in view of the fact that there was hardly any mention at all about joint sharing on job creation in the Budget last evening?

HON. H. PAWLEY; Mr. Speak er, I would like to first remind the Leader of the Opposition that the Federal Minister of Finance did commend those provinces that had launched some job creation programs of their own. I'm sure that the Minister of Finance at the federal level had in mind Manitoba as one of those provinces that had provided that kind of initiative. Mr. Speak er, I am somewhat hesitant to comment as to the results from the Budget insofar as Manitobans who have given the regional Minister an opportunity to make his announcement. I am hopeful, Mr.

Speak er, that there will be substantial commitment insofar as Manitoba is concerned. I think, insofar as the overall nature of the Budget, that I share with the Leader of the Opposition, disappointment that there is not an overall greater commitment as to the job creation that is necessary in order to ensure that there is restoration of consumer confidence so that we can proceed then to a climate of greater investor expansion; disappointed to that extent overall.

But I'm not yet prepared to say that I'm disappointed where Manitoba is concerned because I think it's only fair and right that we await the announcement by the regional Minister. HON. S. LYON: Mr. Speak er, a further question to the First Minister on job creation and joint projects. This morning the Minister of Immigration and Manpow er, Mr.

Axworthy, was heard to say on a local radio program that with respect to Manfor at The Pas, when he was questioned about that, that negotiations had been under way with respect to the sale of the company to private interests and that he couldn't respond any further because this was in the field of the Federal Department of Forestry.

Can the the First Minister give us any indication, either arising out of last night's Budget, or otherwise, as to whether or not there is any progress to report with respect to large capital injections into Manfor with federal participation and private money being involved as well, a continuation of the kinds of negotiations that were going on in 1980 and 1981? we are seeking. Insofar as further detail, I think it would be more fitting in order to give a more comprehensive answer to take the details of that question as notice on behalf of the Minister responsible. Federal Budget tax changes HON. S. LYON: Mr.

Speak er, a question to the Minister of Finance. Last evening the Federal Minister of Finance announced the number of tax deductions which I'm sure would be welcomed by most Canadians. My question to the Minister of Finance of Manitoba is whether or not his department has worked out any preliminary estimates as to how these tax deductions announced last evening in the Federal Budget will affect the revenues of the Province of Manitoba in the current fiscal year? MR. SPEAKER: The Honourable Minister of Finance. HON. V. SCHROEDER: I thank the Leader of the Opposition for that question.

Last night, in fact , my officials were indicating to me that there were no changes, and this morning after working through the numbers, they have told me that there are indeed changes. They relate to such items as the right of individual taxpayers to deduct child care expenses and that sort of thing. There a number of those kinds and other deductions which will, according to the Estimates of the department, cost us approximately $10 million in provincial revenue. On the other side, however, they feel that there's an approximate similar offset in increased taxation.

For instance, they point out with respect to the investment tax credits, people will take advantage of them to reduce their federal tax liability and in the immediate years following those decisions, they will probably not take capital cost allowance, thereby they will increase their provincial income tax payable. So they view the two as offsets and in addition, of course, if the Federal Budget is stimulative, then there would be additional income taxes, sales taxes, etc., recovered as a result of that portion of the Budget. MR. SPEAKER: The Honourable Leader of the Opposition. HON. S. LYON: Mr.

Speaker, we thank the Minister of Finance for that preliminary review of the impact of the Budget and we appreciate, on this side of the House as I know his staff appreciate, that it's difficult in 24 hours to get anything but an estimate. But could the Minister of Finance, Mr. Speak er, undertake to give us notice as and when his department has had more opportunity to review the large number of changes that were proposed in terms of individual corporate tax incentives and tax deductions, could he give us the 1920

Wednesday, 20 April, 19 83 undertaking that as and when firmer figures come out from that review, that he could make them known to the House so that we would be in a position as we continue with the Estimates of expenditure of this government, to have a running total so to speak, with respect to the deficit for the Province of Manitoba which is already in the area of $580 million? HON. V. SCHROEDER: Mr. Speaker, yes, when I have updated information with respect to the effects on provincial revenue of the Budget, I would be pleased to present it to the House. Federal Budget - Housing starts MR.

SPEAKER: The Honourable Member for Tuxedo. MR. G. FILMON: Thank you, Mr. Speaker. My question is for the Honourable Minister of Housing.

In view of the announcement in last evening 's Federal Budget of a one-month extension to the $3,000 grant for new home construction, and in view of the statement last week by the President of the Manitoba Home Builders' Association, that despite a major increase in housing starts in Manitoba in the first quarter of this year, they are still expecting the overall annual starts to be well below the normal annual average, is the Minister expecting to bring forward any announcement of additional provincial assistance for new home construction? MR. SPEAKER: The Honourable Minister of Housing. HON. J.

STORIE: Thank you, Mr. Speaker. First, with respect to the member's comments about the housing starts being below the average. I'm of the understanding that the present housing starts are the second best in the last 10 years for this time of year. With respect to the second part of his question, staff is currently reviewing the situation, trying to determine what effect the extension for one month - the extra $30 million - will have in the long term for the construction industry.

Clearly there are a number of builders out there who have continued to put in foundations on the basis of the assumption that this program was going to continue on at somewhat greater length than what has been announced, and it certainly would be the province's position that it would have been a desirable thing. However, we will be analyzing the situation and trying to assess what impact that short extension is going to have and how it will affect the overall impact of the Affordable New Home

Section of the Homes in Manitoba Program. MR. G. FILMON: Thank you, Mr. Speaker. Would the Minister not agree that the major increase in starts for the first three months of this year is due primarily to the fact that the $3,000 grant was available; and in view of the fact that it's not going to be available beyond the end of May, is the Minister not prepared to give some commitment to bring forward some additional provincial assistance? A MEMBER: He's not prepared to do anything. HON. J. STORIE: Mr. Speaker, of course we're going to look at it.

What I was suggesting is, I assume that the Federal Government is of the opinion that there is enough impetus out there in the building, and particularly the home building industry, to carry on beyond the May 30th deadline. What we're trying to do now is to assess the final results of that to the cutback in that grant, and to determine what action if any is required on the part of the Provincial Government to ensure that the home building industry maintains its impetus over the next nine to twelve months. MR. G. FILMON: Mr.

Speaker, I would hope that the Minister would take a longer-term view than just looking and complimenting himself for the first three-month increase because I would remind him that during times in the past - and I can recall one year during the time that I was Minister - that we had a 643 percent increase month over month for one month of the year. MR. SPEAKER: Does the honourable member have a question? MR. G. FILMON: So this is a long-term problem. So, is the Minister prepared to look at it and assess it as he says?

More than that, is he prepared to take some action, if indeed action is warranted on this matter? HON. J. STORIE: Mr. Speak er, that is exactly what I had indicated to the member would happen. I said we were assessing the situation and that implies that action will be taken if it's required. Mr. Speaker, I recognize the point that the member is making. It is indeed true that the construction industry is an important indicator of how well our economy as a whole, is doing.

We are very cognizant of the fact that we want a strong house building industry in the province and I can assure thP­ honourable members opposite that we will be doing whatever is necessary to ensure that that's maintained. Deer Lodge Hospital - takeover MR. SPEAKER: The Honourable Member for Fort Garry. MR. L. SHERMAN: Thank you, Mr. Speaker. In view of the absence of the Honourable Minister of Health, whom I understand is ill and certainly we regret that situation, and in view of the absence of the Acting Minister of Health, I direct my question to the Honourable First Minister.

I would ask him whether, in the wake of its takeover by the province from the Federal Government, he can confirm that Deer Lodge Hospital is now experiencing serious considerable and very painful staff difficulties and very serious problems of staff morale. MR. SPEAKER: The Honourable First Minister. HON. H. PAWLEY: Mr. Speaker , I'll take that question as notice. Employment - seniority MR. L. SHERMAN: I appreciate that, Mr. Speaker, and because of the conditions that I outlined in the 1921

Wednesday, 20 April, 1983 introduction of my question, I would like to ask the First Minister a number of questions which he may want to take as notice at the same time. I'd like to ask him whether he can confirm that people with as much as 10 to 17 years experience are being forced out of their jobs. I would like to ask him whether he can confirm that people with as little as one and two years experience are being placed in top and next to top level jobs, supervisory and assistant supervisory positions.

I would like to ask him whether he can confirm that this is a design to keep the budgetary costs of the hospital low? And whether that reflects much consideration from a so-called labour-oriented government for workers who have put in 10, 12, and 15 years in their positions?

I'd like to ask him whether elderly veterans in the geriatric wards of the hospital - and essentially it is, as the First Minister knows, a geriatric facility - are being forced now to adjust to new nursing staff, and the nursing staff itself is being forced to adjust to new situations because one- and two-year personnel have been put into jobs in the geriatric sections of the hospital that have been in the past occupied by senior experienced nursing personnel? There are a range of questions of that nature, Mr. Speaker.

In fact, the basic question remains: Can the First Minister confirm that staffing problems are in turmoil at Deer Lodge Hospital, and that the morale of staff and patients is very, very seriously disrupted in the wake of the provincial takeover? MR. SPEAKER: The Honourable First Minister. HON. H. PAWLEY: Mr. Speaker , I appreciate the questions that the Member for Fort Garry has posed to me and in order to provide an appropriate response, I will have to take those questions as notice .

I encourage the member that if he has any further questions to certainly not hesitate to contact me in the absence of the Minister of Health. Consumer Price Index MR. SPEAKER: The Honourable Member for St. Norbert. MR. G. MERCIER: Mr. Speaker , in view of the absence of the Minister for Consumer Affairs I'll place my question to the First Minister. In view of the drop in consumer prices in March of this year, Mr.

Speaker, across Canada from 7.4 percent to 7.2 percent, while the prices in Winnipeg rose by 1.5 points to 7.3 percent, which is above the national average, can the First Minister assure the people of Manitoba that consumer prices will be reduced and that we will return once again, in the City of Winnipeg, to having the lowest price index increase, as we did in 19 81 under the Progressive Conservative Government? HON. H. PAWLEY: Mr. Speaker , I don't have the data in respect to 1982, but it's my understanding that we compare very, very favourably with other centres in '8 2 as well, insofar as '82 over '81 . Mr.

Speaker , one has to of course take these calculations on a year-by-year basis. MR. G. MERCIER: Well, Mr. Speaker, going on a year­ by-year basis the

article refers to the fact that the increase in the sales tax by the government to 6 percent, also higher prices for other articles such as gasoline and tobacco products brought in by the Budget of this government are the main factors in the very significant increase, putting the City of Winnipeg above the national average in consumer price increases.

Can the First Minister advise what action he has taken in order to reduce the impact of government action, which is the major factor in contributing to the high increase in consumer prices in Winnipeg, particularly in view of the fact that consumers in Manitoba very shortly will be facing an increase in Manitoba Hydro rates brought in by this government and an increase in Manitoba Telephone System rates? HON. H. PAWLEY: Mr. Speaker , I thank the Honourable Member for St. Norbert for that question.

It gives me an opportunity to point out that the Budget in Manitoba was introduced prior to any other provincial budget being introduced in Canada. No other budget as of the first of March had been introduced in Canada with the exception of the Manitoba Budget. Mr. Speaker , it would be interesting to note just what changes take place insofar as consumer price index in other provinces subsequent to their budgets .

For example, insofar as Alberta is concerned with the implementation of their $20 per diem charge in respect to hospital beds and 50 percent increase insofar as medicare premiums are concerned in the Province of Alberta, it would be interesting to note the upward influence that those measures will impose upon the Alberta CPI. It would be interesting, Mr. Speaker, to check insofar as the upward pressures that are brought to bear in the Nova Scotia CPI as a result of a cut in assistance to the municipalities in the Province of Nova Scotia by some 25 percent, or indeed, Mr.

Speaker, insofar as the pressures that are brought to bear as a result of very nominal increase, 2 or 3 percent by way of assistance to universities, to school divisions and municipalities in the Province of Saskatchewan. In summation, Mr. Speaker, there was a budget that was introduced in Manitoba, the first Budget in Canada; the other provincial budgets are now forthcoming, Mr. Speaker, subsequent to the Manitoba Budget so that SOME .HONOURABLE MEMBERS: Oh, oh! MR. SPEAKER: Order please. The Honourable First Minister. SOME HONOURABLE MEMBERS: Oh, oh! MR. SPEAKER: Order please.

If members wish the question period to proceed, they perhaps should listen to the answer that is being given. The Honourable First Minister. HON. H. PAWLEY: Mr. Speaker , the point that I'm making spells out the reason very, very clearly for 19 22

Wednesday, 20 April, 1983 calendar-year by calendar-year comparisons when all the factors consistent and in a controlled fashion in relationship to any comparison of CPI . MR. G. MERCIER: Mr. Speak er, is the First Minister promising and guaranteeing to the people of Manitoba, as he did in the fall of 1981 when he made a number of promises, that in this particular area Manitobans can rest ass ured that under this government we will return once again to having in the City of Winnipeg, in Manitoba, the lowest CPI increase as we did in 1981? Is he making that promise, Mr. Speaker? HON. H. PAWLEY: Mr.

Speak er, the honourable member can rest assured that this Manitoba Government will do all that is possible within its jurisdiction and with its financial wherewithal to insure: (

a) That the consumer price index is kept on a very favourable basis insofar as all other parts of Canada; (

b) Mr. Speaker, that we do, indeed as we have succeeded, in reducing the level of unemployment, despite these hard difficult times for all Canadians, in relationship to other parts of Canada, and that we've reduced the unemployment rate from the third lowest to the second lowest in Canada, unlike the situation under the previous Conservative administration in Manitoba. Un employment rate MR. G. MERCIER: Mr.

Speaker, I wasn't going to ask another question, but in view of that answer I wonder how the First Minister can make that kind of statement when we have more than 30,000 more unemployed people in Manitoba than we did in the fall of 1981, and when we have the consumer price index in the City of Winnipeg above the national average, when we're the lowest in Canada in 1981, Mr. Speaker. Those facts themselves speak more about the First Minister's statement than any answer he's made so far. HON. H. PAWLEY: Mr. Speak er, the Member for St.

Norbert attempts to examine the Manitoba situation in isolation from that which occurs throughout Canada. HON. S. LYON: That's what you did for four years. MR. SPEAKER: Order please. HON. H. PAWLEY: Mr. Speak er, we have called repeatedly on this side for clear and decisive policies, Federal Government-wise. We have undertaken policies on our part, Mr.

Speaker, insofar as Manitoba is concerned; policies that have been clear and have been consistent in regard to fighting unemployment in this province, despite the tough situation throughout, by the extent of the increase in capital construction, 1982 over 1981; by the extent of increase re hospital, personal care home construction in Manitoba, 1982 as compared to 1981; insofar as the job creation effort is concerned in the Province of Manitoba. Mr.

Speaker , despite the tough times, there is not a moment that passes by that my colleagues and I share concern insofar as the unemployment situation in Manitoba, and that is why we have left no stone ������������������� unturned, insofar as policies relating to employment and relating to the reduction of unemployment in our midst. Mr. Speaker, I think that can be credited with some of the reason for the fact that we have reduced the unemployment through combined effort from the third to the second lowest . . . HON. S. LYON: You have increased the unemployment rate. There are 30,000 more unemployed.

Who are you trying to hoodwink now? MR. SPEAKER: Order please. The Honourable First Minister. HON. H. PAWLEY: ... Mr. Speaker , that we were able to enjoy the second-best job retention in 1982 of any province in Canada. I think it also contributes to the fact that, according to Statistics Canada projections, Manitoba will have the third-best record insofar as total investment in Canada of all provinces, 1983 over 1982. loan Guarantee Program MR. SPEAKER: The Honourable Member for Pembina. MR. D. ORCHARD: Thank you, Mr. Speaker.

In the absence of the Minister of Agriculture, I would ask the First Minister a question that I posed to the Minister of Agriculture some three weeks ago. I asked the Minister of Agriculture if he could provide the House with the method by which the $100-million Loan Guarantee Program will be used by the lending institutions who may have to collect on the 12 . 5 percent guaranteed by the government. Will the banks be allowed to collect only on a prorated base on an individually failed loan, or will the entire loan value be covered by the 12. 5 percent guarantee of MACC? MR. SPEAKER: The Honourable First Minister.

HON. H. PAWLEY: Mr. Speaker, if the honourable member has asked that question and the Minister of Agriculture accepted the question as notice, then I'm sure the Minister of Agriculture will be responding. MR. D. ORCHARD: Mr. Speaker, the reason I am raising this issue with the First Minister is obviously because we have a financial crisis looming with certain farmers in rural Manitoba who are depending on that program. Surely the First Minister would be able to direct and instruct his Minister of Agriculture to find out how his program works. The program was announced two months ago.

Three weeks ago, I posed the question; I still haven't received an answer . Now, if the Minister of Agriculture and the First Minister's government are doing so well and know so much about what they are doing, why can they not answer a simple question like that which was posed three weeks ago? HON. H. PAWLEY: Mr. Speak er, I am wondering if that was a question or a speech by the Honourable Member for Pembina. I don't know what your assessment, Mr. Speaker, of that would be, as to whether that is a political speech relating to the Minister of Agriculture as a question being directed to the First Minister. 1923

Wednesday, 20 April, 1983 Mr. Speaker, I am indeed fortunate, as First Minister in Manitoba, in having a Minister of Agriculture who does not require instruction from anyone; a Minister of Agriculture who is moved by his own sense of commitment to the farmers of Manitoba to do all he can within his powers, jurisdictionally and financially, to assist the farmers of this province during their difficult time. Mr. Speak er, I do not need to instruct my Minister of Agriculture in that respect. HON. S. LYON: He doesn't know much about farming. British Columbia election MR.

SPEAKER: The Honourable Member for Turtle Mounta in. MR. B. RANSOM: Mr. Speaker, my question is for the First Minister. During recent days, there seems to have been fewer people in the halls of the Legislative Building. Could I ask the First Minister how many people on the payroll of the Government of Manitoba have gone to British Columbia to participate in the election? MR. SPEAKER: The Honourable First Minister. HON. H. PAWLEY: Mr. Speaker, no one that is paid through public funds, on public expense, is in B.C. There may indeed be - (Interjection) - Mr.

Speak er, there are I am sure, a number of New Democrats in different levels of service, whether it be government or private enterprise, who are going to participate in the election in B.C . on their own expense, on their vacation time or on leave of absence . MR. B. RANSOM: A further question to the First Minister. From how many levels of government are there NOP employees participating in the election in British Columbia? HON. H. PAWLEY: Mr. Speak er, I don't know what the member is referring to.

I do know that much of the Davis machine apparently is in the Province of British Columbia assisting the efforts of the Bennett Government to assume re-election. HON. S. LYON: Probably some of Andropov's machine is out there as well . SOME HONOURABLE MEMBERS: Oh, oh! MR. SPEAKER: Order please, order please. The Honourable Member for Turtle Mounta in. MR. B. RANSOM: A final supplementary to the First Minister. Could he confirm that he is Premier of the Province of Manitoba? MR. SPEAKER: The Honourable Member for Elmwood. MR. R. DOERN: Mr.

Speaker, I would like to direct a question to the First Minister and ask him whether it's true that the members of the Progressive Conservative Party of Manitoba were specifically requested to stay away from the election in British Columbia. HON. H. PAWLEY: Mr. Speaker , I gained the impression when I was in British Columbia, yes, some three weeks ago to participate in an election rally that there was a sense in British Columbia that the Government of B.C. was in some difficulty and that situation could only be worsened in British Columbia by the attendance of any Conservatives from the Province of Manito ba .

MR. SPEAKER: The Honourable Member for Arthur. MR. J. DOWNEY: Mr. Speaker, a question to the First Minister. Is it true that the only competition he had to become the Leader of the New Democratic Party was the Member for Elmwood? MR. SPEAKER: Order please . May I remind all members on both sides of the House that questions SOME HONOURABLE MEMBERS: Oh, oh! MR. SPEAKER: Order please. I remind all members on both sides of the House, questions should be concerning matters that are within the administrative competence of the government. Oral Questions - the Honourable Member for Arthur. Bankruptcies - farmers MR. J.

DOWNEY: Mr. Speaker, I have a question to the Minister of Finance in absence of the Minister of Agriculture. Yeste rday, it was an admission by the Minister of Agriculture that he was depending on the Federal Government to introduce measures that would help the farm community. What measures in last night's Federal Budget will help Manitoba farmers, Mr. Speaker? MR. SPEAKER: The Minister of Finance. HON. V. SCHROEDER: I'll take that question as notice for the Minister of Agriculture. MR. J. DOWNEY: Mr.

Speaker, in view of the fact that yesterday's admission by the Minister of Agriculture that while in excess of 100 farmers were facing bankruptcy or receivership, how many of those farmers will be helped by the Federal Budget of last night? HON. V. SCHROEDER: Thank you, Mr. Speaker. I'll take that question as notice for the Minister of Agriculture. Seat belt legislation MR. SPEAKER: The Honourable Member for La Verendrye. MR. R. BANMAN: Thank you, Mr. Speaker.

I direct my question to the First Minister and would ask him, in light of the fact that many Manitobans feel strongly that the wearing of seat belts and helmets should be left up to the individual choice, will the Premier allow his backbench and his Cabinet colleague to vote according to and in the manner that their constituents 19 24

Wednesday, 20 April, 1983 would wish that they would? In other words, will he allow a free vote on the seat-belt and helmet legislation? MR. SPEAKER: The Honourable First Minister. HON. H. PAWLEY: The legislation that will be introduced is a government bill. MR. R. BANMAN: So, Mr. Speaker , despite the concern that several of the NOP members have expressed with regard to their own problems in their constituencies that they will not be representing the real concern of their constitue ncy, even despite that, the Premier will not allow a free vote on this issue. Is that correct? HON. H. PAWLEY: Mr.

Speaker, the principal concern that this government has in regard to the package of measures that will be introduced re the helmet legislation, the seat-belt legislation, the child-restraint legislation is a reduction of the present high levels of death and injury on our highways. Levels of death and injury that are altogether too high, Mr. Speaker; levels, indeed, that cost the taxpayers of the Province of Manitoba millions of dollars that could otherwise be headed off. In view of all these reasons, Mr.

Speaker, safety for the cost to the health care system, this is an item that we have to take the bit by the teeth and proceed with. MR. R. BANMAN: Well, Mr. Speaker, in light of the fact that many people feel that the choice whether or not they wear the seat belts or wear the helmets should be left up to the individual, and that the state in all too many instances already controlling and telling people what is best for them, would the Minister not agree that personal habits such as smoking or the use of alcohol is a much larger cost on the provincial purse than many of these other things?

Is the Minister saying that he is now going to move into other areas of telling people what's good for them and what they should be doing? HON. H. PAWLEY: Mr. Speaker, it's possible that the member is not aware of the fact that to drive while intoxicated is indeed a criminal offence and is dealt with under the courts of the law of the Province of Manitoba. There are millions of dollars spent through the court system, through the law enforcement system, and through the police in the Province of Manitoba to prevent those that are intoxicated from indeed using the highways of this province, Mr. Speaker.

Ind ian land claims MR. SPEAKER: The Honourable Member for Turtle Mountain. MR. B. RANSOM: Mr. Speaker , my question is to the Minister of Northern Affairs. Under a formula which had been followed by the Lyon government and by the Schreyer government, there were some 70,000 acres of outstanding claims to Indian bands in Manitoba. The Minister has a report which recommends that those claims be settled on the basis of some 800,000 acres. Can the Minister report what progress he has made to this point in arriving at any settlements? MR. SPEAKER: The Honourable Minister of Northern Affairs. HON. J. COWAN: Mr.

Speaker, I have had one formal meeting with Mr. Ray Cheni er, of the Federal Government, acting on behalf of the Federal Government, and Chief Jim Bear acting on behalf of the Treaty Land Entitlement Chiefs of Manitoba. We have reviewed that particular issue among other issues and other recommendations of the report which was presented to us. We have not resolved the issue as of yet.

We've discussed a number of options and we have indicated to each other that we would hope to be able to bring forward a package which would involve several policies in respect to transfers of land within a six­ month period from that meeting, and that would leave us about four months left in which to enter into those discussions and hopefully resolve that outstanding issue. MR. SPEAKER: Order please. The time for Oral Questions having expired, Orders of the Day. ORDERS OF THE DAY MR. SPEAKER: The Honourable Government House Leader. HON. R. PENNER: Thank you.

I move, seconded by the Minister of Municipal Affairs, that Mr. Speaker do now leave the Chair and the House resolve itself into a committee to consider of the Supply to be granted to Her Majesty . Mr. Speaker , there has been some change in the batting order. We normally would be proceeding with Health Estimates in the House, but we'll be continuing with Finance, to finish, one hopes, Finance today , and they will be followed, at whatever point Finance is finished, by the Estimates of the Minister of Education in the House.

As per the order, the Estimates of the Minister of Highways will be proceeding in committee this afternoon. MOTION presented and carried and the House resolved itself into a committee to consider of the Supply to be granted to Her Majesty with the Honourable Member for River East in the Chair for the Department Finance, and the Honourable Member for Burrows in the Chair for the Department of Highways and Transpo rtation. CONCURRENT COMMITTEES OF SU PPLY SUP PLY - HIGHWAYS AND TRANSPORT ATION MF!. CHAIRMAN, C. Santos: Will the committee please come to order.

The committee is now considering the Budget for the Department of Highways and Transportation. We shall start the proceedings with the traditional opening statement from the Minister responsible for Highways and Transportation. The Honourable Minister. HON. S. USKIW: Mr. Chairman, members, it's indeed a pleasure to be back introducing the Estimates of the 1925

Wednesday, 20 April, 19 83 department, albeit we recognize that times aren't as good as they used to be, given the fact that we are looking at somewhat reduced involvement in terms of departmental spending as a proportion of the provincial spending Estimates for this year. But before I get into the main text of my comments, I would like at this time to take a few moments to give recognition to Joe Brako, who has been our Deputy Minister for a good number of years, appointed by Premier Schreyer to this department somewhere in the early Sevent ies.

Joe has been with the Government Service for pretty well most of his working life. I believe he had an interruption only to serve on Canada's behalf in World War II, and of course on coming back completed his education and took on his role within the Government Service, and I believe at that time within the Department of Highways. He's been involved in other departments as well throughout the course of those years, but in the last decade or so, has been with Highways.

I want to make mention of the fact that during the period of Peter Burtniak as Minister , I had the opportunity to work with the department then and certainly with Joe then, so I speak with some degree of background and experience with respect to my appreciation for the fact that Joe has contributed greatly to the efforts of this department over the years. I think it would be wrong in not making mention of that, given the fact that in the wisdom of government we are going to again change his responsibilities as of June 1.

As you know there has been an announcement that there will be some shuffles of Deputy Ministers, effective June 1, and it does involve Joe Brako going over to Government Services, and Government Services of course coming over to Highways. So this is indeed the last opportunity that we have as a committee, to recognize Joe's contribution to the highway system in Manitoba, to the service that it provides to the people of Manitoba and certainly to the many Ministers who served in a number of governments over the years.

I just wanted to express the hope that I share the feeling of all of those who are here, in wishing Joe well in his new ventures in the Department of Government Services after June 1. Mr. Chairman, the people of Manitoba and indeed the tourists that travel through Manitoba, I am told, take good advantage of our highway system. In fact, it appears that they do about 2.8 billion vehicle miles annually in this province. It gives you some idea of the magnitude as to the use of the highway system.

Of course, that is why it's important to continue with our repair, maintenance and reconstruction programming that is designed to keep improving the highway systems in the province in order to provide the public with a better and more convenient means of commuting back and forth from their workplace to home and so on, as well as the touring public that wants to see so much of what we have here in Manitoba. The highway system is made up of 4,200 miles of paved surface; 2,300 miles of surface treatment and about 5,300 miles of gravel surface roads.

That gives you an idea of just where we are in terms of the level of service. One of the aims of the department has been and continues to be the need to reduce the miles of gravel surface. In order to do this, of course, we must improve grades. We must widen highways; highways 19 26 that were built under different conditions and with different standards many years ago, and we must strengthen those highways and bridges that cross the various waterways throughout Manitoba. We must strengthen them to a standard that meets the requirements of today and indeed the future.

A dollar invested in the highway system today is not invested only for the day or for the year, but indeed is expected to service the public for many , many years to come. I'm told that about 36 percent of the Construction Program is essentially dealing with those aims. Highways that receive paved surfaces, of course, unfortunately are not able to last forever without a lot of maintenance. Many of our highways are approaching 20 years since they were last surfaced. They can only be brought back to an acceptable condition by reconstruction. About 36 percent of our program is aimed in that direction.

It is also important that the highways facilities which carry large volumes of traffic be modernized to increase safety and reduce delay, and I simply want to refer to ongoing projects such as what we are completing on Nos. 1 and 12, and of course the project that we started a year ago on Highway 75. That has to do with the recognition of the fact that we have to make sure that the funnel highways, if you like, into major urban centres such as Winnipeg, have a high-standard highway system and a safe highway system. Four-laning, of course, is always in that category where you have a high density of traffic.

The work of the Highways Branch is carried out through several divisions and I don't think I need go into them. I'm sure members are familiar with what they are and if they are not, of course, we will have an opportunity to deal with them as we go through the Estimates. I think we should remind the committee that in 196 5 the province entered into an agreement with the municipalities with respect to the road system in Manitoba, where we took over a lot of roads from the municipalities or from their jurisdiction and made them provincial roads. These were the main market roads.

We have some 7,700 miles of P.R.s in total. Of that 7, 700 miles - and this is something I think the committee should keep in mind because it has a great bearing on understanding the needs of the department - of the 7,700 miles that were taken over by the province as P.R. roads, 4, 100 of those miles of those roads have not been improved upon since they were taken over.

So we have in essence, in rural Manitoba, many municipalities which are saying to us, hell, the roads were in better condition when we had them and the Department of Highways did nothing for our communities by taking them over and assuming the responsibility for them. So it gives us an idea that we've got more than half way to go in order to upgrade the roads that we took over away back in 196 5 to a reasonable provincial standard, and that certainly is no small undertaking. There are approximately 1,074 miles of P.T.H. s that are, what we call, in a backlog position.

We're going to add another 1,960 miles into that category within the next few years so that we will have about 3,000 miles of P.T.H. s which are already deficient and behind

schedule for reconstruction or resurfacing. That also gives you an indication of the problems that we are

Wednesday, 20 Apr il, 19 83 running into by piling up a backlog of needed work throughout the highway system in the province. Now this is not peculiar to Manitoba. Many of you may have witnessed the story on American TV networks where they have shown that they will have to spend trillions of dollars in order to catch up with their highways' upgrading in the United States simply because they have not maintained their spending levels over the many years.

So we are very much in the same position as other provinces and indeed as the United States are in with respect to each year falling further behind with minimum requirements of maintaining highway standards. Perhaps many people, many members of the committee don't appreciate the point, but the assumption on the part of many people is that when you pour concrete, once you have done it you don't have to do it anymore. Or when you lay asphalt, pavement, that once the road is black-surfaced or hard­ surfaced, it looks black, that you indeed have a road that will last forever.

I simply want to remind you that it used to be that we expected a lifetime of 25 years of service out of concrete pavement at one time, and about 15 years for asphalt pavement. Those figures are coming down with the increased utilization of the road system and we are now looking at asphalt as having a life span of 13 years, after which it is earmarked and slated for resurfaci ng . That's how we arrive at the backlog of mileage that has to be caught up with at some point in time.

The longer that is delayed, of course, the greater and the more critical the problem becomes in the future which means that at some stage, if we are going to catch up with the program, there will have to be massive increases of spending in this department . Now I don't believe this is a reflection on any one particular government. I believe during the 60s and the 70s there were major thrusts made in highways improvements, but economics changed so quickly and the demand factors have changed so much over those years that we were just not able to keep up with it to the extent that is reasonable and satisfactory.

We find that we are going to be running into a very serious problem in the not too distant future. Asphalt surface treatment, to those who are not familiar, usually has about a 10-year life span, but usually requires a resurfacing about 5 years after original application. So when you see your various construction crews working on AST roads, you know that it's one of those heavy maintenance programs that's under way.

Now AST roads were originally intended to serve as an interim or short-term, in other words, dust-free road system with the expectation that before their life of 10 years has run out, that they in fact would have been by that time surfaced by either concrete or asphalt and that, of course, is also the area that we have fallen behind in more and more each year. As members are aware, the department has within it the Motor Vehicles Branch and I want to impart some information with respect to its operation with respect to some statistical data that may be of interest to the committee.

The number of drivers within the province has increased by a mere 1.3 percent in 1982. The total of licence suspensions, however, were 21 ,087 suspensions in 1982, an increase of 6.2 percent. So our suspensions are increasing faster than our total driving public numbers. That might be of some interest and value for us to know that. Suspensions are imposed for convictions under the Criminal Code of Canada, for failure to pay fines, cancellation of probationary licences, failure to pay for a licence or insurance premiums, as well as for multiple offences resulting from show cause hearings.

During 1982, the Criminal Code of Canada convictions decreased by 12 percent for a total of 5,453 convictions, and that's a good sign. Convictions registered under

Section 236 of The Criminal Code of Canada, which is the blood alcohol content of .08 or higher, which annually comprises about 60 percent of the total, declined significantly by 16 percent, so there's a very good measure of progress in that area and perhaps public education is doing something there. I don't know whether the penalties that are imposed play a larger role there or whether it's more public awareness, but certainly a combination of those two factors is bringing down those numbers.

Convictions for offences related to improper operation of a motor vehicle under The Highway Traffic Act decreased by 11. 5 percent in 1982, for a total of 106,980 convictions. That figure is of some interest, I'm sure. Speeding offences accounted for 58.6 percent of that total and that indicates one particular area where we still have a problem. A decrease of 1. 1 percent in motor vehicle accidents resulted in 19 82, a total of 38,380. The number of fatal accidents decreased a substantial 26. 5 percent, from 170 in 198 1 to 12 5 in 1982.

The number of lives lost in these fatal accidents decreased by 27. 3 percent to 144 from a total of 198 in the previous year, and that's certainly a pleasant piece of information to receive. Snowmobile accidents decreased by 13. 2 percent, from a total of 68 in 1981 to 59 in 1982. The number of injured victims decreased by 11. 8 percent to a total of 45 fatalities resulting from snowmobile accidents; it's decreased by 60 percent to a total of 2. Bicycle accidents increased by 7. 7 percent with the total number of accidents recorded being 292.

Fatalities resulting from bicycle accidents decreased 87 .5 percent from 8 in 198 1 to 1 in 1982. Now, I'm sure everyone is aware that all of this has to do with education, regulations, safety programs, all of which we are very much involved in as a department, along with the Manitoba Safety Council and others. During 1982, a program introducing personal licence plates for Class A-1 passenger vehicles was initiated in Manitoba. Members might want to know the progress of that particular program.

It's a program, by the way, that allows for a combination of alphabetic and numeric characters, according to the vehicle owner's preference, and within guidelines which assure that personalized plates are distinctly different from standard plates. The response to the program has been more than expected . To date, 6,637 applications have been received; a total of 3,233 plates have been approved and manufactured; 2,203 applications are still pending.

Members are also aware of the fact that in the course of the last year, we undertook a major policy review of the motor transportation system in Manitoba - the motor vehicle regulations that the Motor Transport Board must deal with. We have set up a departmental task force to review the role of government and regulation of trucking buses and inter-city delivery. 19 27

Wednesday, 20 April, 19 83 We have produced a background statistical paper which was issued, I believe, in March. There will be a green paper detailing current regulatory practise, problems being experienced and possible options open to the government will be issued sometime this spring. Public hearings will then be held and inputs solicited to obtain opinions and recommendations from interested parties. The task force will then synthesize inputs and make a final recommendation to myself, which will eventually lead to the drafting of a white paper and introduction of new legislation.

The aim is to have that ready for the next Session of the Legislature. In that connection, I want to make the point that very helpful to me has been the Chairman of the Motor Transport Board on those issues. He's a member of the task force, but has brought to my attention all of the difficulties that we have inherited because of the dated regulatory system that we function under and the frustrations that are so apparent within the Motor Transport Board itself. I also want to take a moment to point out that Manitoba played a key role with respect to the transborder trucking issue.

The impasse that we were involved with respect to the American freeze on issuing operating authorities, which has been resolved, I believe, to everyone's satisfaction. I want to compliment our Chairman again for playing a vital role at the staff level. Indeed we all were involved, both staff, and ministerial people from across the country, and from the United States were involved in bringing resolution to that issue. Mr. Kinley is also following up on committees that are overseeing the system in order to prevent a recurrence of that kind of a problem.

He's also chairing a national symposium on regulatory reform, which I believe is going to be held next fall. So there are many things happening with respect to the motor transport industry in Canada, in this province in particu lar, and I think it's good to note that we have the confidence within this department that has resulted in Manitoba playing a vital and leading role in these issues for the country as a whole and indeed for our international relations. The task force has just begun - well not just begun - has begun their work as of last December, and we will be reporting our progress as we go along.

There's no doubt in my mind that we will have to be mindful in whatever recommendations are brought down of how those recommendations are going to relate to other jurisdictions, and how they may be complementary to other jurisdictions in their application. In that connection, I would like to point out that every province in Canada either has or is undertaking a review of their regulations at the present time and we really don't know what the end result will be.

But whatever it is we believe the timing that our report has, we believe we will be in a position to reflect on what is already taking place in a number of jurisdictions and hope that we can work within a system nationally that compliments one province to the other and one country to the other to the extent that that's possible, practical and indeed desirable. Members opposite and members of the government, of course, do not have to be reminded of the current status of the statutory grain rate question and I'm not going to dwell on it at this time.

We all know where we are at and hopefully through the involvement of Western Canadian farmers and Western Canadian governments we might bring some resolution to that issue in the very near future. With respect to freight policy, the province is preparing a multidepartmental proposal for an action program to stimulate economic activity at Churchill. The province is prepared, of course, to cost-share this program and of course is inviting the Federal Government to participate . I might mention in that connection that John Rea's Shop has been doing excellent work in that connection and in many other fields .

It's an arm of government that is not only beneficial to this department but indeed to the whole government system. We have a very capable team of people in that department and we're very proud that they were able to put out for us for our consideration the necessary policy initiatives based on very in-depth studies and analyses over the past year.

With respect to the transfer of costs to the province resulting from branch line abandonment we've had some indication, although it's verbal I believe from the Federal Minist er, that they are willing to seriously consider the issue and maybe revise some of their thinking with respect to how we are going to handle that questi on. Here we have to deal with the question of different modes and this is where John Rea's Shop can play a very important role for us.

We believe that trucks and trains should be complimenting each other rather than competing with each other and hopefully out of dialogue with the Government of Canada and their Transportation Department, that we might come up with a more rational approach to the question of how we handle the transportation of bulk commodities and in particular, the off main line areas. We are also involved with the question of minimum compensatory rates for shipping of canola products.

That's an issue that's been with us for a good number of years, at least as far back as I can recall, and the department is working closely with the canola crushing industry in order to negotiate an equitable rate for shipping canola products in the context of federal proposals re grain equivalent rates to Thunder Bay and commercial rates beyond. We are also very much involved with branch line abandonment hearings. The department will be continuing its involvement with respect to the lrwood (phonetic) Subdivision and we may be making appeals relative to lnwood and Winnipegosis.

Now I did distribute before the commencement of our meeting this afternoon - I think you all have a copy of the press statement - with respect to rail bus and I want to first of all in that connection note that it's not an omission on my part but the problem of having not much choice, I would have preferred to make mention of that in the Assembly , but because of the question period and the availability of press, it was awkward to do it in that way knowing that I had to be here at 2:4 5.

We did hold a conference at 1:30 which announced developments in the area of developing a rail bus mode for northern transportation and you might be interested in perusing that press stateme nt . We have become involved in that area about two years ago as a result of VIA Rail's application to terminate passenger service in the whole of Northern 1928

Wednesday, 20 Apr il, 1983 Manitoba and I have to give full marks to again the Transportation Division for having seized on that particular

chapter of our history and promoted the idea of an alternate mode. We are at the stage now where that initiative is bearing some fruit, where we've got a series of committees working, representative of industry, communities, Federal Government, Transport Commission in the Province of Manitoba toward the implementation of a pilot project. The rail bus service is in the area of Thompson, Thicket Portage, Pikwitonei, and then ultimately to Gillam hopefully, if the model proves itself and then the line from Lynn Lake back to Flin Flon and The Pas. Certainly the technology is there for it.

We believe that the Government of Canada is going to look favourably on that. They are most interested and we were impressed with the fact that they are very much involved in this process at this time. We also appreciate the fact that local industry is looking at it. We have a major local industry, the Motor Coach Industries in Manitoba which, if this development takes place, could be the supplier of the rail bus, it would be the maintenance facility that we use and indeed could branch out into a much wider use of this system throughout Canada, Northwest Territories and even beyond this country.

We're hopeful that this will take place as a result of this pilot. So, there may be very significant economic ramifications from this initiative and I'm sure everyone agrees that it would be a major achievement for Manitoba. Alberta and Ontario are also in on these discussions to display their interest because they have very similar problems in their respective provinces. We, of course, are going to continue our vigilance to the role that VIA Rail plays in Manitoba and for the benefit of Manitoba commuters and travellers.

That's a role we have been involved in all along in the past and we are expressing some concerns about what is happening with respect to service to some areas that are of key interest to Manitobans and that process will continue. Members will also recall that a few years ago we introduced - I believe the previous government began that program if you like - the Transporation Assistance Program for the handicapped. We are continuing with that at a level that is meeting the needs of communities in Manitoba.

This year funds from the Urban Transportation Assistance Program have also been used, or are being used to supplement that effort. As you know the Medical Review Committee was established last November. We believe we are now on track with the problems in that area. Total applications that have been received to date by the Review Committee are 74. Of that, 6 were cancelled; 19 were approved; 16 were denied; 6 were deferred for additional medical reports; and 15 are scheduled for hearings; 12 are in the process at the moment. We think we brought things to a reasonable level of expectation in that area.

The Manitoba Safety Council, of course, is a recipient of grants from this department. They have had a relatively active period during 19 82. They have introduced several new programs concerned with highway safety, which included their Fifty-five Alive Mature Driver's Course, School Bus Safety Course and, of course, the Seat Belt Survivors' Club. We believe that all of these efforts, of course, are part of the reason why our statistics are improving in the area of injuries or fatalities.

Continued success of our Defensive Driving Course Seminars is, of course, illustrated by the fact that in 19 82, 3, 583 persons graduated from the course of which 3,008 were referred from the Motor Vehicles Branch and comprised of 161 separate defensive course seminars. That compares with 2,314 and 123 seminars in 1981. Professional Driver Improvement Course was again conducted in 1982 with 467 graduates from 23 separate Professional Driver Improvement Course seminars, as compared with 304 graduates from 21 seminars in 1981.

The total number of graduates from all these classroom driving courses was the highest since 1976 and at present indications are that the 1983 total will be even higher. During 1982, the Manitoba Safety Council Motorcycle Training Program was completely re-organized and, despite the delay caused by the re-organization, the Council was still able to conduct 14 courses in Winnipeg, Virden and the Shilo-Brandon area from which 278 students graduated, as compared with 287 students in 1981.

The course is, of course, being continued for 1983, and will be offered at two additional centres to be established in Beausejour and Portage la Prairie. The Performance Driving Course has not proven as successful as had been anticipated, but is still available should it be desired. The Seat Belt Survivors' Club which was formed towards the end of 1982 is well under way and presentations of membership for persons who have substantiated their claims to be survivors of accidents by use of seat belts will be made shortly.

To belong to this organization, you must have been involved in an accident, so I'm not sure that all of us would want to readily qualify. It does indicate to you that the department and indeed the general public is very much aware of the need for education and total public awareness of the hazards involved with respect to the use of the highway system with the use of motorized power. Mr. Chairman, there are many other areas that I could go into. I think I've gone into a fairly comprehensive list of items that the department is involved in.

I would want to end on one note which I'm sure members will want to dwell on at some point in the course of the Estimates, and that is that the Estimates do reflect a reduction of highway construction programming for this year of some $10 million from the figure that we had last year.

Adding the inflation component, I think that you can appreciate that there is a fairly substantial reduction in construction dollars this year, based on the need for constraints that have been imposed on the government because of deficit financing requirements and the fact that we are so locked in in other major departments for additional spending.

That, of course, will result no doubt - and I don't want to skip that issue because it would be unfair to do so - that will result in reduction of staffing requirements, both within the department and indeed out in the field, because of a substantial reduction in construction activity . So that apart from departmental staff who will have to be redeployed - we say , redeployed, because of the agreement that has been 19 29

J I Wednesday, 20 April, 19 83 entered into with the MGEA - we will have to find alternate work activities for some departmental staff. I'm talking about permanent staff. With respect to what we refer to as departmentals out in the field, those are the people that are hired for specific construction projects. Logically, not as many will be called back to work this year as we had last year, and there will be substantial reductions there, proportionate to the reduction of millions of dollars in the construction program.

I am sure that all of the members are probably going to want to dwell on the fact of reduced programming, but that is a reality of our economic times that we must deal with. I put it on the table forthrightly, Mr. Chairman, because we are not interested in a dialogue around this table that tends to gloss over that partfcular issue. It is there and we recognize it for what it is. Thank you, Mr. Chairman. MR. CHAI RMAN: In accordance with procedural practice in this

section of the Committee of Supply, the members of the committee are now ready to hear the replier's statement from the leading opposition critic. The Member for Pembina. MR. D. ORCHARD: Thank you, Mr. Chairman. Might I begin by offering to the Deputy Minister , Mr. Joe Brako, on behalf of the members of the opposition, our sincere thanks for the number of years that Joe Brako has been a part of the Department of Highways.

I had the opportunity of working with Joe as my Deputy Minister for some two years and I think I can say without question that Joe Brako is probably about as well-known a person throughout the Province of Manitoba and the Government of Manitoba as I know. I don't think anyone has had more contacts with the City of Winnipeg, other departments, the industry with which the Highways Department is closely associated.

I think over the years of service that he has put in with the Highways Department as its Deputy Minister that he has gained the mutual respect of many of those people with whom he has had very long and very straightforward dealings. I certainly want to thank him for his efforts on behalf of the driving public in Manitoba that have been well-served by his stewardship of the department as Deputy Minister for the past number of years. I wish him success when he moves on to his Deputy Minister post in Government Services. Mr.

Chairman, the Minister made a number of comments in his opening remarks and I detected a certain amount of pride that the Minister had in terms of a couple of particular groups that have helped the Minister enormously over the past year with a number of very complex problems, the Tran sportation Division being one of them and, of course, the Chairman of the Motor Transport Board. I must say , Mr. Chairman, that I'm pleased to hear that because I had the opportunity - when I was Minister - of having the Transportation Division brought over to the Department of Highways from Economic Development.

I think that the move has proved very beneficial for the Province of Manitoba because their services, I think, are being utilized much more efficiently now and certainly they have provided, with a very small department, probably some of the major new thrusts coming out of the Department of Highways and Transportation. It gives me no small amount of pride to have initiated that move over, and particularly with the Minister's announcement today about the rail bus experiment in Northern Manitoba.

I can recall very vividly the hearings on the VIA Rail abandonment in Northern Manitoba that were taking place, I believe, in the fall of 1981. The Transportation Division staff certainly put together a lot of work and I still can visualize the picture they brought to my attention of about a 40 or 45 year old rail bus that had been in service, I believe, out to the Lake of the Woods.

They pursued that at the time and we made the recommendation to VIA Rail that they should undertake a study and I'm certainly pleased that the efforts of the department have now come two years later with this rail bus experiment becoming a reality and I think they deserve a lot of credit for spearheading that. In terms of the Chairman of the Motor Transport Board, I have a great deal of confidence in his abilities and what he can do for the Minister.

I know from discussions with the trucking industry, that he was extremely valuable in the dispute with our friend and neighbour to the south, over operating authorities and I think played, no doubt, a major role in having that successfully resolved without, I don't believe, any animosity and any lingering side effects. I know that is to his credit and to the Minister's credit that it was resolved with Manitoba being the spearhead province in that effort. Mr. Chairman, I think it might be interesting to do an historical perspective right now on the Highways Department and highways in the Province of Manitoba.

I think it's fair to say that during the decade of the '60s, that the Province of Manitoba emerged from that decade with probably the best Provincial Road system in the Prairies. It was certainly better than Saskatchewan's or Alberta's at that time. The road system, and here the Minister will certainly and others will accuse me of being highly political, but I think the road system didn't receive from the Schreyer administration, during their eight years, the kind of attention that it needed to maintain its status as the Minister has so diligently tried to point out to us, the needs today.

That was probably one of the major faults of the Schreyer administration, in that they didn't pay attention to the highway system in Manitoba during their eight years. They lived on the banked equity that was put in place during the '60s and they were able to get by for a good part of their eight-year term without a major noticeable deterioration. But that certainly was coming upon them fast during the latter part of their second term.

It was interesting to note that in the last four budgets of the Schreyer administration, that over one-quarter of their construction budget was provided by federal funding and that was the stage it was at when we took over the Government of Manitoba in the fall of 1977; our first budget had approximately 25 percent federal funding. But over a two-year period, that federal funding declined to zero where it sits today.

I am pleased to be able to say that during the four years we were government, that we put a conscientious effort into rebuilding the highway system of Manitoba to bring it back to the standard that it had been at - or tried to bring it close to the standard it had been 19 30

Wednesday, 20 April, 1983 at - in 1969. We did that by increasing the funding at the same time provincial funding was going down, and that was a drain on the resources and money was not easy to come by from '77 through to '81. But we did that and we did it for three major reasons. The first reason, of course, was the condition of the system. The road system was, in a lot of cases, deteriorating. The Provincial Road system that the Minister referred to in his remarks had largely been untouched since 1966 when it was taken over by the province.

It remains more than half in original condition, even today, and a big failure that I think is common knowledge, was that the construction dollar spending in the Highway Department saw very little road construction take place south of No. 1 Highway and west of the Red River and the system had deteriorated in that area, particularly. Now, the second reason that we spent money on roads during our term was, it was part of our economic development strategy.

Our thrust was to try and balance development throughout the province - industry to relocate outside of the City of Winnipeg, or outside of the City of Brandon, requires an excellent road transportation system - an all-weather road system that will not be resticted in the spring so that access to markets cannot be undertaken by truck transportation while spring restrictions are on. We made a number of efforts to attempt to bring our major communities onstream with all-weather, unrestricted, year-round roads.

I think my colleague, the MLA for Roblin-Russell, will attest to the satisfaction there is in Roblin at having an unrestricted road into that community for the first time. A MEMBER: And the Yellowhead. MR. D. ORCHARD: And the Yellowhead route was part of our spending thrust as well. The third reason that we spent money on roads, of course, was that we didn't use the fanfare that maybe we should have, but road construction quite frankly employs people.

If the government is going to be involved in a strategy of using government spending to create jobs to help the economy, we saw the road construction industry as being one which was a major employer. It had a concentration of major and good contractors in this province who rely on a number of suppliers of machinery and equipment and all of those sectors benefited from the increased funding of Manitoba taxpayer dollars that we put toward the road construction system. It was our contribution to government-funded job creation, if you will, for the four years we were governme nt .

I think what we are finding, unfortunately again, with the return of a New Democratic Government in Manitoba, is that they once again are going to neglect the road system. They are changing their priorities away from highway construction into other areas. It appears as if they are once again, willing to let the roads go to pot, or should I say, to potholes and that is unfortunate. I have to take some interest in the Minister lecturing us about the necessity to continue a Construction Funding Program to maintain the roads, to upgrade them.

I wish the Minister had spent that time lecturing 1931 his Cabinet and his caucus, who obviously were instrumental in seeing his construction budget decreased around the Cabinet table and around the caucus table. If the Minister had spent his time lobbying them and lecturing them into the needs, maybe we wouldn't be looking at a reduced construction budget this year.

On this side of the House in the Progressive Conservative Party , we recognize the need for a strong road program in the Province of Manitoba, not only to maintain the system but as a method of employing Manitobans in the construction indust ry, in keeping the service and supply industry that rely on road construction in a healthy condition. It's going to be interesting to watch this government over the next two Budgets that they will probably bring in to see if they continue the downward trend in funding towards the Highways Program.

It's not going to be interesting from the standpoint that when we inherit the government two or three years from now, whenever the election is called, that once again we're going to have to inherit a deteriorated road system that's going to take some attention, at a time when I suspect we're not going to have that great of a fiscal capacity in the province. But necessity is going to dictate that kind of expenditures and this government, by ducking their responsibilities today, are going to load the taxpayers with even more expenditures two, three, and four years down the road.

It's a deferred expenditure that they are foisting upon the people of Manitoba. know the Ministers' problem. Capital construction dollars are the easiest ones to cut out of a Budget. It's even easier when you don't have strong representation around the Cabinet table from rural Manitoba that will defend the road system and the road building program, and defend the Minister of Highways. When you've got an urban-oriented Cabinet that doesn't get past the Perimeter Highway, it's pretty easy to cut 10, 12, 14 million out of the Highway Construction Budget.

That's not in the best interests of the people of Manitoba, and it won't be in the best interest of this government. I hope that next year we'll see an improvement in the level of funding on highway construction. Now, it's unfortunate that the Minister did lose the fight around the Cabinet table on funding for highway constructio n.

That's bad enough, but if we look at the other battle that this Minister lost, it is a double insult to the Manitoba driving public, because not only are they going to be driving on fewer reconstructed and improved roads, but because of this government they're going to be paying more to do it. Gasoline tax is up. Diesel fuel tax is up.

As a matter o! fact in the Estimate of Revenues that were tabled with the Budget the province intends to take 10. 25 percent more revenue from gasoline taxation in the next year; they intend to take 17 .8 percent more diesel fuel taxation revenue; other departmental charges and costs are going to remain approximately the same; Drivers licence fees have increased; the user fees in the highway system are going up at a time when spending on road construction is going down. The total construction and maintenance budget as lumped together in the presentation of the Estimates total $1 53,328,400.00.

That's the total for construction and maintenance. At the same time, I want to point

Wednesday, 20 April, 19 83 out to members of the committee and particularly members in the government just what the level of user fees are in the Highways Departmen t. The Highways Department plans on collecting $94.7 million in gasoline tax this year; they plan on collecting $39 million worth of diesel fuel taxation this year; they are going to collect $36,467,000 in other fees and related charges from the Department of Highways; and this year they are projecting revenues of $1,602,000 from the Federal Govenment in cost-shared programs.

The total revenues from the users of the Highway Transportation System in Manitoba are going to total $171,769,000 this year. That's a full $18 million over what you're spending on maintaining and reconstructing highways in the Province of Manitoba. The users of the system are paying more than the reconstruction and maintenance costs are of the highway system. That $18 million is exactly what it would have taken in the construction budget, when you factor in inflation, to keep the program even with last year.

This government, this Cabinet, and the caucus of the New Democratic Party have decided to make the users pay more than their fair share in the department and have chosen not to put the money of the users of the highways back into development of the highway system. That is the double slap in the face that this government has delivered to the driving public in Manitoba. First of all, you cut the service and then you increase the costs of that service .

If you want to do some additional calculations in the Department of Highways and Transportation Estimates, and if you take out the funding for the Air Division, the Government Air Division, and if you take out the funding for the Marine Division, and if you take out the funding for Northern and Remote Airports, because they're not directly related per se to the road system in the Province of Manito ba. If you take those three areas of funding out, you will find that a full 91 percent of the departmental costs are being carried by user fees of fuel taxation, other fees and charges, and licensing fees.

Only 9 percent of the total budget of the department is being paid by general taxpayer revenues. As I say, $18 million of the user fees are going, not towards reconstruction of the the road that people expect they are paying gasoline tax to achieve. That is sad commentary on the priorities of this government. I would suggest that at the very least what this Minister and this government should be doing is reinvesting the user fees in the highways and transportation system, that should be the very least that they're doing.

They should be spending on maintenance· and construction of highways, at the very least, the $171 million that they're collecting in user fees. That is not the case as I've said, they are spending 18 million less than that. Now, one has to ask a government who prides itself on having a $200 million Jobs Fund, which is already in vast dispute as to whether it's really there or whether it's simply a transfer from other departments, and that indeed the $200 million is really not there.

One has to ask this government and this Minister what another $18 million of construction dollar funding would do for job creation in the Province of Manitoba? How many people would be working in the construction industry this summer with $18 million additional in road contracts going out this year? I would suggest quite a number, and I would also suggest that a lot of those people reside in New Democratic MLAs' constituencies.

When the layoffs hit this summer from the construction industry because the road program is decreased in real terms, as well as in inflationary terms, that you should be getting some phone calls from unemployed highway construction workers in the private sector who are losing this jobs because you are cutting money from the road construction budget, and cutting money that is there. There is $170 almost $171 million of user fees that could be spent on highway construction in the Province of Manitoba. You, as a New Democratic Government, has chosen to take 18 million out of that.

Your constituents are going to be the ones that are unemployed this summer, and I'm going to have some constituents that are unemployed this summer because of that. Yet at the same time you will talk about a Job Creation Fund; you'll talk about having people mow grass and paint fences; and you'll pass up a real job creation opportunity in the highway construction budget that will employ people in long term jobs in the industry and give Manitobans a usable asset at the end of the year.

Your priorities are wrong; your priorities are screwed up; you are not doing a good job of governing the people of Manitoba when you allow this to happen.

I'd like to know where the Minister of Municipal Affairs was around the Cabinet table when this Minister was forced to cut his construction budget, when that Minister of Municipal Affairs represents a rural constituency, and it may be fine that his constituency is getting some roads because he happens to sit around the Cabinet table, but there is an awful big chunk of Manitoba that is not going to get roads because of your decision and you allowing Cabinet to cut that kind of money out of the road construction budget.

There should be a few other embarrassed rural MLAs in the New Democratic Party that have allowed that to happen. Obviously, this Minister does have a problem. He doesn't have any support around that Cabinet table, obviously, to undertake a real job creation program in highway construction, but yet he has a Minister of Finance that's going to push through additional user fees in gasoline and diesel fuel taxation.

I urge my honourable friend, the Minister of Municipal Affairs, not to let it happen next year, to use his power in that Cabinet and give this Minister some needed backup in Cabinet, so that he cannot repeat this next year, so that he can increase the funding next year and get on with providing a road system for the people of Manitoba that they want, they need and they are paying for. We're not asking for something that Manitobans are not paying for. They are paying for it right now in user fees. It's not a "freebie" we're asking.

I want to point out to the Minister that he has got a problem looming and that problem is looming in southwest Manitoba. One of the only things this government has been able to brag about as an area of real economic growth in the Province of Manitoba has been the oil exploration activity and the new production of oil in southwest Manitoba. That was something that was starting up when we were government and we recognized that oil industry development was going to cause a lot of additional traffic in southwest Manitoba on our roads. Those roads are going to take a tremendous beating because of 1932

Wednesday, 20 April, 1983 the oil industry activi ty. That area of the province is going to need special attention in the reconstruction of provincial roads and the provincial trunk highways. It cannot be neglected and it cannot be ignored. Once again, Mr. Chairman, I point out that this government has the oil exploration and production as one of its major bright lights in the province. There is no other industry that's growing faster in the Province of Manitoba.

This government loves the revenue that's coming from the new oil production and I only ask them not to forget that there are real costs to the citizens living in that area in terms of deteriorating road conditions. Those citizens in southwest Manitoba deserve some special attention in road construction over the next several years. If the government is going to take the money out of the oil revenues, then the government is going to have to provide the infrastructure that the industry needs, and that means reconstructed roads.

I haven't had an opportunity to look through the Highway Construction Program to see whether there is any special attention in here for southwest Manitoba, but I indeed hope that the Minister has seen that as a problem and has addressed it in this road construc tion budget. Mr. Chairman, you signalled five minutes, I didn't believe there was a limit on time. MR. CHAIRMAN: There is a limit of 30 minutes. MR. D. ORCHARD: Well, then I'll have to finish my remarks after I ask a question then.

Now, the main problem that was created in the presentation of these Estimates is that when you take the year-over -year, the print-over-print calculations on what was spent last year and what is proposed to be spent this year, you will find that the total departmental spending is down 3.4 percent, or down almost $7 million. But here's the real problem, Mr. Chairman, at the time when the overall departmental expenditures are down 7 million or 3.4 percent overall, you'll find that on average salaries within the department are up 17.6 percent, well over $5.5 million.

Other expenditures related to the Salary categories are only up 2.5 percent for the department or some $800,000 and here's where the money is coming from for those additional salaries. It's coming out of Item No. 7. Expenditures Related to Capital Assets, where that is down a full 6.9 percent, well over $11 million reduction in that department alone, and the largest component of reduction in that is in the actual construction component which the Minister has indicated is down over $10 million or 10 percent last year.

This Minister, because of the renegotiated MGEA contract, is saddled with salary costs that are going up; he is saddled with having to make up those salary costs elsewhere in the depa rtment, so he's had to reduce programming. Now in a normal operation you would expect that as your salaries go up and you reduce your programming that it would take fewer people to accomplish the job, but this Minis ter's hands were tied; not only is he reducing programs, but the MGEA renegotiated contract said he must keep all his staff in place.

That leads to another problem that the Minister has, he's got over 17 percent increase in salaries this year over last and only 2.5 percent more expenditures for that staff to work with. Now, to me, I cannot see how the various divisions and departments of this Highways' Department are going to be able to maintain the same level of activity in Planning and Design, or any of the other groups that are in that department, with only a 2.5 increase in the expenditures that they can undertake. They still have to run vehicles on the road to take core samples.

The cost of gasoline is up; the cost of vehicle replacement is up, but yet, their operating expenses are down. That indicates to me that the Minister is fully recognizing that the department is going to have a lesser level of activity this year. But he's been saddled with a major component of increase in his salaries because of the renegotiated MGEA contract. He talks about redeployment of staff. Redeployment to do what? They're certainly not going to be building more highways, because you've got a 10 percent reduction in the budget.

Factor in inflation of approximately 8 to 9 percent and you've got almost a 20 percent reduction in the volume of work that's going to be undertaken this year. So, what are you going to redeploy the staff to do? MR. W. McKENZIE: Play cards. MR. CHAIRMAN: Is it the wish of the members of the committee to give leave to the Member for Pembina to continue his reply? (Agreed) So proceed. MR. D.

ORCHARD: Now, that has to be causing a management headache for the departmental heads, the district office, the district engineers, because they've got staff that have to be paid, have to be employed and less program for them to work on. It's a joke around the coffee shops in Carman and Morden that the latest joke is that the instruction has come out from the boss - this is a joke among the Highway's employees that are in for coffee - that the word has come out from the boss that if they're going to play cards to get the hell down into the basement so nobody can see them playing cards.

They haven't got anything else to do. So, the Minister's got some problems that he's got to address in this area. I suppose the real pity in this is that while staff levels are being maintained in the Department of Highways because of the MGEA contract, the no-layoff provision of the renegotiated contract, the Minister and his government have been forced to transfer those layoffs to the private sector, because he had to get the money from somewhere and he took it out of the construction budget.

That is a direct transfer of layoffs from the government to the private sector and it's going to happen, it is already happening and it will continue to happen. All you have to do is talk to any of the people in the construction industry and they are not going to be employing their normal complement of staff because they don't have the volume of work to undertake. Now is that an action of a caring government, where they'll transfer layoffs from government directly to the private sector? I think it is not a good action of this government.

It will not fare them well with the citizens of Manitoba and, particularly , will not fare them well 19 33

I Wednesday, 20 April , 1983 with those members and those workers in the private sector who are going to find themselves laid off prematurely this summer because there are no road contracts that they're going to be working on. You know, Mr. Chairman, it's kind of ironic that, at this stage of the game, the NDP Government would decide to cut back their construction funding.

I followed very closely in 1980-81, when volume of work in other construction areas was decreasing and indeed volumes in Saskatchewan and Alberta were not as high, the competitiveness of that private sector industry in bidding was very, very keen. In the summer of 1981, we were getting bid prices on dirt contracts to rebuild our provincial roads that were below the 1977-78 bid prices. Four years later, they were bidding at a better price. That situation exists today and the government could get very good value for additional construction dollars, and I think the Minister knows that.

This is your best time to be putting extra money towards highway construction. You will get more miles of regrading or upgrading of provincial roads today than probably in the last two or three years. The value is there. I can think of no better investment in the future. This government keeps talking about wanting to protect the basic structure of our economy so that when the recovery comes, we can take off from this maintained level of infrastructure and participate in the upturn in the economy.

This is certainly one area that the government is not doing what they say they're doing, because they're neglecting the highways system in Manitoba. They're neglecting it at a time when they couldn't get a better value for the taxpayer dollar. They couldn't get a bigger bang for the buck than they can this summer, because there is slack capacity that could be used and would be bid competitively if the volume of work was there. So I look forward to discussing line-by-line on the Estimates , and finding out what new initiatives are taking place in the Department of Highways, but I have to register , Mr.

Chairman, with you, Mr. Minister, the disappointment we have in that you have lost the battle around the Cabinet table; that you have not been able to at least maintain your program which would have taken, I suggest, probably $108 million or $109 million of construction budget; that you have, in fact, gone the other way; that you have actually lost dollars. This just goes to kind of reinforce the opinion that keeps getting voiced to myself that my colleagues and I have, no doubt, voiced to the Minister and his colleagues in the government.

People are saying today, well, you know, we've got a $500 million deficit; we've got a $600 million deficit coming up. And they're saying, what are we getting to show for it? If we saw a new road being built or if we saw some new drainage ditches being constructed, we could see that at least our deficit was going to give us something in the long run, but they're not seeing that happen. With this Budget and this level of funding, they're certainly not going to see it happen again this year.

So we're going to have this $600 million deficit and no apparent perceived advantage in terms of real tangible assets that the people of Manitoba have bought with the taxes they've paid, and are going to have to pay for as they pay the deficit in future years. That's kind of disconcerting to the people I talked to. It may not be disconcerting to all Manitobans, but a number of people voiced the concern to me that, what are we getting for our deficits? So, Mr.

Chairman, I thank you for your indulgence in allowing me leave to go beyond my 30 minutes, but I wanted to put those remarks on the record because I think that this department is a very instrumental and key department in carrying out the government's proclaimed objectives of job creation, of maintaining the infrastructure and the base of the Manitoba economy so that we can participate in the recovery. This department is probably the one that could do that and contribute more to that than any other department.

It is interesting to note that, with the government telling us that's what their spending programs are going to do for Manitobans, that the department that can deliver it was not given the ability to do that. Instead of the ability to provide jobs in the private sector through highway construction, the construction budget was cut down.

Instead of providing an infrastructure base throughout Manitoba to the towns and communities that want to participate in the recovery when it comes by having a good, reliable, all-weather, year-round road system, some of those communities aren't going to have that because this government has not put the money to it. The government says, it's going to try to redirect money to needed areas. This department would offer it the opportunity to do that. Manitobans don't like paying new taxes, but they are willing to bear their fair share providing the dollars are being used wisely.

Once again, the Minister and this government have decided to tax Manitobans more, as users of the road system, and give them less. That's a failing of a commitment that this government has made that they were going to repriorize and redirect the funds to where they would do the most good. They've taken more money, as I've said. The figures are right in front of us: 10. 25 percent more money out of gasoline tax; 17.8 percent more money out of diesel fuel tax and, at the same time, they've cut by $10 million the amount of money they're going to put into road construction.

This is the department that could deliver some of the government's commitments and this is the department that is not doing it. It's a sad commentary on the government. I don't fault the Minister. I like to fault him and I like to get into little scraps with my honourable friend, the Minister of Highways, but I know that he recognizes the importance of maintaining the highway construction budget but he couldn't sell the rest of the government on it.

That's, in part, a reflection on him, but it is a greater and more serious reflection on the kind of understanding that this New Democratic Government has of what is needed in the Province of Manitoba. They believe that, because they don't have seats south of No. 1 Highway and west of the Red River, we don't have to spend any money there. Well, they're wrong, because that's the area of very great and sustained economic activity. That also is the area where they have their only bright light, in oil exploration in the southwest corner.

It is the area that provides a major contribution to agricultural sales for the Province of Manitoba, and I don't need to remind members of the government that they have consistently said that agriculture has been the major contributor to the gross provincial product over the last couple of years. I only beg of them to come to the understanding that you 19 34

Wednesday, 20 April, 19 83 can't milk that cow, south of No. 1 Highway and west of the Red River, forever without putting a little feed into it. Roads are a very important part of that area of the province and cannot be neglected as they were in the past New Democratic Government term. If this government neglects them again, it will be a sad commentary on the objectiveness of their party to govern the province. I only hope that the Minister will take my criticism not persona lly, but as constructive criticism that he knows that I always give to him.

I would hope that some of the members opposite - and we have two of them here, the Minister of Municipal Affairs and the Member for The Pas, who represent rural Manitoba constituencies - that they heed the message I'm saying, because they're getting it from their constituents as well, and they don't allow the city­ controlled Cabinet to once again deprive rural Manitobans of spending on highway construction. It's not giveaway dollars, it's dollars that the users have paid for.

Just give them what they pay for and this year alone, as I've said earlier, that would mean $18 million more in the highway construction budget, if you simply matched the user fees and the revenues of the Department of Highways to the construction budget. I don't think that is an inordinate request. It's not one that members opposite can say, well on one hand I want to decrease deficits, and on the other hand I want more spending.

I want the spending to go where it was supposed to go, not an unreasonable request, a very fair and equitable one, and one that the New Democratic Party , when they're in government, should heed. They should not repeat the disastrous record of 1969-77 in southern Manitoba. They should have learned the lesson then and they shouldn't repeat it now. I look forward to perusing the construction program to see whether it's being repeated this year. Thank you, Mr. Chairman. MR. CHAIRMAN: The time being almost 4:30 p.m., what is the pleasure of the members of the committee? SOME HONOURABLE MEMBERS: Committee rise. MR.

CHAIRMAN: Committee rise for the Private Members' Hour. SUP PLY - FI NANCE MR. CHAIRMAN, P. Eyler: Committee come to order. We are considering the Estimates of the Department of Finance, Item 5.(a)

(1) Federal-Provincial Relations and Research Divisi on, Economic and Federal­ Provincial Research Branch: Salaries - the Minister of Finance. HON. V. SCHROEDER: The Member for Turtle Mountain had asked yesterday approximately what percentage of public sector funds went to pay salaries and benefits, and our Estimates are that it is approximately between 45 percent and 50 percent . MR. B. RANSOM: How much was that? 50 percent? HON. V. SCHROEDER: Approximately between 45 percent and 50 percent for salaries and wages. MR. CHAIRMAN: The Leader of the Opposition. HON. S. LYON: Mr.

Chairman, this may not be relevant under this heading and I am willing to move to another one, but there are some questions I would like to ask about accounting firms auditing Crown corporations. HON. V. SCHROEDER: Go ahead. HON. S. LYON: I thank the Minister for taking it under this heading. On the 23rd of Septembe r, Mr. Chairman, 1982, the Minister will recall that he turned out a News Service release to the effect that he had sent letters to leading chartered accountancy firms in Manitoba inviting them to submit proposals for the auditing of certain Crown corporations. I won't read the whole release.

The Minister would be familiar with it. But he did say that the Crown corporations and agencies had been divided into two categories; "C ategory I, entities responsible for administrative, supervisory or regulatory services of a governmental or quasi-governmental nature. These will tie audited by the Provincial Auditor; and Category II, entities, ordinarily self-susta ining, that are responsible for the management of commercial operations, involving supplying of goods and services to the public.

These will be audited by commercial accounting firms." Then the release went on to say, "C ategory I corporations and agencies include the Liquor Control Commission, the Manitoba Lotteries Commission, Horse Racing Commission, Leaf Rapids Town Properties Limited, Manitoba Data Services, Manitoba Forestry Resources Limited, Manitoba Housing and Renewal Corporation and Venture Manitoba Tours Limited. "C ategory II corporations include Manitoba Hydro, Manitoba Telephone System, Manitoba Public Insurance Corporation, Manitoba Boxing and Wr estling Commission, Workers Compensation Board, Flyer Industries and A.E.

McKenzie QQmpany Ltd. and its subsidiaries." The release then went on to say that the Cabinet had "assigned to the Provincial Auditor the auditing responsibility for four other agencies, once the audits for the past fiscal years had been completed ." Those four were the Lotteries Commission, the Horse Racing Commission, MHRC and Manitoba Data Services.

"The ManFor, Liquor Commission, Venture Tours and Lead Rapids audits were assigned earlier to the Provincial Auditor when their previous year's audits were completed ." The release concluded by saying that "a letter inviting accountancy firms to submit proposals was sent out September 15 . These proposals are screened by representatives from Finance and the Provincial Auditor's office, and a short list prepared for each audit. Firms on the short list will then be asked to make a rnore detailed presentation, and recommendations based on these will then go to Cabinet ." Now, Mr.

Chairman, there are a number of questions that arise out of this announcement by the Minister. I suppose the first would be that this statement appeared to represent a fundamental change of mind of the Minister and of this government from what it used to propose when it was in opposition and made a great deal of the fact that the then Government of Manitoba 19 35

Wednesday, 20 April, 19 83 was having private audits done, as they used to say, more as a matter of patronage and so on. I realize that I am abridging the comments that used to be made by the NOP when they were in opposition and in the early months in government. They used to say that they weren't going to engage in such practices; that they would ensure that the Provincial Auditor did all of the audits.

They used to imply that the Provincial Auditor could do them more cheaply which, of course, was a piece of fiction and on and on with various rhetorical flourishes, not all of which I have to repeat for the edification or refreshment of the memory of the Minister of Finance.

So perhaps he could tell us, first of all, what has brought about this fundamental change of view on his part and the part of his government from that of having the Provincial Auditor do all audits, which was the position that they seemed to espouse when they were in opposition and previously in government, from this other position which was announced September 23rd to have certain of the audits done outside and certain done inside? What brought about this change in view on the Minister's personal road to Damascus? MR. CHAIRMAN: Mr. Minister. HON. V. SCHROEDER: Mr.

Chairman, I have just asked for the file to be brought into the Chamber and I will answer a little more fully later on, but I have to say the Leader of the Opposition is basically right in what he suggests, that when we were on the other side we were looking at numbers and it appeared to us that it was going to cost money to move from the public sector to the private sector in the area of auditi ng.

Indeed, I recall having been given numbers from the Provincial Auditor's Department that bore that out in the first few months of being in government, and later on there was some indication that those figures didn't include all the costs. That's something that made us reassess the position that we had taken. I suppose it is an indication that when we discover new facts, all of us can change course. We did change course. We think that what we propose to do and what we are doing now is the best compromise. We are certainly using the services of the Provincial Auditor to a great extent.

On the other hand, there are certain areas where we are also using outside firms and we think we've probably come up with the right mix. It nevertheless is under review and we may move in one direction or another in the future. HON. S. LYON: Mr. Chairman, I'm sure that all of us on this side of the House appreciate this personal confession that we have just heard from the Minister about how, when he was apprised of the real facts of the situation, he abandoned his political partisan stance and showed enough flexibility, for which I give him credit to do what, according to his lights, was in the public interest.

I take it, therefore, that all of the silly, nonsensical, errant and stupid comments that were made by him and his colleagues when they were in opposition about the advisability of having outside auditors do work for the government, I take it that all of those now can be taken as having been repudiated by the Minister just a few minutes ago. HON. V. SCHROEDER: No, Mr. Chairman. I think that we could say that maybe both sides were partially correct and partially incorrect.

One of the problems when you sort of practically , I shouldn't say practically eliminate, but considerably reduce the size of the Provincial Auditor's staff one time and then turn around and boost it again, you have all kinds of other costs involved there. As I indicated there were some hidden costs of operating through the Provincial Auditor that we discovered that weren't. As the Leader of the Opposition knows I wasn't the finance critic.

It was an area that I was peripherally interested in, but when in opposition I was in charge of other areas in terms of my critic role, so I don't recall the history of the debate as clearly as I'm sure he would. It wasn't in the area that was one that I was most interested in . HON. S. LYON: Well, Mr. Chairman, not to thrash old straw, although we will have to thrash a little bit of it, we won't create too many round bales today. I would remind the Minister of Finance that it was his then colleague, the Member for St.

Johns, who was the finance critic, the person who 1 believe is now the Chairman of Manitoba Hydro. I believe that person has been used by the Minister of Finance from time to time to receive "financial advice." Given the inaccuracy of the advice that the present Chairman of Manitoba Hydro was giving to his party and to the people of Manitoba with respect to private audits of crown corporations for four years, four long years, when we had to listen to all of the whinings and misstatements by that person, would that not seem, Mr.

Speaker , to be a good indication that "the advice" that the Minister presently receives, apparently on overseas loans and commitments that the Province of Manitoba is making, the advice that he receives from the present Chairman of Hydro should be looked at with a great deal of concern, given the degree of error that he found in the quality of the advice on this small topic in which the present Chairman of Hydro persisted in hoodwinking and misleading this House and the people of Manitoba for so many years? HON. V. SCHROEDER: Well, Mr.

Chairman, 1 think we all recognize that none of us is perfect, but 1 would remind the Leader of the Opposition of one area that demonstrates that there was a need at least to re­ examine what was happening. I'm thinking specifically of Manfor before, where you had a private auditor looking at that particular operation .

There didn't appear to be any awareness on the part of government that during the summer of 1981 there was just a massive buildup, there were thousands, and thousands of feet of inventory, lumber piled up there with no real hope of sales in the reasonable future, and an auditor who basically wasn't catching that. I think there were some real problems there that - I don't know whether the Provincial Auditor will catch those things now, but the point I want to make is that it wasn't a perfect system.

Maybe we erred on the side of believing that everything should be done by the Provincial Auditor, and maybe the other side erred on the side of thinking that practically nothing should be done there. I believe the compromise that we struck is one that's reasonable. 19 36

Wednesday, 20 April, 19 83 Now, that doesn't mean that we weren't wrong in some of our criticism. I think the advice that the former Member for St. Johns has given throughout has been generally good advice. There's very few advisors who are 100 percent right on every issue . HON. S. LYON: Mr. Chairman, referring to the categorization that was described in the New Service Bulletin of September 23rd. Category 1 , relating to administrative supervisory regulatory services of a governmental or quasi-governmental nature. I think we can ap preciate how these categories were arrived at and understand that.

For my own part, I was surprised to see the Liquor Control Commission included in that grouping, because while it does have a regulatory and administrative function in terms of an audit, that is by far the least important of its functions. It is the big monopoly seller of liquor in the Province of Manito ba. It's one of the few corporations that generates invariably and without fail, at least up until this present government came along, a huge and growing profit for the people of Manitoba through a chain of stores and outlets in our province.

I was at a loss to understand how that Crown corporation, the Commission, which is a separate legal enti ty, got into Category 1. HON. V. SCHROEDER: Yes, Mr. Chairman, the process was as follows.