JSSN 0542-5492 Fifth Session - Thirty-First Legislature of the Legislative Assembly of Manitoba DEBATES and PROCEEDINGS 30 Elizabeth II Published under the authority of The Honourable Harry E. Graham Speaker VOL XXIX No. 148- 8:00p.m., MONDAY, 9 FEBRUARY, 1981 Office of the Queen's Printer for the Province of Manitoba

MANITOBA LEGISLATIVE ASSEMBLY Thirty - First Legislature Members, Constituencies and Political Affiliation Name ADAM, A. R. (Pete) ANDERSON, Bob BANMAN, Hon. Robert (Bob) BARROW, Tom BLAKE, David BOSTROM, Harvey BOYCE, J. R. (Bud) BROWN, Arnold CHERNIACK, Q.C., Saul CORRIN, Brian COSENS, Hon. Keith A. COWAN, Jay CRAIK, Hon. Donald W. DESJARDINS, Laurent L. DOERN, Russell DOMINO, Len DOWNEY, Hon. Jim DRIEDGER, Albert EINARSON, Henry J. ENNS, Hon. Harry J. EVANS, Leonard S. FERGUSON, James R. FILMON, Gary FOX, Peter GALBRAITH, Jim GOURLAY,Hon.Doug GRAHAM, Hon. Harry E.

GREEN, Q.C., Sidney HANUSCHAK, Ben HYDE, Lloyd G. JENKINS, William JOHNSTON, Hon. J. Frank JORGENSON, Hon. Warner H. KOVNATS,Abe LYON, Hon. Sterling R. MacMASTER,Hon.Ken MALINOWSKI, Donald McBRYDE, Ronald McGILL, Hon. Edward McGREGOR, Morris McKENZIE, J. Wally MERCIER, O.C., Hon. Gerald W. J. MILLER, Saul A. MINAKER, Hon. George ORCHARD, Hon. Donald PARASIUK, Wilson PAWLEY, O.C., Howard PRICE, Hon. Norma RANSOM, Hon. Brian SCHROEDER, Vic SHERMAN, Hon. L. R. (Bud) STEEN, Warren URUSKI, Billie USKIW, Samuel WALDING, D. James WESTBURY, June WILSON, Robert G. Constituency Ste.

Rose Springfield La Verendrye Flin Flon Minnedosa Rupertsland Winnipeg Centre Rhineland St. Johns Wellington Gimli Churchill Riel St. Boniface Elmwood St. Matthews Arthur Emerson Rock Lake Lakeside Brandon East Gladstone River Heights Kildonan Dauphin Swan River Birtle- Russell Inkster Burrows Portage Ia Prairie Logan Sturgeon Creek Morris Radisson Charleswood Thompson Point Douglas The Pas Brandon West Virden Roblin Osborne Seven Oaks St. James Pembina Transcona Selkirk Assiniboia Souris-Killarney Rossmere Fort Garry Crescentwood St. George Lac du Bonnet St.

Vital Fort Rouge Wolseley Party NDP PC PC NDP PC NDP NDP PC NDP NDP PC NDP PC NDP NDP PC PC PC PC PC NDP PC PC NDP PC PC PC lnd NDP PC NDP PC PC PC PC PC NDP NDP PC PC PC PC NDP PC PC NDP NDP PC PC NDP PC PC NDP NDP NDP Lib lnd

LEGISLATIVE ASSEMBLY OF MANITOBA Monday, 9 February, 1981 Time - 8:00 p.m. CONCURRENT COMMITTEES OF SUPPL V ECONOMIC DEVELOPMENT AND TOURISM MR. CHAIRMAN, Morris McGregor (Virden): I call the committee to order. We are on Resolution No. 49, 2.(a)(2)(b). The Member for Brandon East. MR. LEONARD EVANS (Brandon East): I suppose technically we could have asked this under (

a) Salaries, but I don't think it matters too much. Are all the staff of MAC paid under appropriation

(2) Technology? HON. J. FRANK JOHNSTON (Sturgeon Creek): There's five staff, a director who is also the executive director of the Manitoba Research Council, three product development engineers, two of which are assigned to the Winnipeg Industrial Technology Centre, and one administrative secretary. That's the people paid out of that appropriation. 1 didn't quite hear all your question. Is that ... MR.

EVANS: I understand according to the information the Minister gave us on staff complement the other day that there are five people in Technology and my question was, this is the full staff, is it, of the Manitoba Research Council? MR. CHAIRMAN: The Honourable Minister. MR. JOHNSTON: No. The staff that you're looking at on the page the other day, the increase of eight, I believe you are referring to, three are for the Portage Technology Centre, and five are for the Winnipeg Industrial Technology Centre. Now that's the increase.

At the present time there's other staff in the technology centres who are paid out of the Enterprise Manitoba funds. Then the increase of eight will be paid out of the Enterprise Manitoba funds. These five people are the director, three engineers and an administrative secretary. MR. EVANS: I am still not quite clear. There are 5 SMY's under Technology and then in addition under Enterprise Manitoba you have listed 28 positions for Manitoba Research Council, so that's a total of 33. MR. JOHNSTON: That's correct. MR. EVANS: So my question is, what is the difference between the five.

I know you have itemized them here. You say a director, three engineers and one administrative secretary, but what's the difference? Why are they up there apart from the Manitoba Research Council under Enterprise Manitoba? What's the difference between the five and the 28? MR. JOHNSTON: The five are civil servants and the other people that are working in Enterprise Manitoba are term employees from Enterprise Manitoba. All of the Enterprise Manitoba employees are hired on the basis of the term of the contract.

Now, that doesn't mean to say they won't be there after because during the three year period of building up the technology centres we are very hopeful they become not completely self-supporting but quite self­ supporting. MR. EVANS: Can the Minister tell us what is the major thrust of the Technology Branch now? I know moneys are being spent on the food centre and I know there was some discussion on health products but could the Minister give us a brief overview of the thrust, the direction of the MAC staff in terms of technological development? MR.

JOHNSTON: The 1981-82 intentions will be to assist the MAC in the management of the two technology centres. This is what this five staff will be doing, assuring that the performances . . . well it's consistent with the Manitoba legal agreement, they place their major emphasis upon advancing National Research Council Manitoba project including effective incorporation of the related MAC component.

We have been working very hard and had made very successful presentations to the National Research Council to have an international research institute in the Province of Manitoba, the development in consultation with MAC, the private sector, and educational institutions; a major policy paper on strategy for technology development for the province with a December 1st, 1981, deadline; examining the entire process of innovation in the national and provincial context and recommend actions to strengthen the innovative process - that is studies to be done on the basis of where we should be going with R and D in the Province of Manitoba; and increase federal government purchases of R and D in Manitoba.

During the past year they were the leaders in the building up of the facility which is in place at the present time and doing all the other tasks with the Manitoba Research Council. That is the actual function of these five people who are civil servants. As far as the technology centres are concerned or the Portage Ia Prairie Food Technology Centre, I think we'd better answer it under the Enterprise Manitoba, under this agreement here. MR. CHAIRMAN: 2.(a)(2)(

b) pass; 2.(a)(3)(

a) pass; 2.(a)(3)(

b) pass; 2.(a)(4)(

a) pass. The Member for Burrows. MR. BEN HANUSCHAK: On 2.(a)(4)(

a) with respect to Human Resource Development, I just wanted to ask the Minister what, if anything, has been done flowing from the statement made by this government before it became government on March 31st, and April 1st and 2nd of 1977, at the Progressive Conservative Party's annual meeting. The Minister will recall the whole bundle of policy papers and it says on the cover that it's for discussion purposes but reading the first paragraph it's quite clear that this set of documents presents the direction and intentions of the Manitoba Progressive Conservative Party and the extent to which any discussion of 433

Monday, 9 February, 1981 these papers, or the effect a discussion of these papers were to have. was merely to polish up and smooth up the rough edges on some of the policy statements and that type of thing. But basically, as Sterling Lyon himself says, but while we may change some of the emphasis and some of the policy outlines contained here the general direction of these policies reflects the kind of government we will have in Manitoba. Now I note, Mr.

Chairman, and this is related to human resource development and I would think that the Minister of Economic Development would have an interest in this but one of the commitments that the Conservative party made at that time was to work with industry to encourage pilot projects offering employment opportunities to men and women after they have reached the mandatory retirement age of 65 years. So my question to the Minister is has he developed any pilot projects or assisted in any pilot projects to provide employment for persons after the age of 65, which he had promised to do 4 years ago. MR.

JOHNSTON: Not in this department, Mr. Chairman. MR. HANUSCHAK: Well, Mr. Chairman, you know the statement is quite clear to work with industry and if one was to work with industry one would assume that one would work through this Minister. So it would seem then that nothing had been done in that regard. There was also a commitment made ... MR. JOHNSTON: That's not true, Mr. Chairman. If you will excuse me I would like to answer. That's not true, I said not in this department previously. MR. HANUSCHAK: Oh, so the Minister has knowledge of something having been done in this area but not through his department.

Is that what he is saying? MR. JOHNSTON: That is correct. MR. HANUSCHAK: Well, would he be good enough to elaborate. MR. JOHNSTON: I think you will find through the Department of Labour and for the Over 65 programs you will find that they are basically in that department. Our particular area would be Human Resource Management, to work with industry on the management of their human resource and let them know what programs are available, instruct them where they would go to have personnel problems worked out. that type of information. MR.

HANUSCHAK: Well, listening to the Minister's explanation I find it difficult to understand how, in offering that type of assistance, how one could exclude the people over 65. I mean if he says that he offers assistance in personnel problems and the like well surely people over 65 are part of personnel. But he says he doesn't deal with them MR. JOHNSTON: Well, I didn't say that, Mr. Chairman. MR. HANUSCHAK: Very well. MR. CHAIRMAN: 2.(a)(4)(

a) pass; 2.(a)(4)(

b) pass; 2.(a)(5)(

a) The Member from Brandon East. MR. EVANS: Well, Mr. Chairman, I wonder if the Minister could outline exactly what information or material the Department has now prepared and is distributing to the public presumably and to business that it is trying to help. Could he outline the promotional material, pamphlets, reports, whatever, that is being prepared by this branch in keeping with its responsibilities? MR. JOHNSTON: There's a request in this department for an extra person who I mentioned is a writer. We have a director, a graphic artist, and a writer.

There is an increase of about $113,000 in the Other Expenditures. Let me give you the total advertising operation. The plans for the activities planned are career opportunities pamphlets and posters, fashion industry, hospitality industry, wood products industry and printing and publishing industry, displays and advertising and promotion support and also some career symposium support; a career symposium support was held last year.

The type of work we would be doing under the Career Opportunities is the continuing of the work that we did last year working with the Canadian Manufacturers Association in their Let's Talk Industry and You Program. We designed pamphlets such as this: Metal Working and Industry; Getting Ahead In the . . . and on the inside gives the brochures 27 Ways To Make Your Career in the Metal Working.

We did that one last year and we did the electronics one last year, the electronics industry brochure, working again with the Canadian Manufacturers Association and the Department of Labour and the Department of Education to work on the promotion, because it's badly needed on the basis of career opportunities. There are very large display posters and advertising and promotion for support with, Lets Talk Industry and You with the Canadian Manufacturers Association.

Industrial and business development information, audio-visual slide material - we will be adding to our slide material that we presented in the Manitobans Program that we produced last year - industrial location publications - that's allowing industry to know where are locations are - cost comparison reports - cost comparison between Saskatchewan and Manitoba or Ontario/Manitoba or wherever - promotional and advertising support - we are going to start a quarterly business information publication for $50,000.00.

Item (2) was $40,000; (4) is the Manitobans Campaign and display material, product stickers, in-store promotion, advertising, publications, ads and publications, stimulation of private sector involvement using the stickers on cartons for materials being shipped "Manitoba-made"; participation in Manufacturing Opportunities Show and Made-in-Manitoba Week, that's $40,000; general expenses of printing and stationery, $20,000; that's $283,000.00. That's the plans that we have for the coming year. I believe I mentioned earlier to somebody that we had different choices to be made.

We have a request from the federal government to participate in Ottawa in the World Symposium on Small Business, the eighth one where there is 40 countries represented. We will have to take a look at that. We have then, of course, the Enterprise Manitoba; plans are still being developed and this Enterprise 434

Monday, 9 February, 1981 Manitoba budget is split with the federal government 60-40. There is the energy campaign extension. Those are the ads that you saw in the Globe and Mail and be in the Wall Street Journal as well. You have your Manitoba-made extension. These are the ads, and they are very expensive ads when you are in the Wall Street Journal, etcetera. Your Manitoba-made campaign is a continuation of what went on last year. These are the different industries, electrical, farm machinery, transportation, aerospace. Those are the types of ads that we are using in the Manitoba-made campaign.

Also, the Manitoba-made stickers with industry. You have your sectorial capabilities brochures, business development brochures. Those are $100,000 but, as I say, split between the federal and provincial government. You have also the regular information and technical support materials advertising, the promotional and technical services and seminars, etc .. that are held in the Winnipeg Enterprise Development Centre, in the Brandon Development Centre, Winnipeg Industrial Technology and the Portage Food Products Centre. There are seminars held very regularly on different subjects in whatever area they are in.

Material to support initiatives to promote Manitoba's capability in western capital products, and that's the sourcing program I mentioned earlier. General advertising and publications, $10,000; that's $250,000.00. Then you have additional advertising and promotion, that is, market development, trade fairs promotion, $32,000; business development, business opportunities production, $12,000 - that's $44,000, for a grand total with Enterprise Manitoba and the department of $588,000.00. MR. CHAIRMAN: The Member for Brandon East. MR. EVANS: Does the department still publish the Community Development Reports? MR.

JOHNSTON: Yes. MR. EVANS: Would it be possible to have one set of all the pamphlets produced by the department now? I think we have had them in previous years. Just to see an update of any changes. MR. JOHNSTON: Yes. MR. EVANS: Thank you. Did I hear the Minister correctly when he said the department was going to go back into producing a magazine? Some years ago we did produce a monthly magazine, or I think it came out perhaps 9 or 10 times a year, I'm not sure. Is the Minister saying now they are going to back into the magazine business with a quarterly business publication? MR.

JOHNSON: A quarterly business information publication. MR. EVANS: Would this in any way compete with the Manitoba business magazine that's now being printed by Murray Publishing Company Limited? MR. JOHNSTON: No, it won't, it's not going to be a magazine type, it will be similar to a magazine. It will be a publication quite similar to the one that was done before on business information in the province; projects, all of those things, it will be assistance to business.

We, at the present time, have one that is the small business informations publication that is sent out about three times a year at the present time and that's done through the Enterprise Manitoba Program through the small business sector. MR. EVANS: Mr. Chairman, I thank the Minister for that information, but could he explain why was the previous publication cancelled? What was the basis for cancelling the previous publication, which too, as the Minister just described, was an informational pamphlet or brochure or whatever you want to call it, it was an informational piece.

I'll call it a magazine, if you like, strictly information. It sounds very much like what the Minister has just described, so I wonder what was the purpose of ceasing the first one, when now it looks like you are going to go back into the same type of report, even though it may only be quarterly rather nine or ten times a year? MR.

JOHNSTON: To answer the honourable member's question, I was not the Minister when that was decided to be discontinued, but I believe at the time it was discontinued on the basis of not having sufficient funds, and it's one of those things that got cut out of a budget and that happens to many different things. I was able to convince the Cabinet, I guess, or the powers that be that the information report is one that is beneficial to manufacturers and businessmen in the province, and so we have decided to go back for the quarterly report. MR.

EVANS: I am not opposed to the Minister and the Department moving in this direction. I do have a faint recollection though, Mr. Chairman, that we were criticized, not necessarily by this Minister, when he was a member of the opposition, but I vaguely remember some members of the opposition criticizing us for putting out a magazine which competed with privately produced magazines and we do have one in Manitoba, and I think there's only one that's now produced on a consistent basis and it would seem that in some ways, inevitably you will be competing with that particular publication.

It might make it that much more difficult. Having said that, I repeat I am not opposed to the direction the Minister is moving, but it seems rather ironical that we were criticized by the previous Conservative Opposition for being in the publication field, competing with a privately-produced magazine, and now we see the wheel has turned full circle and we are going to go back into the business. MR. SPEAKER: The Member for Transcona. MR. PARASIUK: Mr.

Chairman, I would like to ask the Minister if he feels that the cutbacks of two years ago, where these types of cutbacks were made in various departments, but especially this one, when publications were cut out with a great deal of fanfare by the First Minister at that time, whether in fact his actions now when he comes to us saying that he convinced the First Minister, convinced the Cabinet that a public like this was needed, is he now saying that those efforts at cutbacks two years ago were misguided, in fact were wrong, and the government 435

Monday, 9 February, 1981 is now admitting its mistake by permitting this particular publication to again come to light? In fact, my colleague, the Member for Winnipeg Centre, says that possibly they are wiser now than they were two and a half years ago. Can the Minister indicate whether in fact there have been any start-up costs in design and layout for magazines, because I know that there are start-up costs.

Any publisher that I have ever talked to indicates that usually the first year of any magazine's publication. if in fact it would be publishing a publication like that for profit, the first year is usually a loss because you spend at least a year trying to make up for your initial design and layout costs. Can the Minister indicate how much it has cost the people of Manitoba to make up for a mistake made two years ago? MR. JOHNSTON: First of all, I am not prepared to have words put in my mouth. I don't know whether it was a mistake or not, and assumptions usually are very hard to answer.

I can only say to you that the $50,000 will, we expect, according to our estimates, and there hasn't been any layout work done as yet, but $50,000 will be able to do the layout and handle the cost of the four publications that we expect to have. MR. CHAIRMAN: The Member for Elmwood. MR. RUSSELL DOERN: Mr. Chairman, I wanted to ask the Minister some questions here about his provincial ad campaign.

There's apparently three components to an advertising campaign in Manitoba and across Canada and the United States, and I wanted to first of all ask the Minister what the total cost of three components are: There's the television commercials. which are $62,000 of P.R. paid for by the Manitoba government; then there's newspaper ads which appear in the Globe and Mail, Financial Post and Wall Street Journal. Can the Minister indicate the cost of those ads and whether that is cost-shared with the Federal Government? MR. JOHNSTON: Yes. Mr. Chairman. MR.

DOERN: Then I would like to also know, I guess the third component is in fact split 50-50, $67,000.00? MR. JOHNSTON: I have answered that question before; I believe I did in the House. The third component is not split. I think I answered in the beginning of the Estimates. The Energy Reserve Program will be in the Globe and Mail and Report on Business. Financial Post, Canadian Business, EnRoute, Executive. Wall Street Journal, Fortune, Sights and Selection Handbooks. The cost for those ads. on the energy ads which I just showed you, is $60,000.00. That is split between the Federal and Provincial Government 60-40.

The Manitobans campaign to create an awareness of the range and quality of the Manitoba-made goods among potential customers in other Canadian provinces and in the U.S., emphasis on priority sectors identified under the Enterprise Manitoba, elecrronics. aerospece. food, beverage, light machinery and farm equipment, transportation equipment. health care products, and other sectors in which opportunities have been identified, fashion industrial clothing.

That program, with the advertising media, and I believe I showed you some of those ads, will be in the Micro, Canadian Electronics and Engineering, Implement and Tractor, Manitoba­ Saskatchewan Business, Aviation Week and Space Technology, Canadian Grocers, Business Life in Western Canada, Style, Skyward, Globe and Mail, Report on Business. Selected Manitoba-made ads have been running over the past few months. lntersession scheduled for February and March, but you are asking about this campaign that I announced in the press. That is $67,000, cost-shared with the Federal Government.

The Manitobans campaign that you see on television is the one that was not cost-shared by the Federal Government; it was a Manitoba program. MR. DOERN: I want to go over those figures then. I gather that the T.V. programs cost $62,000, that the newspaper ads cost 40 percent of $60,000, which is $24,000, and that the ads and promotions cost roughly one-half of $67,000, which is therefore a total of about $120,000.00. Is that correct, on the three parts of the program? MR. JOHNSTON: I think that you also should have - the $60,000 for the Energy Reserve Campaign is the cost of the ads.

That's the one that we just showed you and they are going into the periodicals, Wall Street Journal, as I mentioned, and Globe and Mail. That is the cost of placing them. The Manitoba-made Campaign in the magazines that I mentioned and the large distribution we are getting on that, the cost of placing them is $67,000.00. The actual cost of the television ads to the station is $27,000.00. The $62,000 figure comes from - in the press conference, the advertising agency was asked what each ad would cost and he said $7,000.00. Now, I have offered to bring in the actual costs. The Member for St.

Johns has asked me for that. The figure of $7,000 was the estimates that we worked on and as soon as we have all the information that the Member for St. Johns asked for we'll be supplying it, because all the bills are not in as yet, certainly we had some estimates. MR. CHAIRMAN: The Member for Elmwood. MR. DOERN: I had a series of questions I wanted to follow here. I am looking at that Free Press ad and I am following it from there. There are three components here; the first one being the television commercials, and that apparently costs $62,000, the total cost of production and placement. MR.

JOHNSTON: That's correct. MR. DOERN: Secondly, you have black and white print advertisements in a bunch of business publications, which I gather you said cost $60,000 and that was a 60/40 split, and therefore you are paying $24,000 on that. I assume it's 40 percent provincial. MR. JOHNSTON: Plus the production and layout charges that weren't ... MR. DOERN: All right, plus production costs which might be $20,000 or $30,000; and then there's the 436

Monday, 9 February, 1981 third component of ads and promotions, which are $67.000; black and white ads, trade shows, etcetera, and you are paying half of that. Is that correct? MR. JOHNSTON: Sixty federal, forty provincial. MR. DOERN: It strikes me that you are spending a minimum of $100,000 to $150,000 on these three segments. MR. JOHNSTON: That's provincial dollars. MR. DOERN: Is there advertising in other sections of your department for other promotions in addition to these? MR. JOHNSTON: No, it's all done through Enterprise Manitoba and the career advertising that I mentioned. MR.

DOERN: I think the Minister just confirmed a question that I asked him in Question Period, that when you come to production costs, that those are open-ended figures, that $62,000 for TV programs may be higher and similarly with the newspaper ads, that those production costs are not fixed but they are open-ended. MR. JOHNSTON: We can be very accurate with the production costs on the printed, because they have been made up for quite some time, but the quoted figures of productions per television ad was $7,000, and if you read the ad or the

article in the paper, it was not me that stated it. The press asked a question of the adveritising agency. MR. DOERN: Is the Minister arguing that the costs will be lower or that they will be higher than the projection? MR. JOHNSTON: I certainly would ask some questions if they weren't close to what was quoted. MR. DOERN: Can the Minister indicate why the people in the ads that were shown in Manitoba were paid actor rates? Is it because they were regarded as amateur actors and were paid an equivalent amount of money to a real actor, or was there some other reason? MR.

JOHNSTON: I think it's the law or the union contract if I'm not mistaken. Broadcasters have to pay all people that were picked and were on television. We're only obeying the rules that are laid down by them. MR. DOERN: Mr. Chairman, I wanted to know as well, again, on the fact that the five commercials cost $7,000 each or $35,000 to prepare, whether that figure is regarded by the department as an average or a high amount of money? MR.

JOHNSTON: I stated in the House, I asked that question myself and I am told by most advertising people, and the people in the media, that were there when I asked the question, thought we got a bargain. MR. DOERN: Can the Minister indicate again whether in the selection of that agency which was McKim. whether a series of agencies were invited to bid and to present a variety of material and possibly a range of prices for the campaign? Were there other agencies involved in the competition? Was it a competition? MR. JOHNSTON: Not in this case.

The McKim Advertising Agency was a selection that was made by proposals to the department and it was approved by the ad agency that McKim Agency would have the contract for Economic Development, the same as there is another agency that does it for Tourism. MR. DOERN: Did the Minister then also have the approval of the advertising audit office in the sense of when the figures were checked, were those figures approved or in line with other government contracts? MR.

JOHNSTON: The advertising audit office were involved in the proposals from all agencies when the Department of Economic Development requested proposals from agencies to handle the Economic Development advertising. MR. DOERN: Mr. Chairman, again on the development of the advertising, was a concept for these ads Jayed out by the department and then taken to McKim or did someone in the department simply phone them up and say we'd like a series of ads to counter the "doom and gloom" in Manitoba and McKim developed the program? Who developed the program in terms of the concept, was it the agency or the department? MR.

JOHNSTON: The agency made proposals to us on a request by the department on the basis of having ads that would let Manitobans know that Manitoba is a good place to work, good place to live, and a good place to invest. MR. DOERN: Mr.

Chairman, I would simply say in general on this question, which we have debated, that in my judgment these ads are no more than an attempt by the Progressive Conservative Government to counter their bad image; that they are not in fact a series of advertisements to promote Manitoba or to counter so-called "doom and gloom talk", they are simply an attempt to promote the sagging fortunes of the government, and that they are an improper use of taxpayers' funds; that the provincial Conservative Government is spending taxpayers' funds to promote their own political image and that the cost of these ads should fairly be billed to the Progressive Conservative Party and not to the Department of Economic Development; and that the basis of these advertisements is completely erroneous, namely that the basis is that they are going to counter an image which exists in the minds of the media and the Opposition political parties.

Nothing, I think, could be further from the truth. The problem in Manitoba is the sagging economy because of the policies of the Lyon administration and the reasons that are given by the Minister are misleading and the whole concept is mistaken. They are attempting to build up a political image prior to an election campaign. If the government was serious then the Department of Economic Development would go out and drum up business for Manitoba, encourage Manitobans to stay in Manitoba, instead of driving them away, and start generating some jobs 437

Monday, 9 February, 1981 1n Manitoba. Instead they see the fundamental problem of the Manitoba economy as image. They think that their image is misunderstood in the public mind. They say that there are no problems, that the economy is booming, that everything is well, that people are happy and that the only problem is that a few people in Manitoba think that there are problems in society. And the Conservative answer is there are no problems in society. the problem is in the minds of the media and the Members of the New Democratic party. Well, Mr.

Chairman, I think that is an incredible approach. and I have to say to the Minister that when he made his opening statement on this Department it bordered on paranoia. If you read what the Minister said when he opened up on the Department. he said that there are people in this society that are against us and are spreading doom and gloom. Well I have to tell you, Mr.

Chairman, and I have to tell the Minister of Finance, the new Minister of Finance, that the problem is within the government and that no Opposition political party and no newspaper in the country can generate doom and gloom where none exists, and that the Opposition political party is simply pointing to the bas1c and fundamental problems in the Manitoba economy and all that the Conversative Government can come up with after 3 years of monitoring is an advertising campaign. They come up with new paint and cosmetics to mask a serious fundamental problem and think that this is a condemnation of their thinking.

They're becoming paranoid in their last days in power and they don't have the guts to admit that they have made mistakes and what they are doing is billing the Manitoba taxpayer to try to turn around an image that they have carefully built up by destroying the Manitoba economy since 1977. MR. CHAIRMAN: The Member from Brandon East. MR. EVANS: The Minister indicated, in answer to a question earlier, that essentially the monies available for production of pamphlets, advertising material and informational bulletins. etc. were in this Item under 5 plus some expenditures that might be available under the (

e) under Canada-Manitoba Industrial Development. Could he give us an idea as to what is the total amount. This obviously doesn't give us the total amount of money for promotion and mformation services. There are monies elsewhere in these estimates. Could he give us the total amount that's available for promotion and informational services. MR. JOHNSTON: I just read it all out, the intentions for next year and it's $588,000 with the Enterprise Manitoba being $260,000 and the other being $283.000 which is shown in the estimates, Other Expenditures.

The $283,000 is in the Promotion and Information Services that you see before you; in Enterprise Manitoba there is $260,000.00. MR. EVANS: You add up the $283,000 plus the $260.000 that gives you the total. MR. JOHNSTON: And an additional $44,000 in market development, trade fairs promotion and business opportunities promotion. MR. EVANS: So now we're looking at $625,000 in total. MR. JOHNSTON: $588,000, $588,500.00. MR. EVANS: And that includes Manitrade, is that what you are saying? MR. JOHNSTON: Enterprise Manitoba Campaign. MR.

EVANS: What is the estimated amount of that that might be spent on television advertising in the next year as opposed to print material or is it all print material? MR. JOHNSTON: This is all print material. MR. EVANS: So there are no funds in here, therefore, Mr. Chairman, for further television ads by this Department in the '81-82 fiscal year. MR. JOHNSTON: As I said at the beginning when I read off this list, these are the intentions at the present time. There could be a decision made, if we felt that there was a reason to have television advertising, we would take a look at it. MR.

EVANS: So while at the moment the intention is to spend this money essentially on print material, the Minister doesn't rule out the possibility of monies being spent for television advertising in the future. MR. JOHNSTON: That is correct. I don't really know why the members of the Opposition seem to think that television is not a media that shouldn't be advertised on. It's probably the largest advertising media in the world today that everybody uses and if we see that there is a reason to use it we would take a close look at it. MR. EVANS: Well, Mr.

Chairman, I don't think that members of the Opposition are necessarily opposed to using T.V. as one medium, but it's what is broadcast over T.V. that is what is concerning the members of the Opposition. If you are advertising some information to the small business sector, making them aware of some program that's being made available to them or whatever, that's one thing. Or even you know purchase Made in Manitaba products, that's another thing, you know, appealing to the consumer.

But when you get into the general, admittedly nebulous area of trying to persuade people that this is a fine place to live by means of a $62,000 television program, I think this is where we draw the line and say that this is a wasteful type of expenditure. So we're not against T.V. advertising per se, providing you can see some direct benefit. And as I said the other day, I don't see how you can measure the benefit of your $60,000-odd T.V. program. There is no way you can measure the benefit from that.

If that was geared to Buy Made in Manitoba food products or Buy Made in Manitoba clothing or Buy Made in Manitaba furniture, whatever, you could almost go out and measure that and see whether there was an increase in sales of Made in Manitoba furniture, for example, see whether there had been any impact. I don't know how you measure the impact or the benefit from this particular television advertising. MR. JOHNSTON: Well, Mr. Chairman, all members, who I'm sure have seen the ads, if they take a close look at the 5 of them you'll find that they hit working 438

Monday, 9 February, 1981 in industry, they hit industry, they hit hydro, they hit professionals. I might just say on the professional side I was watching and listening the news tonight at 6:00, where there is a group of people going to have meetings with nurses in this province to convince them to stay here. There are jobs available and just after having, I believe, a 28 or 38 percent increase in salary. They're convincing them to stay here and on the basis that Manitoba is a good place to work, live and remain here as a professional.

So the ads were designed to get, we thought, all parts of the people working in the economy. Quite frankly, we have had some very good letters and comments on it, many good and very few bad. MR. CHAIRMAN: 2.(aX5)(

a) pass; 2.(aX5Xb) pass; 2.(b)( 1) pass - the Member for Burrows. MR. HANUSCHAK: Mr. Chairman, on Business Development, and I again I would like to refresh the Honourable Minister's memory as to the commitments that he made to the people of Manitoba four years ago. All of these commitments are related to business development in the Province of Manitoba. At that time he promised the provision of an incentive-oriented tax system which will encourage our productive people to remain and pay their taxes in Manitoba. Now, Mr. Chairman, you know that the Minister has failed on that because that did not happen.

Whatever incentive-oriented tax system program he has devised, of which I am not aware, and if he did, it certainly wasn't effective because our productive people are leaving Manitoba and they are not paying their taxes in Manitoba. In fact, Mr. Chairman, by the Minister's own admission, he now has to spend money to tell people that Manitoba is a good province to live in, a good province to work in, a good province to invest in. He also said that Manitoba must compete for industry development and opportunities. Well, Mr. Chairman, here again the Minister has failed.

There is no evidence of any competition for industry development and opportunities. Oh, yes, there has been talk; there is talk about doing feasibility studies, to do a feasibility study, to do a feasibility study type of thing, Alcan, etcetera. But nothing has really materialized as yet, Mr. Chairman. Also related to Business Development: To provide incentives for risk taking and initiative in Manitoba. Again, to put it in the words of Henry Fielding in speaking of Robert Walpole, it's nothing but a flim­ flam, because that hasn't happened. In fact, Mr.

Chairman, this year, in which the Minister says there has been no change in government policy, but surely even a grade two or three child would notice it in comparing the Throne Speeches over the past three years, that where the Minister and his colleagues have been talking in 1978, 1979, and 1980 about removing government intervention, removing government intrusion from the economy, this year the government says, "No, the government cannot turn a blind eye to what is happening in the private sector and government must get involved in the development of our economy." So whatever he had promised the people in 1977, that didn't work.

He promised to provide tax incentives for small businesses as the greatest producers of employment and opportunity in Manitoba. Well, we haven't seen any of those tax incentives to small businesses. In fact, Mr. Chairman, we know what is happening to small businesses, small and large; they are going bankrupt. In fact, Mr.

Chairman, when the Minister talks about consulting with the business community, and I suppose he has been accustomed to meeting with the business community at the Manitoba Club and the Carleton Club, and I would suspect that in the very near future, both of those clubs will probably have to shut their doors because many of their members have moved out of the province to other provinces in Canada, and those who are remaining are going bankrupt so they won't be able to afford to renew their membership fees. Again, he repeated that he will provide incentives for new business and speculative investment.

Then dealing more specifically with private enterprise in Manitoba, he said in 1977, Mr. Chairman, that to restore a climate in Manitoba - this is one of his objectives: "To restore a climate in Manitoba where responsible private enterprise is encouraged to flourish and to provide the jobs and opportunities that people throughout Manitoba need." Again, Mr. Chairman, we know that the Minister has failed on that.

When he says that Manitoba is a good province to live in, and he has to spend money to tell the people that, he will recall the headline which appeared in the Winnipeg Free Press, and I wish I had it with me - this appeared about three or four weeks ago - and it was quoting a construction worker, one of the thousands of construction workers out of work in Manitoba, who said - there was even a worse one, "Bleak Future for Tradesmen", but in another issue on the same day, a story dealing with the same situation, the headline read, "I never dreamt or I never thought that it would be this bad,".

And that's what one of the 4,000 unemployed construction workers in Manitoba said, Mr. Chairman. Four thousand workers representing a population of at least 10,000; now that's 4,000 unemployed. That's not including the partially, the semi-employed workers, who are working 35, 30, 25 hours a week, working half-time, less than half-time, who are not included within this figure of 4,000. That does include the thousands of workers who do not know from one day's end to the next whether they will have a job to go to tomorrow. And that's the healthy economic climate that this Minister is talking about, Mr. Chairman.

Obviously he has failed there, too. The Minister and his colleagues four years ago said that their objective was to wind down the MDC, selling off those government-owned enterprises that can be operated by the private enterprise with appropriate guaranteed job security. Well, Mr. Chairman, we are well aware of the give-aways which had occurred. But the job security? The job security, we're not quite so sure whether there was job security provided to those employees that went with the Crown corporations that were given away, such as Morden Fine Foods, such as the Lord Selkirk, and others.

Then the Minister and his colleagues said to the people of Manitoba four years ago: "To end government competition with private industry and to replace this activity with incentives to private enterprise to perform specific business activities of 439

Monday, 9 February, 1981 benefit to the province." That did not occur, Mr. Chairman; that did not occur. The incentives aren't there and if there are any incentives, any meagre incentives that the Minister is offering, the private sector is not grabbing at them. We do not see a flood of business entrepreneurs coming into Manitoba and developing our economy. In fact, the reverse is occurring and the Minister knows it, because he says he has to spend money to tell the people that. look, this is a good province to live in; this is a good province to work and invest in.

Then, the Minister and his colleagues also said in 1977, related to business development, that they are going to study the feasibility of a system of small business loan guarantees similar to the established Farm Development Loan Program. Well, is the Minister still studying that system of small business loan guarantees? Surely it is not going to take him four years to study it. Surely he will get it off the ground. He said it - I am reading - as a matter of fact, every fourth or fifth page - there is a memo here with the name of Sterling R.

Lyon at the bottom of it, "Government Organization, Economic Policy, Sterling R. Lyon. MR. CHAIRMAN: On a point of order, the Honourable Minister. MR. JOHNSTON: On a point of order, I was of the understanding. or I thought the member was reading one of my speeches. Is it one of mine, or what speech is it? MR. HANUSCHAK: The Minister doesn't know what I am referring to. I am referring to a document with the PC logo on top, and it says 1977 annual meeting. I thought I had explained this to the Minister earlier - 1977 annual meeting, March 31, April 1, 2, policy papers. Now I'll explain to the Minister again.

I looked at this and it says for discussion purposes. I thought this is merely a discussion paper and whether it's become policy or not, who knows, so it's really a waste of everyone's time raising it, but then I go to the first page. and it says, and this is over the signature, not just the name typed in there but the signature, Sterling R. Lyon, and he said that, "This set of documents presents the direction and intentions of the Manitoba Progressive Conservative Party". Then he goes on to say that, "These policies and programs are not the last word", but he is very quick to point out. Mr. Chairman.

"But while we may change some of the emphasis, the general direction of these policies reflects the kind of government we will be in Manitoba." Mr. Chairman. to the best of my recollection. the Honourable Minister was a member of the Conservative Party in 1977.

He was a member of the Progressive Conservative Party Caucus at that time, and I don't see how the Minister at this time can disassociate himself from what his leader, speaking on his behalf. and on behalf of his caucus, at that time said. and at that time he did say that he's going to study the feasibility of a system of small business loan guarantees similar to the established farm development loan program. of which we see no ev1dence. Four years later they're still studying it, reviewing. monitoring. observing closely. What else do they do? They are experts at doing a whole number of things of that kind.

Then he said, and when I say he, because like I said, he can't disassociate himself from this, "To expand the Small Business Advisory Program of the Ministry of Industry and Commerce to offer greater support to small business enterprises in Manitoba." That too, Mr. Chairman, the Minister did not do, neither his predecessor nor this Minister, so again he failed, again he portrayed himself as a dismal failure, purporting to be a leader of Manitoba's economy, of the development of Manitoba's economy.

He was very quick to rush into the House in the fall of 1977 to repeal succession duties, and boy, that was going to do wonders. That was going to do wonders, and he repealed The Succession Duty Act, but people continued leaving Manitoba after he was elected government, and they are still leaving Manitoba. There is more of them leaving Manitoba than coming into Manitoba, and for the few jobs that he and his government have created there are many more jobs lost. There are increasing numbers of bankruptcies; increasing numbers of mortgage foreclosures. People just walk away from their assets.

Tonight during dinner, for some reason one copy of the Manitoba Gazette was late in arriving and I received both today, the most recent one, the one for the previous week, and there are notices, the orders for substitutional or notices in lieu of substitutional service of mortgage foreclosure proceedings, where apparently the owners of the assets, whatever they were, homes or whatever, just walked away from them, disappeared. The mortgagees could not find them. There are increasing numbers of cases of that kind.

And that, in the opinion of the Minister, is what's to make this province a good place to live in, a good place to work in, a good place to invest in.

The Minister and his colleagues also said at that famous convention, three day convention in 1977 in March and April, "They are going to consider the cost and effectiveness of diverting some funds currently used by the MDC to assist and support employee group purchases of equity in businesses - sounds very good to work out a scheme that would assist employees to become part owners, to become shareholders of the business enterprises employing them - an excellent idea. That was said four years ago, and there's another flim-flam, Mr.

Chairman, another flim-flam, because, can the Minister tell us, can he stand up here and say yes, I have considered the cost and effectiveness of diverting funds from the MDC to assist and support employee groups to purchase equity in their businesses and here are the examples. Here are the business enterprises where that has occurred. Here are the business enterprise where that is in the process of negotiations and so forth. It hasn't happened. Mr.

Chairman, I say to you, on all of the commitments which this Minister and he, like I said, can't disassociate himself from this because he was a member of the party that made these commitments to the people of Manitoba; these were the commitments on which he ran during the election campaign in the fall of 1977, so he can't disassociate himself from that and he has to admit that he has failed at each and every one of the commitments that he had made to the people of Manitoba four years less two months ago. 440

Monday, 9 February, 1981 Now the Minister is talking about spending a pittance on business development and probably the bulk of that we'll discover is an advertising program and a pittance again on market development and so forth. I don't want to violate the rules, Mr.

Chairman, we'll deal with those items when we come to them, but I just want to point out that given the present day economic condition in our province his $62,000 advertising program, or even his $150,000 advertising program, or the increase of about - no it isn't - an increase of $70,000 for Business Development is not going to save the economy of the Province of Manitoba. It's gone too far down the hill already to be rescued with an additional $70,000 expenditure. That $70,000 expenditure is like a drop in the ocean in relation to the present economic state of affairs in our province and the Minister knows it.

Here again he thinks that, well, if I paint a rosy picture in the media, in the press, on TV and so forth. the people turn on the "one-eyed monster" and they'll see the Minister or whomever they see in that program - I've seen one ad dealing with the oil industry on a Brandon station and that was sort of garbled up, but the message that the Minister wanted to convey wasn't all that clear. But he thinks that with a number of ads of that kind that he'll convince Manitobans to say, oh yes, it's a good province to live in. Well, Mr.

Chairman, take your print advertising campaign and distribute it to the thousands of unemployed people in Manitoba, tell them that; put that on their dinner table and see if that would feed their family - your advertising program; the thousands of people, the thousands of unemployed and like I told you before, it's not just those that are presently on the unemployment lists because there are underemployed people, there are people who are on the verge of becoming unemployed tomorrow or the day after or within the next few days.

Tell all of those people that Manitoba is a good province to live in and see if they'll believe you. See what they'll say to you, Mr. Chairman. To sum up, the point that I wanted to stress, that I wanted to make, is that here, four years ago, a number of flim-flam promises were made, none of which this Minister has honored. MR. JOHNSTON: Mr.

Chairman, right off the bat, the Rural Small Enterprise Incentive Program in small business in the rural areas of the Province of Manitoba, the loans were $117,000 in 1978-79, or grants; in 1979-80, they were $1,400,000; in the fiscal year of 1980-81, for nine months it was $737,000, for a total of $2,295,000 in grants to small business in the rural part of Manitoba.

The manufacturing investment in the province was up 24.6 over 1977 and 1978; it was up 29.8 in 1979 over 1980; and the total increase since 1977 was 76.5. -(Interjection)- In two years, in three years. -(Interjection)- Increases in manufacturing investment in the Province of Manitoba, the percent. Employment in manufacturing in 1977 was 2.86 of Canada; in 1980, we are at 3.4 percent of Canada in manufacturing. Manufacturing capital expenditures in Manitoba were 1.31 of Canada; we are now 1.4 7, not as good as we want it to be, but have been increasing every year since that time.

New businesses reported, 1980, April to December, was 4,868: 1,927 under The Corporations Act; Certificate of Registration, 373; Business Names Registration Act, 2,568, for a total of 4,868. That has been remaining fairly constant throughout all of the years in the Province of Manitoba. Job vacancies in the Province of Manitoba: The registered vacancies are 2,800 in 1979; the registered vacancies to October, and these figures are all from Statistics Canada, are 2,288.

Quarterly Skill Shortages in Manitoba, put out from the Quarterly Report of Occupational Skill Shortage in Mantitoba, Economic Service Branch, Manitoba Region, Canadian Employment and Immigration Commission, a whole list of shortage skills in the Province of Manitoba. New plant expansions - these are just some of them - new plants were 251, and expansions in the larger plants were 7 45. Jobs: The total potential of those new plants is 1, 785. The investment total is $103,541,000.00.

The whole list goes through all the numbers, all taken from actual requests for plant expansion either through DREE or through building applications, etcetera. These our department has worked on. These our department, as government, has worked with and been involved with industry in order to have these expansions come true. Mr.

Chairman, when I hear the member start to say that we have not accomplished some of the things that we set out to do as far as expanding industry in the province is concerned, and then when you find that we have created 30,000 more jobs in three years, then you find that the unemployment rate is the third lowest in Canada, and you find that our export shipments in the province are up higher, we have to say that we have been doing a good job in creating employment in the manufacturing investment part of the economy. Mr. Chairman, those are the facts. They don't come from an

article or paper for discussion; they come from Statistics Canada. MR. CHAIRMAN: The Honourable Member for Brandon East. MR. EVANS: Mr. Chairman, it is rather amusing to hear the Minister read out certain selected statistics. I am not sure what he is attempting to accomplish.

At first I thought he was talking about how many jobs were created by the efforts of his department, which is one thing we can talk about, but now when he wants to get into job creation in general and low unemployment rates and the amounts of investments and talk about these figures in total, I don't know whether he is jumping to the conclusion that it is because of his activities and his department that we have had 30,000 new jobs in Manitoba in the last year. Surely that doesn't follow, Mr. Chairman.

Surely the Minister has got to to recognize that job creation right across this great land of ours has increased in the past three years, not only in Manitoba but from coast-to-coast; every ruddy province has had an increase in jobs. The national average increase in jobs has been fantastic and why? Not because of the policies of this government or any particular provincial government. The major influence on job creation has got to be the 441

Monday, 9 February, 1981 devaluation of the Canadian dollar. That is the general consensus of economists across this country. The reason we have got more jobs in Manitoba is because we have got more protection for Manitoba manufacturers because of the cheap Canadian dollar. You can't point to any program of this government that has tended to create jobs to the extent that the devaluation of the dollar has created. What bothers me, Mr.

Chairman, and we tried to make this point the other night but it doesn't register with the Minister. while we have had more jobs created in the past three years on average than we have had for any year before, the fact is, we are still attaining a smaller share of the national pie. Now, ask your economists and they will tell you that. Manitoba's share of the national job creation pie is smaller in the past three years than it was in the preceding eight years under the NDP government. We are getting a smaller share of job creation in this country. not in this province, not a greater share.

Yes. it has gone up in totality, but in relative terms we are doing worse than we were in the 1970s, in the early Seventies. But the phenomenon of job creation has got to be - the most prevailing opinion and the consensus. of all the reading I have done, all the magazines, the Financial Post, the Financial Times. all the business magazines - any economist worth his salt will tell you that this has got to be the one single reason.

Look at either the Bank of Montreal or the Bank of Nova Scotia's recent bank letter - it even comments about job creation in Canada and that this is a puzzlement because we are undergoing something of a national recession. Indeed we are, and yet we are creating more jobs. The reason has got to be this added protection by a cheap dollar. What should bother all of us, though, what is happening at the same time is that the degree of productivity of the Canadian worker is diminishing.

In other words, we have had job creation increase, the rate of job creation has increased, yet the output of Canadian industry - I'm not talking of Manitoba. I'm talking Canada in general, has not kept up with the job creation. Therefore, the output per worker has diminished in the past couple years. so we're getting lower productivity levels in this country and that's a fact. I don't know exactly why it's happening.

I think what has happened is that we've got a lot of people in the secondary labour market coming in now and people who are taking less then desirable jobs perhaps. and for whatever reason, I'm not sure what the answer is, but the labour productivity, the Manpower productivity, which is not a reflection on labour unions or any individual, or if it's a reflection anybody. it's got to be a reflection on management, but I'm not even suggesting that. For whatever reason productivity is down. But when the Minister sits there and says well. my golly. you know we've got the third lowest level of unemployment in Canada.

I say to the Minister go back through the records since unemployment figures were tabulated by Statistics Canada and see where Manitoba rated. Were we ever fourth or fifth or seventh or eighth or ninth or tenth? Were we ever the worst? No. ww used to be the best, we used to be the lowest. Sometimes we were the second lowest. The last three years we've never done better then third lowest. but let's recognize the fact that the reason, one of the reasons and this is gone on for decades, that we've had a relatively low record of unemployment in Manitoba is because of the fact that people do leave this province.

They've left it for decades. Unfortunately they are leaving it more rapidly in the last few years then ever before. So much so that our total level of population for the first time I think since the dirty 30's is dropping. Our total level of population is dropping because of the rapid increase in net exodus of people, but we've always had low unemployment rates. So for a Minister of Economic Development to tell us we've got the third unemployment rate is to tell me that it gets cold in January. That's what you're telling us. It doesn't tell us anything.

If you could say that we're going to have the lowest rate of unemployment or we anticipate the lowest, well then maybe we'd be more concerned. I wouldn't be, nor would I be as the Minister of Economic Development rather self-satisfied with quoting the figures as he did about manufacturing investment, because while you can see some increase in manufacturing investment increase across Canada, including Manitoba, we also see unfortunately in this province, disinvestment, disinvestment. When you dismantle Swift's Canadian, that is negative investment. Let's take into account that as well.

And when Monarch Wear folds its tent and moves out of the province that is disinvestment, Mr. Chairman, and when Maple Leaf Mills closes, as it is now, and dismantles its machinery and the building is torn down, that is disinvestment and when Indus Electronics says it finally has to close its shop and lay off its workers and goodness knows what's going to happen to the machinery and the organization, that is disinvestment, Mr. Chairman. What bothers me is that while we can see some new investment, there is just too much disinvestment in this province and I don't know what this department can do.

That's what we should be addressing ourselves to. How can this department prevent some of this disinvestment from occurring. What can you do to help Maple Leaf Mills. Nothing maybe. What can you do to help Indus Electronics? What can you do to help Monarch Wear.

For a moment I thought, when I read the last report of the department, it said some of the more significant achievements of The Business Development Branch during the past year included assistance with the expansion of Monarch Industries, and at first I thought we were talking about Monarch Wear, but I gather this is Monarch Industries that's in the metal fabricating business. I would hope it is at least. I hope we don't consider this a great achievement in helping Monarch Wear and then find out it leaves the province a year later, and I'm sure it isn't.

This is what we have to be concerned with and for the life of me, it's a very difficult, almost impossible challenge that faces this branch in this department in the area of business development, because this is the one area of the department where you have the hard-nosed and hard-cell attempt to encourage specific industrial projects to come along and to take place and we have some good staff. I know they worked very hard but you can't get blood out of a stone, Mr. Chairman, and we have some great difficulties to overcome. I'm not suggesting it's all the fault of this government.

We just got some very great difficulties to overcome because of our natural resource 442

Monday, 9 February, 1981 situation, because of the national business cycle and so on. We recognize that, but having said, Mr. Chairman, we believe on this side that there are certain policies of the government that have aided, or not aided, but have contributed toward the economic stagnation that we have become characteristic of in the past 3 years. This is where we are concerned that the policies that the government has pursued have worsened the economic situation, worse then it would have been otherwise. At any rate, Mr.

Chairman, I am wondering if I could ask the question now and the Minister did make reference to 241 jobs connected with the expansion of industry and 7 45 jobs with new industries. and I'm not sure whether I got that correctly, and whether he was referring to this particular department or what he was referring to because there was some noise at the time. So I wondered if he could just reiterate, or without repeating everything he said, I want to make clear that this is what the department believes that it has helped with in the past year. MR.

JOHNSTON: In this department they work with companies employing 50 or more. The jobs created in new plants were 251, expansion 7 45 for a total of 996. The potential jobs in these new plants and expansion is 1, 785. The total investment of the new plants is $50 million. The expansions are $53 million for a total of $103,541,000, and there are additional projects presently in progress that are being worked on. You know when the Member says he speaks about Maple Leaf Mill, he hasn't taken the time to find out why Maple Leaf Mills closed in Manitoba. I thought the

article in the paper was very clear, the statement by Maple Leaf Mills. The reasons for Swift's closing were very clear also. Indus Industries, I said the other night, we have worked with very, very closely, for a long time, and it was an unfortunate situation there that I don't intend to expand on because of personalities, but it had to close up. The bank decided to go along with them no further. But why would General Aluminum Forgings come here? Why was there a decision for the blood fractionation plant of 6 million to come here? Why did CSP Foods at 35 million come here, to Manitoba?

United Fibre Bond, insulation pads, carpet underlay 1.2 million? Why did the Heritage Foundary expand for 1.2 million. Now all of these had contact and worked with our development officers. Bristol Aerospace, rocket plant. we worked with them very hard on their DREE application with the Federal Government; Standard Aero Engines expansion; Public Press, 1, 750,000; Sperry Defence Business, naval computers, are now going to expand to the point of 2,500,000; Hudson Bay Mining and Smelting, 15 million. Pardon me, Sperry is 2,500,000.00. I'm only listing some of them here, but I can say to you, Mr.

Chairman, that it's all very well for the members to point at some of the industries that closed up, but I assure you that we investigate the reasons for them. We also have all kinds of industries opening up in Manitoba or expanding in Manitoba and usually the reasons are, as with Maple Leaf Mills and certainly in the case of Swift's, a very old plant that was not economical for them to run. Then you have Boeing pleads overgrowth here; Boeing is expanding in the Province of Manitoba.

You talk about across Canada, these people have decided to expand or invest in Manitoba for the reasons that we have been saying for a long time. We have been working with them very hard to convince them and show them the benefits of being in Manitoba to have that market that's growing to the west of us and the south of us and it has been paying off Mr. Chairman. The Member wants to talk about the third lowest in unemployment. Certainly, we'd like it to be first.

I'm not going to compare to other provinces, other than to say that I believe and I sincerely believe that comparing Canada to the Canadian average, and it's not just what I believe, it's fact, comparing it to the Canadian average when you have two provinces that are doing 50 percent of the investment in Canada, is not a fair comparison because Manitoba is not as badly off when you take that into consideration, and those also are the things that make our figures look bad, but it also is the greatest benefit we're going to have, and that's supplying those markets to the west of us, providing the Federal Government doesn't muck up the energy policy and slow them down.

MR. EVANS: Well, Mr. Chairman, the point though is while the Minister can discuss or mention some new companies that have established or are going to establish in Manitoba, I don't believe he has made the case that because of the Conservative Government, because of your economic policies, you are getting a certain amount of business development. That was the thesis in the 1977 election, elect the Conservatives to government and great things would happen in the Province of Manitoba. And, of course, as we know those great things have not come to pass.

It is just not satisfactory for the Minister to rattle off a few names and say you know this has happened and that's happened, you know talks about Boeing. I would like to tell him, when I was Minister Boeing expanded. In fact Premier Schreyer, I believe, was there at the opening, I believe, I don't quite remember. Burroughs Electronics, Burroughs Machines, they came to Manitoba. I know we had all the preliminary discussions with Tupperware to come to Manitoba. Phillips Wire and Cable - we have them in Portage Ia Prairie. I can name lots of companies too, you know.

But you have got to look at the bottom line, I would suggest, in all of these and see what's happening in total to investment and jobs that are being developed in various sectors and so on. There is no question, there can be no dispute that there has been no significant improvement in industrial development in this province under the Conservative Government. In fact I would say the reverse, the evidence is clear. We have not had any economic miracle. It's been, if anything, an economic disaster. I believe, and I'd like to be helpful on this, I believe that Manitoba is not getting a fair shake out of DREE.

Now I know there is The Industrial Agreement, the sub-agreement on industry and there's all these programs that we've talked about earlier today, Enterprise Manitoba and so forth and so on, and moneys for technology centres and so on, but it seems to me that Manitoba is not getting a fair shake from the Federal Regional Economic Expansion Department. I believe that evidence shows that there has been a considerable amount of new large industry go into the Maritimes, go into Quebec, 443

Monday, 9 February, 1981 that has not come to Manitoba, and I believe that one positive suggestion the Members of this Committee can make is to urge the Minister and his department to be more aggressive in persuading the Federal Government through DREE to help bring about more manufacturing establishments in Manitoba.

It seems to me that the Province of Nova Scotia. which has been considered a have-not province for a long time and probably still is, has nevertheless experienced a considerable amount of new manufacturing establishments over the past several years. mainly because of the Federal Government's Economic Development Agency, namely DREE. You see quite a bit of development in Quebec through DREE, and it seems to me that we are not getting our fair share of assistance through that department in terms of significant, new industrial establishments. I will agree with the Minister.

Maybe the day and age of flour mills for Manitoba is gone, but surely the day and age for electronics development is here. The day and age for computers is here and there are areas that we should get some federal assistance and they can be very significant to Manitoba.

It calls for co-operation I know, and I don't know how you persuade the Federal Government to think otherwise, but I really believe that Manitoba has been let down by the Federal Government and I don't know how the Minister can overcome it, but I think that has to be a priority area, to go after the Feds as they are called through the Department of DREE to get on with the job of helping us, a have-not province, bring about some industry.

What bothers me is that the Federal Government always look at the low unemployment rate and they say, well, Manitoba doesn't need any help because it doesn't have much unemployment,

whereas Nova Scotia, let's say, or New Brunswick has a very high rate of unemployment, 12 percent let's say, quite often in the wintertime in New Brunswick and Nova Scotia and even higher. But that's not the only criterion on which a judgment should be made as for further assistance from the Federal Government. Unfortunately, they look at unemployment rates and they say it's low in Manitoba so we don't have to worry. but. Mr.

Chairman, the Minister has to convince them that things are not as good as unemployment figures would indicate; that there are other figures they should like at. including the loss of our population and other figures that are not so favourable and that therefore the Federal Government should, if it really believes in a one strong Canada, get on with the job of providing economic opportunities. It's just not good enough for us to have a province where the people, and particularly the young people of this province have to leave. They don't want to leave, they like Manitoba. They agree with the Minister.

They think Manitoba is a hell of a good place to live in. but they like to eat as well. They like to eat and so they go, and I say the Federal Government is also letting us down. The Federal Government. they talk about a national unity and so on. as far as I am concerned the basis for a strong united Canada is jobs for all from coast to coast and it's just not good enough not to have sufficient jobs in this province. I urge the Minister to get on with the business of persuading the Federal Government to think a little more positively about opportunities in this province. MR.

CHAIRMAN: The Member for Winnipeg Centre. MR. J. R. (Bud) BOYCE (Winnipeg Centre): First of all, through you, Mr. Chairman, I wish to thank the Minister for the co-operation that he afforded a couple of problems inter-sessionally and through him to the staff it was really a pleasure to deal with the people in the department. Now after that laying that smoke screen, a number of questions have been directed in my direction.

The questions that come to me are from people in the business community that raise the question, if the governments can help Massey-Ferguson and Chrysler and the farmers, why can't we come up with some kind of a program or process to help a number of people that are in difficulty at the present time. This item we are considering is Development and it sounded like my two colleagues were already out in the hustings there making their political arguments.

I saw on television last night - was it last night - that Frances Fox announced that the government is going to be involved in helping Teledon, for example; and then I read today in the Winnipeg Free Press that Sedco, a Saskatchewan Economic Development Company has a program to assist people in share equity, which is something like what we had under

Chapter 2 of the Manitoba - what was that act? Anyway, they put in place buy-out provisions and in some cases they insisted that there would be a buy­ out provision four or five years down the road. What I am rambling around about, I guess, Mr. Chairman, is, could we not prevail upon the Minister to perhaps put something in this item. I know he would have to approach his colleagues for a supplementary estimate, but could he not put in this business development a component to see if there isn't some way that we can come to grips with keeping people in business?

I have prefaced this question by mentioning the big ones, Massey-Ferguson and Chrysler and also our historical relationship to the farmers in the province, and I don't question the need for that. In the last Session, I think, we voted some 40 million for drought and flood, all in the same year, type of thing.

The questions that come to me from the people in the business community, the small people, less than 50 employees - perhaps I should raise this on small business development, but it is business development as such, and in talking to some of these people that come to me with their problems, some of it is just a bridge situation and in talking around, these people are forced into bankruptcy by our system with no support apparently being available.

Even the people that are in the field say that it may improve in two or three months or four months or six months or the next season or something like that, but these people have no choice. I don't want to question the particular decision that was made relative to a case in point that the Minister himself raised a few moments ago, but where one of the creditors in that particular case, without focusing on it once again as a specific, decided in their corporate wisdom, which is their right to do, is to call the notes and then they have no other alternative but to fold.

I certainly don't want to be put in a position where we would come up with a conglomerate of bankrupt companies at all, I'm not suggesting that. What I am suggesting for the Minister's consideration. albeit my colleagues are perhaps 444

Monday, 9 February, 1981 rubbing the Minister sore with monitoring and everything else, I would ask him to monitor a situation in this area. For approximately a quarter of a million dollars, could deploy the accountants necessary, with the direction necessary, to take a look at these bankruptcies from an analytical standpoint because, Mr. Chairman, it is view of many that we have to come up with some new structures, and even the present government has admitted to that.

Strict reliance on the private sector to solve all our economic problems is passe and I find no reason to criticize the government for that because I would remind people that it was Lincoln that said, "If 1 didn't agree that I could change my mind, I would be confessing that I was stupid today as I was yesterday." So the government in three years experience can see that there is some necessity to shift, and perhaps they'll even look at our investment in Tantalum . to get that one either, but if they could take a look at - have the people who have the experience.

I didn't say that earlier to blow smoke at people; that the people that you have deployed within the department are terrific. They can dig out an answer on almost anything, and when they come up with graphics, I'm not too sure about some of the ads you have on television at the moment, but nevertheless the capacity, the capabilities of the people to analyse these things, to come up with new structures ...

I think this left­ right. left-right, government in business, government out of business, I think is passe, and we almost are in the political situation that we confess to, not necessarily conscription, but conscription if necessary, and paraphrase that in today's terms that not necessarily goverment in business, but government in business if necessary. When you have the Federal Government on the one hand becoming involved in Teledon and you have Saskatchewan on the other side apparently attracting private sector money through some involvement in equity sharing with a buy back provision or whatever.

We have to come up with some new structures, and I think that if we analyse some of the difficulties which are being experienced by the business community, that possibly in the next fiscal year that you can come up with a program. I would ask the Minister to ... I don't know where else I can raise this particular point, but it is something that has come to me from many people in the business sector. It's fine to develop businesses but what about me? I've been in business for a while. What kind of government program is there or what kind of help can I get except going through bankruptcy court?

And there really is nothing available to these people. I don't know what the percentage figures are now, but I understand much of our business is under 50 employees. Perhaps through you, Mr. Chairman, to the Minister, he can take that particular item back to Cabinet and see if it isn't possible to include such provision in Supplementary Estimates so that the government can address this program, and I, for one. would support the monitoring of that situation in that regard. MR. CHAIRMAN: The Member for Transcona. MR. WILSON PARASIUK (Transcona): Is this the appropriate item to ask about the aircraft industry?

It's business development. I assume that this is the proper appropriation. I would just like confirmation from the Minister. Is that correct? Okay, I do that be MR. BOYCE: On a point of order, Mr. Chairman. MR. CHAIRMAN: The Member for Winnipeg Centre on a point of order. MR. BOYCE: I'm sorry to interrupt my colleague, the Member for Transcona, but I raised that as a serious question, and I would like some response if the Minister is in a position to say either yes or no or maybe, because people have raised this question with me in the business community. MR. CHAIRMAN: The Honourable Minister. MR.

JOHNSTON: I would have given you an answer after, but if you would like the answer now. First of all, to the Member for Brandon East, we do get a very good percentage or a share as far as Manitoba is concerned for population etcetera in regional development from DREE. We have a very good working arrangement with DREE. Possibly they don't move the loans as fast as we would like them to, or the grants as fast as we would like them to.

We do not have as good a break as far as federal funds are concerned when it comes to EDP program which is Industry, Trade and Commerce, and we will be discussing that with Industry, Trade and Commerce very soon. I'd say to the member regarding the people that are in business and I think he'd be referring - I don't want to put words in his mouth but it really does have a relationship to what is called the service industry, people in business in the retail business or that type of an industry. Most of the programs that are presently in place both federally and provincially are directed towards manufacturing.

The way we try to work with the small industries, and when you mention the one that went out of business because the bank called the loan, there was an assessment, an accounting assessment made of that business. There was representation by our department to that business, to the board of directors of that business, of what had to be done or what should be done and it just wasn't possible to pull it out and we would have, in our opinion, been taking over a business that just would have been a stop gap just to see the day of the actual bankruptcy come a little later in fact, instead of when it did.

We in small business, we have the small business development people and this department by the way is 50 people or over, but we do work through our enterprise centres. We have people in our small business enterprise centres that are production people, that are accounting people, that are management people, that are marketing people, that will work with any business, whether it's manufacturing or the service industry upon request or even if we hear of one that's in trouble we'll try to go out and work with them, but it's usually upon request.

Now as far as setting up a fund is concerned to keep businesses going, we use the Federal Business Development Bank to a large extent, we take people to them, but the province does not have a fund at 445

Monday, 9 February, 1981 the present time such as you mentioned in Saskatchewan that is directed to the service industry. Our assistance to the service industry is really through assistance as far as counselling is concerned or consulting is concerned. I say to the member that is something that we have to look at. There is no question that there are circumstances not with, outside the province. There are lots with outside the province but in the past year, regardless of what the honourable members may think, the drought had a tremendous effect on retail sales within the province.

The present - well, even the good weather conditions hurt the skiing industry, the snowmobile industry. and many others. But those are circumstances within the province and, really, they can happen most any time. The retail trades, and I am repeating myself, or the service industry, there is not a very large, in the Federal or Provincial Government, program to really assist the service industry, Mr. Chairman. Let me just say to you that I referred to the problems within the province and without trying to compare ourselves to other provinces, because I know the Member for Inkster does not want me to do that.

But in 1980, when the Conference Board - and these were the figures of the Conference Board - predicted that we would have an increase of 1.8, our Finance Department predicted 2 percent. In August of 1980, because of the drought condition, they reassessed the position and came down to minus 1.6, which they have brought all the way down, as far as the Conference Board is concerned, and I said in the House the other day, we do not completely agree with that figure, minus 1.6, which was a reduction of 3.4.

Now, the same drought condition, and I will use the province, but let's just say the prairies of Manitoba and Saskatchewan, in Saskatchewan in April of 1980, the Conference Board predicted that Saskatchewan would be up 3.4. The final prediction of January, 1981 for Saskatchewan is .2, a reduction of 3.2. All of the statistics pertaining to the Province of Manitoba actually indicate, and in the Prairies generally where the drought hit, that it had a very sharp effect, mainly on the service industries, because of the drought.

I say to the member that I and my colleagues in the Committee of Economic Development of Cabinet, are very concerned. I think you probably saw in the paper we had a request from the furniture industry to take the tax off Manitoba manufactured furniture. We just felt we weren't able to do that; it would be very hard to figure out which furniture that was sold to retail stores was Manitoba manufactured. We have had representation about the sales tax being taken off on the basis that it would stimulate retail sales or get some of the money that is in the banks today out.

All of the banks and all of the trust companies have got not record, but very very high amounts. or a very large amount of money in the banks at the present time. People aren't spending it in the ways they used to be spending it. So those things do have an effect on the service industry and it is something that is a concern and, repeating myself. our basis of being of assistance has been through consultation rather than funds, and the technology centres are also available.

They are being developed for use, because a small business does not have the funds to buy technical services, technology services, some of the larger industries have. We would hope that the Industrial Technical Institute will be of assistance; it has been to several already. We would hope also that that institute would start to have some income of its own very soon. It has some income at the present time but it is not significant right now. MR. CHAIRMAN: I wonder if I could just have some guidance here. The Member for Transcona was speaking and I see the Member for Winnipeg Centre is very anxious to speak.

If his question isn't long, we'll let the Member for Winnipeg Centre. MR. BOYCE: I wish to thank my colleague from Transcona. The Minister makes my point at both levels. First of all, I wasn't suggesting a revolving fund. When I said a quarter of a million, I was just saying my guess would be the staff necessary, to employ to get the information, to take a proper look at what you might do because I, at this point in time, haven't got an answer. When you say hat the drought caused these problems, that's exactly the point, that the people in the business community ask me about, to see if we can help farmers.

There is some public good in helping farmers. People make the point and I agree with it. I have never opposed a vote for assistance to farmers in difficulty. If I could just use as an example, Mr. Chairman, with the indulgence of the committee, I didn't have that much success with the former administration in arguing that there was a definite and immediate social benefit by keeping a group of people skinning trees to make fence posts. The market had decreased to the point where the marketing agent could no longer market fence posts.

So the company was in a position where economically they had to recommend that they not purchase any more fence posts. But I made the argument at the time that there was an immediate social benefit to keep the people who were making those fence posts, making fence posts, because if they didn't, the immediate social costs would be evidence. It was proven by the particular case, and I don't want to go into too many specific on it.

But the reason that the problem exists is that no one is addressing themselves to the problem; I agree that no one has taken a look at the service industries and what we could do to support them. We have the technical capacity to analyze when it is in the public interest to step in with one or all or any. We have made it as a political judgment in the past by and large, that farmers are entitled to this kind of support from the public and they have had it, without question, but the economy has changed so much in the last generation that we have to look at other areas.

Now, the Minister knows me well enough, that I don't think that the government should be involved in everything in a way that they regulate everything. But take, for example, in the City of Winnipeg, no one has been able to demonstrate to me that the increase of a million square feet in the marketing capacity in the City of Winnipeg in the retail trade was necessary at this point in time and somebody perhaps should be making that case. But I don't want to get into that argument.

All I am suggesting to the Minister, on this particular item, because there is no where else for me to suggest it in the Estimates - I could possibly 446

Monday, 9 February, 1981 put a Private Member's Resolution but I think that that would take up too much time of the House - that the Minister ask his colleagues for an additional sum to keep the records and to analyze those reasons why people are going bankrupt. Hopefully these conditions will change, but nevertheless, I am sure that if the experts were deployed and asked to take a look at this, they could make recommendations. I don't think every inefficient operation should be maintained; I am not suggesting that. I wasn't suggesting that a revoling fund be set up to bail people out.

Nevertheless, I believe that it is in the public interest to be of assistance to people in the service industry because in the final analysis, marketing of anything is the basis of our whole economy. It isn't just production; it is marketing also. We have had an occasion where even in the service industry, governments have been involved. I think of the case when they phased out the boiler plant in Transcona and the government was involved in programs to train these people - trained boiler makers when they switched to diesels. So that was a specific response to a specific problem.

What I am suggesting to the Minister is that we take a look at the people who are for some reason in economic difficulty at the present time and see if there isn't some principle that we can apply to these businesses in the same way that we have applied it in the past to the boiler makers and we apply it every year to the farmers, whether it is in subsidies in beef. There were questions raised in the House today, what are we going to do for the pork farmers, for the pork production, or what are we going to do for the beef production?

So if the Minister would accept my premise that if technicians were deployed to keep the records, that they could be analyzed so that we could take a look at them to see if there isn't some public program in the public interest, not for the government to be in business bailing people out, but when it would be in the public interest on a cost benefit, strictly a business approach to the problem, because up to this point in time, we haven't got any criteria to use except the seat of our pants. MR. CHAIRMAN: The Honourable Member for Transcona. MR.

PARASIUK: I was asking the Minister if he could give us an explanation as to why he really doesn't even mention the aircraft industry at all in his intoductory comments, in that last year he seemed to place a fair amount of faith in the economic expansion that would be derived in Manitoba from developments in Ottawa and we expected that to take place. Now this year he is not projecting anything for it, or he thinks it is not going to be that significant. Can the Minister indicate what has changed between last year and this year in this respect. MR.

JOHNSTON: There really isn't that much change except that we are disappointed that we did not get as much of the N.F.A. contracts as we would have liked in Manitoba. The original document that came down when the announcement on the F-18 national fighter program was announced, they had percentages for the provinces.

Since that time, those percentages have not been lived up to but when I say that the percentages weren't lived up to that could have been more of a benefit to other provinces across the country other than Ontario and Quebec, the large placement of new factories, the largest one that was the blade and vane plant in Quebec, and the forging plant which is going forward, I believe, in Ontario, that will be a benefit to those two provinces.

Now, the industrial benefits that we have to look for are the offsets with these companies as to them placing business such, as G.E. having been looking very seriously to put a glass plant other than in their present area in Canada. Also, unfortunately, we had the opportunity to quote on much more business than originally in the N.F.A. program and our industries decided not to quote on it.

The work that was put out for tender, some $850 million of it, in many cases was such that our aircraft industry was not in a position, because they are very busy at the present time, to set up, to do something that might end five years from now, such as working on other aircraft that are presently in use. So they did not, in many cases, quote.

Now Boeing - Boeing is expanding in their particular area but basically doesn't have too much to do with the NFA - they are expanding for their own reasons because they have sales and they are supplying Canada Air at the present time with materials out of this plant and they will be supplying other aircraft people with products out of this plant and they will be expanding on that basis. The water bomber of Canada Air, we were able to negotiate working with CAE, and we did do a lot of the negotiations with Canada Air to have the CAE make the flaps and the tail for the 215 water bomber.

Last week, they delivered the first set 15 days ahead of schedule. That particular order for 15 sets will last until next June and the contract is for $1.5 million, I believe. Canada Air has orders for another 15 water bombers over and above that and the work that the CAE has done so far with the inspections and everything that have come up on the delivery of the first set is such that Mr.

Campbell of Canada Air told me that there would probably be no question that it would be a continuing business for CAE and it has put CAE back in the aircraft business and will give them the opportunity, because of the machinery they had to buy, to quote on other aircraft components. Bristol is doing what they call the hot parts of the 404 engine for G.E. We are working with Standard Aero Engine to hopefully have the repair and overhaul of that engine and that particular repair and overhaul of that engine will probably come out for tender, or the specifications for it will be towards the end of this year.

Standard will definitely be in competition with what we feel is Orenda on that contract, but we think that they have a good possibility of doing it. But Standard Aero Engine is expanding rapidly without contracts, and Bristol has also been expanding their business. Today we were at Bristol and they received an award for the delivery of 75 ship sets for the Aurora that they are making.

The Government of Canada ordered 19 Aurora aircraft, but they have already supplied 75 sets and the man from Lockheed today told us that that program would be going through to at least 1988, so that Boeing will be producing those for the Lockheed Aircraft, because that aircraft is starting to sell. They 447

Monday, 9 February, 1981 have expanded their Rockwood Plant in Stonewall to the tune of $4.5 million which was announced. So the aircraft industry in Manitoba is working very much towards the components. It is actually better at supplying components than to be supplying for one specific aircraft or one specific order. because if you supply components you can supply them to many aircraft companies.

The full aircraft industry in the Province of Manitoba is moving ahead but there is no question that we did not get as many of the contracts on the National Fighter Program as we would have liked, mainly because some of our companies decided not to quote. but we are working very hard to make sure that we can get into the repair and overhaul of both the frame and engine of the new fighter aircraft. MR. PARASIUK: I think last year the Minister was saying that Manitoba might expect something in the order of over 4,000 jobs as a result of the F-18 fighter aircraft being selected over the other one.

Can the Minister now indicate whether that 4,000 figure will be met or whether in fact it is closer to about a thousand? MR. JOHNSTON: If we get the repair and overhaul there will certainly be an expansion of jobs. It won't be 4,000 jobs. I would say that, as I mentioned, the reason for not receiving the number of contracts is because the work available for our industry to tender on was such that they did not want to tender on it, a lot of it.

If the Federal Government had said, "You will build the factory here, the larger factories," which they did in the case of the two big ones I mentioned, it would have, but it won't be 4,000 jobs now. But the aircraft industry in Manitoba has been increasing extensively in the province. MR. PARASIUK: I would like to switch over from the aircraft industry to industry in general. We are talking about business development.

Would the Minister concur that there is a problem with respect to venture capital in Manitoba, that business, especially small business. and this relates in part to what my colleague. the Member for Winnipeg Centre, was saying. you know, small businesses have difficulty getting access to capital and when you have interest rates as high as they are, then there is a premium on equity financing.

Can the Minister indicate whether his department has done any work with respect to venture capital formation and the extent to which there is a venture capital surplus in Manitoba or a venture capital decrease over the last few years. Is there a problem in this respect? MR. JOHNSTON: There isn't a shortage of capital in Manitoba or in Canada. MR. PARASIUK: If there isn't a shortage of venture capital. can the Minister indicate why the government has made a number of grants to companies? Why would you give a grant to K-Cycle if there isn't an absence of venture capital.

If there is no absence of venture capital, then you finance this with people putting up equity financing. taking a risk, and that is what venture capital is called. You don't get interest payments on venture capital; you in fact take an equity position 1n the company. Now, that's the way the private sector is supposed to operate, with people coming along and deciding that this is a good investment opportunity and putting forward their money.

Since we have had a decrease in business activity in Manitoba, since the government has seen fit a number of times to provide direct grants to certain companies without having established a general program of giving grants to companies, but only giving it to selected companies, can the Minister indicate whether in fact this is because there is a venture capital problem?

Because if there isn't a venture capital problem, could the Minister then indicate where these pools of venture capital are so that the small businessmen who are coming to me asking for financing for business ventures, so that I can refer these people to the Minister, because the Minister undoubtedly will have some sources of venture capital that these entrepreneurs in Manitoba society right now don't seem to have access to. MR. JOHNSTON: Well, it depends on the venture. We are not in a position to be able to tell people what to do with their venture capital.

We are only in a position to introduce people to people where there is venture capital. When you mention K-Cycle, K­ Cycle was not what you would call a venture capital. The province supported K-Cycle on the basis of research, because that company could very easily have left this province if the province hadn't decided that we wanted to have that research continue on the K-Cycle engine. MR. PARASIUK: That's my point.

The company would have left the province because there wasn't sufficient capital to finance its operations here, it would look elsewhere for research and development financing, and that is the whole point of venture capital. The problem in Manitoba seems to be that there is a lack of venture capital.

We used to hear stories from the former Member for River Heights, and other people, who said that if certain taxes were changed, if laws were changed, if family law was changed and if various taxes were abolished, that we would be in a position now of having a surplus of capital in Manitoba which would be used for investment purposes to allow business people to develop their businesses.

In fact, the government, the previous administration, had been told over and over again that something like the Manitoba Development Fund, which was an attempt by the province to provide venture capital to business people in Manitoba, that this would not be necessary, that if you provided the right climate, there would be an abundance of venture capital and as a result, you would have a lot of small business formation, you would have very few bankruptcies, they wouldn't have to rely on borrowed money as much, their debt equity ratios would be altered, that it would be a better situation with respect to business.

Since the last three years have proven this to be incorrect, I am then asking the Minister, in his opinion, is there a problem with venture capital formation and the availability of venture capital in Manitoba, because the private sector relies on venture capital? If there is a problem, what is the government going to do to try to fill that vacuum? MR. JOHNSTON: Well, I will go back to K-Cycle. K­ Cycle wasn't in the position of being in the venture capital stage; it is still in the experimental stage and 448

Monday, 9 February, 1981 the venture capital at the present time is not coming out for one reason only_ The amount of money involved, with interest rates, that you can talk venture capital as much as you like, but with the interest rates the way they are, they are not moving into venture businesses as much as they had been, and it's just as simple as that You have got that situation everywhere in Canada. As I said - let's go to shortages of money - there is all kinds; if a small business wants to borrow money there is money available. There is lots of money available at high interest rates. MR.

PARASIUK: What usually happens with small business. when they go to borrow money, somebody says that you have insufficient equity, you have insufficient security; what you have to do is increase the equity in your company before you can get a loan. The problem with small businessmen is that they don't have the ability to raise that type of money themselves, so they look for other investors, and that is the way the private sector is supposed to operate. They seem to have a great deal of difficulty attracting investors as opposed to lenders. MR.

JOHNSTON: The member just doesn't seem to realize that putting your capital, or putting money, or getting money for a small business, and with small business having to operate with the high interest rates, purchasing inventory and everything at the present time does not attract much venture capitaL As a matter of fact, if you keep your money in the bank you can probably do better than putting it into a venture at the present time. Venture capital - there is capital available - I am not saying available, there is lots of capital but it is not being put out at the present time.

If the small business goes to the bank they are dealing with high interest rates. I know you are going to talk about increasing your equity, or you don't have enough equity so you want some more venture capitaL So if you get some more venture capital and the business needs still to operate - it still has to have inventory involved, or even if you increase the equity, there is still operation to be involved; there is profit to be made and they don't look that good at the present time. MR. PARASIUK: Mr. Chairperson, we have been told stories of gloom and doom.

What the Minister has just told us is in fact the gloomiest picture I have heard about the Manitoba economy so far in this particular year. The Minister has said basically that it is virtually hopeless for small businesses to contemplate going into business. It would strike me that when interest rates are high that the proportion of financing that is equity has to be increased. The Minister is saying that the private sector isn't responding.

It would rather keep its money in the banks and collect high interest rates by itself, given that the private sector that isn't operating particularly efficiently as the engine of the economy. The Minister has just told us that it isn't. Is the government contemplating any measures of its own whereby the public would get into the area of providing venture capital for small businesses to ensure that there is some pickup in our economy from its present stagnating sense? MR. JOHNSON: Well the only answer I can give the Member is the same answer I gave the Member from Winnipeg Center.

We do not have a program at the present time. We are certainly aware of the problems, but as far as having a venture capital corporation or expanding into a Government Crown Corporation, there is no decision on that at the present time. MR. PARASIUK: Well, I'd like to point out to the Minister that on the next page he has a program of some $9 million which is not venture capital, it's a grant There is a difference between giving money away and, in fact, taking an equity position and I know of no private companies operating in a businesslike manner that really would contemplate spending $9 million in grants.

If you went to any of the major chartered banks, if you went to any of the financial institutions, they would not be giving grants away, they might be taking equity positions and I'm wondering why the government is willing and able from its own budgetary process to allocate some $9 million towards giveaways for companies, but isn't prepared to consider filling a vacuum when it comes to equity formation in Manitoba and launching an equity fund in Manitoba for small business.

Can the Minister indicate why you're prepared to give money away but you're not prepared to take equity positions, which strikes me as being far more businesslike and far better for the long term future of Manitoba? MR. JOHNSTON: Well, first of all, the grants are not $9 million, they are $2.8 million. The fact that the MR. PARASIUK: $.4 million? MR. JOHNSTON: . . . grant assistance through The Manitoba Research Council is $2.8 million, but that's recoverable now.

If you're referring to that figure of $9 million, if you're talking about The Enterprise Industrial Agreement the RSEI Program, which does have grants, the RSEI Program is a total of $5 million out of the whole $44 million. MR. PARASIUK: Tourism grants as well? MR. JOHNSTON: The Tourism grants, that's under Destination Manitoba. MR. PARASIUK: But they're still grants. MR. JOHNSON: It's another agreement that is with the Federal Government at the present time.

The Enterprise Manitoba under The Enterprise Manitoba RSEI loans or grants to small business are $5 million out of The Enterprise Manitoba Program of $44 million, which the Federal government pays 60 percent and we pay 40 percent MR. PARASIUK: That wasn't my question as to what percentage. My statement was that there appeared to by $9 million in grants.

The Minister now says it's $5 million but I see at least another $2.3 million, probably in The Tourism Program for grants as well, so we're starting to get a substantial giveaway program by this government of a grant nature with respect to the general area of business development and I asked the Minister why the government is prepared to provide $5 million, $7 449

Monday, 9 February, 1981 mill1on. $8 million in grants, giveaways directly to companies. while at the same time it isn't prepared to consider an equity fund for small businesses. Because I was told over and over again that small business does not want handouts, that small business does not want grants. rather small business wants to be given a fair chance and a fair chance would be access to capital. MR. JOHNSTON: First of all, under The Destination Manitoba Program the grants to date for The Destination Manitoba Program have been grants to either fairs or the Ukrainian festival. MR. PARASIUK: Tourism grants. MR.

JOHNSTON: Tourism grants, yes. There are tourism grants to assist those particular organizations that hold festivals throughout Manitoba in advertising tor their carnival. MR. PARASIUK: You know maybe you can just give me a list of that, but I'd just like to get an answer as to why the government is prepared to give money to companies and is not prepared to consider an equity fund tor business, especially small business.

As I said business people come up to me and say they do not want handouts, they want fair access to capital and they say that the money markets, the financial institutions. tend to favour the big established companies. They said if we only had access to capital. if we only had a fair chance, we would then be entrepreneurs. So I can't understand why we'd want to give the money away if they don't want the money to be given away but rather they just want a fair access to capital and the Minister hasn't been able to.

You know he's been sort of skirting this particular question. and I've asked it very directly and I want a direct answer from the Minister on it. MR. JOHNSTON: Well, The Enterprise Manitoba Program is a program of grants specifically set up with the Federal Government and I've explained this three years in a row. specifically with the Federal Government under the RSEI Program to assist the formation of small business in the rural areas. It's a grant of 50 percent up to $30,000 for a new business in the rural area or 50 percent up to $18,000 for expansion.

Now that was done in an agreement made with the Federal Government on the basis that small business did not have the access to the DREE Programs. the EDP Programs and other programs. It was set up also that it would be done on the basis of recommendations of boards, private people within the areas to make recommendations on the applications that come forward. to assist a special program for the rural area of Manitoba. The grants to date are $1.1 million approximately from the Provincial Government's share; they're a forgiveable loan. MR.

PARASIUK: But could the Minister just tell me why the government in its negotiations with DREE and in its own program, why it is not prepared to consider an equity fund instead of a grant program, instead of a giveaway program. Have businesses asked tor giveaways or have they asked for fair access to capital? MR. JOHNSTON: We are in the program because we believe it's a good program for rural Manitoba, but we are not prepared to take an equity position in those businesses. We will work with the businesses with our small enterprise development centres.

We do all of those type of things to keep them advised on business practises, etc., but we are not prepared to take an equity position in those businesses. The program wasn't set up for the government to get into business. The program was set up to expand business in rural Manitoba. MR. PARASIUK: So you are prefer giveaway programs to equity programs on the basis of supposed business practise. MR. CHAIRMAN: The Member from Inkster is next in that case. MR. SIDNEY GREEN: Mr.

Chairman, I think that if I tried to answer for the Minister he won't accept my answer, but one of the reasons it is advisable to go into a grant program rather than an equity program is that when you go into a grant program you don't lose money, because money can't be lost if it's given away and the Federal Minister in charge of these programs went on record as saying that we don't like to see it on the books and therefore if we give it away it's no longer on the books and this has been traditionally Liberal and Conservative business acumen. You don't take a loss when you give money away.

The New Democratic Party would take the same money, advance it to a business in either equity or loan and next year if it didn't turn out well you'd see a red figure and the Minister would start yelling about your losses. So I would think that we should have learned from that. That this is Liberal­ Conservative business acumen and expertise collaborated in both by the Federal Government and the Provincal Government and let us face it. We participated it in, although I am happy to say we protested every year.

We said that the DREE money was not the way of dealing with these problems and it was given away in the hundreds of millions of dollars throughout this country. Hundreds of millions of dollars. But we said that if it's going to be given, and Manitoba does not participate we will be financing other provinces while forgiving it ourselves and there was no alternative to participate in the program. (Interjection)- No, not the DREE grants. We didn't cost share it but we took them and I say that we had to take them and that any province that doesn't take them is foolish.

But let's not turn this into businesslike transactions. The fact is that it is an embarrassment to the free enterprise system, that the government has to finance and provide social assistance to needy industrialists like Massey-Harris and Chrysler Corporation $400 million; 10 Saunders in one year, 10 in one year and I don't hear my colleague from the Conversative Party and from the Liberal Party screaming about the incompetence of these entrepreneurs who lose $400 million, who require social assistance to the extent of $400 million in one year, but that is the only basis upon which the system can operate.

It's the only basis upon which it operated years ago and it has been a consistent failure, but if you don't put it on the books, you don't show red figures and you don't show a loss and the Federal Minister in charge of DREE was good enough to say so. That the Minister of Finance when 450

Monday, 9 February, 1981 asked. the former Minister of Finance, Mr. Turner, when asked why don't we give these in loans instead of grants, he said it would clutter up the books and we'd have these outstanding accounts payable. And we don't know how many of these businesses fail and we don't know how many succeed and none of them are brought before a committee where the members of the public can look and see what is happening with their money. And that's another advantage, is it not Mr.

Minister, of grants, rather than taking positions, because if you take positions and the public still has an interest in it then it comes betore committee members, such as the Member for Sturgeon Creek and for the Minister of Corrections who will phone San Francisco. These are patriotic Manitobans and ask them whether really they're getting a good deal out of buying buses or we will get an editorial in the Winnipeg Free Press.

Believe it or not these patriotic Manitobans who wrote an editorial in the Free Press urging the City of Winnipeg not to buy Flyer buses of all things, the bus factory in the City of Winnipeg, and the editorial in the Free Press urging them not to buy our buses and writing further editorials talking abouts defects in manufacturing while we are bidding in Calgary. That's right, so the rules change when the public is involved. When the public is involved it is not stop down-mouthing Manitoba, such as the Minister now says that the Opposition is the problem, they are poor-mouthing the Province.

When it's the public involved, when it's the public's money, when it's the public trying to do a job, poor­ mouthing is the rule for both Liberals and Conservatives. Mr. Chairman, this is old straw and I will admit it, but the fact is that it should be said that there are good and cogent reasons. If the Member for Transcona is asking them and the Minister is not giving them, then I'm giving them. Those are the reasons. I am more concerned, Mr. Chairman, and I guess it's like first things come first. I used to be concerned with what development opportunities are available in the Province of Manitoba.

How can we create greater development opportunities? I am now concerned, Mr. Chairman, because first things come first, how to keep what we've got. How do we keep what we've got when we see the erosion that's taking place on the industrial scene in the Province of Manitoba? Is there something we can do to keep what we've got and then talk about future development - and I will specifically go, Mr. Chairman, to the meat packing industry.

Ever since I was a child I was aware that Winnipeg was a transportation center and a center of meat packing, and of course the giants, the big three were all located in the Province of Manitoba, Swifts, Burns, and Canada Packers. The big three are no longer located in the Province of Manitoba because one of the big three has left, and I am concerned, Mr. Chairman, with whether or not there is a contingency plan being undertaken by his department with respect to maintaining Manitoba as a center of meat packing in Canada, because the very same considerations, Mr.

Chairman, that did apply to Swifts could well apply to the other big two. You know it's like, "and then there were none". Swifts has never demonstrated to the people of the Province of Manitoba that on the basis of its investment in our province and its write-offs and its depreciation and the amount of market that it had here, that it did not have indeed a profit or a positive cash flow in this province. All they said was that it was no longer economical to maintain a Manitoba plant.

But no longer economical means that if you've got a piece of property that is valued at so many millions of dollars and it is available to be sold as real estate and will realize - and I'll use figures which are not intended to relate to the actual because I don't know the actual - but if the property is valued at $2 million and can realize, without any effort at all, without any investment, without the plant and equipment an income of $200,000 a year without moving, then the fact that the company continues to operate on a cash flow or is earning $50,000 does not make it economical, particularly when the same money can be earned in a central plant in Ontario and the Manitoba plant can be phased away and nothing is lost on the market.

When Swift's announced that it was closing and therefore eroding the big three, it was suggested, Mr. Chairman, not that the public of Manitoba bolster another bankrupt industry such as the Minister interpreted it, what was suggested was that the public of this province immediately continue to produce the product that was being produced by Swifts, and if Swifts is a copywrited name which I am sure it is, you could use Speedys or anything else; Jets. If that product was being sold and if the market is dome