Manitoba Hansard — 15 June 1992 (Sitting 86A, 35th Legislature, 3rd Session)

35-3-86a

Manitoba — Debates (Hansard)

Third 8ess lon • Thirty-Fifth Legislature of the Legislative Assembly of Manitoba DEBATES and PROCEEDINGS (HANSARD) 39-40 Elizabeth II Published under the authority of The Honourable Denis C. Rocan Speslcer VOL. XLI No. 86A • 1 :30 p.m., MONDAY, JUNE 15, 1992 Printed by the Office of the a.-ns Printer, Province of AIIIIJ/tobll ISSN 0542-5492

MANITOBA LEGISLATIVE ASSEMBLY Thirty-Fifth Legislature Members, Constituencies and Political Affiliation NAME ALCOCK, Reg ASHTON, Steve BARRETT, Becky CARSTAIRS, Sharon CERIUI, Marianne CHEE MA, Guizar CHOMIAK, Dave CONNERY, Edward CUMMINGS, Glen, Hon. DACQUAY, Louise DERKACH, Leonard , Hon. DEWAR, Gregory DOER, Gary DOWNEY, James, Hon. DRIEDGER, Albert, Hon. DUCH ARME, Gerry, Hon. EDWARDS, Paul ENNS, Harry, Hon. ERNST, Jim, Hon. EVANS, Ciif EVANS, Leonard S. FILMON, Gary, Hon. FINDLAY, Glen, Hon. FRIESEN, Jean GAUDRY, Neil GIUESHAMMER, Harold , Hon. HARPER, Elijah HELWER, Edward R.

HICKES, George LAMOUREUX, Kevin LA THL IN, Oscar LAURENDEAU, Marcel MALOWAY, Jim MANNESS, Clayt on, Hon. MARTINDALE, Doug McALPINE, Gerry McCRAE, James, Hon. MciNTOSH, Linda, Hon. MITCHELSON, Bonnie, Hon. NEUFELD, Harold ORCHAR D, Donald, Hon. PENNER, Jack PLOHMAN, John PRAZNIK, Darren, Hon. REID, Daryl REIMER, Jack RENDER, Shirley ROCAN, Denis, Hon. ROSE, Bob SANTOS, Conr ad STEFANSON, Eric, Hon. STORIE, Jerry SVEINSON, Ben VODREY, Rose mary, Hon. WASYL YCIA-LEIS, Judy WOWCHUK, Rosann CONSTITUENCY Osborne Thompson Welli ngton River Heights Radisson The Maples Kildonan Portage Ia Prairie Ste .

Rose Seine River Roblin- Russell Selkirk Concordia Arth ur-Virden St einbach Riel St. James Lakeside Charleswood Interlake Brandon East Tuxedo Springfield Wo lseley St. Boniface Minnedosa Rupertsland Gimli Point Douglas Inkster The Pas St. Norbert Elmwood Morris Burrows Sturgeon Creek Brandon West Assiniboia River East Rossmere Pembina Emerson Dauphin Lac du Bonnet Transcona Niakwa St. Vital Gladstone Turtle Mountain Broadway Kirkfield Park Ain Aon La Verendrye Fort Garry St.

Johns Swan River PARTY Liberal NDP NDP Liberal NDP Liberal NDP PC PC PC PC NDP NDP PC PC PC Liberal PC PC NDP NDP PC PC NDP Liberal PC NDP PC NDP Liberal NDP PC NDP PC NDP PC PC PC PC PC PC PC NDP PC NDP PC PC PC PC NDP PC NDP PC PC NDP NDP

4594 LEGISLATIVE ASSEMBLY OF MANITOBA Monday, June 15, 1992 The House met at 1 :30 p.m. PRAYERS ROUTINE PROCEEDINGS READING AND RECEIVING PETITIONS Mr. Speaker: I have reviewed the petition of the honourable member for Wolseley (Ms. Friesen), and it com plies with the privileges and practices of the House and complies with the rules. Is it the will of the House to have the petition read?

The petition of the undersigned citizens of the province of Manitoba humbly sheweth that: WHERE AS the Dutch elm disease control program is of primary importance to the protecti on of the city's many elm trees; and WHERE AS the Minister of Natural Resou rces himself stated that, "It is vital that we conti nue our active fight against Dutch elm disease in Manitoba ," and

WHEREAS, despite that verbal commi tment, the gov ernment of Manitoba has cut its funding to the city's OED control program by half of the 1990 level, a move that will jeop ardize the sur vival of Winnipeg's elm tr ees. WHEREF ORE you r petitioners humbly pray that the gover nment of Manitoba may be pleased to request the Minister of Natural Resources (Mr. Enns) to consider restori ng the full funding of the Dutch elm disease control program to the previous level of 19 90. As in duty bound your petitioners will ever pray. MINISTERIAL STATEMENTS AND TABUNG OF REPORTS Hon.

Ha rry Enn s (Minis ter of Natural Resources): Mr. Speaker, I am pleased to table the Suppleme ntary Information for Legislative Review of the Expenditure Estimates of the ministry of Natural Resources for the year '92-93. Hon. James McCrae (Minister responsible for Constitutional Affairs): Mr. Speaker, I have a short state ment for the House. As honourable members of this House are aware, last week's multilateral meeting on the Constitution ended without a consensus on an overall package of constitutional amendments.

Howe ver, ministers and aboriginal leaders agreed that discussions should con tinue and that we should stay in close touch . We all undertook to review a proposal put forward by Saskatchewan for a new House of the Federation , with equal numbers of representatives per province but with a mixed voting syste m under which equality would apply on some issues and a weighted voting system would apply on ot hers. We are still reviewing that option and discussing it with oth er pro vinces. As the Premier (Mr.

Rlmon) said last week, our strong preference is still the Triple-E model based on the principle of equality of the pro vinces. The equality principle remains sound, fair and fully justifiable. No one can convince me that our pro vince is not or should not be equal to every other prov ince in a reformed Senate . It seems stra nge, to say the least, that the federal go vernment and Ontario in particular should feel so threatened by an equal Senate .

The Triple-E proposals provide for mechanisms to assure the supremacy of the House of Commons, that they would also make the federal system a great deal mo re honest, open and credible. This week the Senate discussions will con tinue, and we remain hop eful that an acceptable solution can be fou nd. Although we did not resolve our diff erences on Senate reform last week, we did take a very important step forward in securing the federal gove rnment's support for stre ngthened wor ding for

Section 36(2), the equalization provi sion. We have argued consistently that better protection for equaliz ation is necessary to sustain essential services and to counterbalance proposals for devol ution. The Manitoba task force called for such a change, and we now have a clear commitment by the federal gove rnment to support it. The next steps in the ove ral l discussions are not cert ain. I understand that the Right Honourable Joe Clark is briefing the

4595 LEGISLATIVE ASSEMBLY OF MANITOBA June 15 , 1992 Prime Minister today and that federal plans might become clearer in the next day or so. When there are new developments, I will advise the House. I should add that I have distributed to the Leaders of the Of ficial Opposition and the Second Opposition (Mrs. Carstairs) copies of an unofficial rolling draft stat us report on the discussions as released by Mr. Clark last Thursday. Along with that docum ent is a short paper on possible elements of a political accord. Both documents are for refe rence only. Thank you, Mr. Speaker. * (1 335) Mr.

Gary Doer (Leader of the Opposition): I would just like to briefly respond to the minister's state ment. I would like to thank him for the stat ement and the copy of the rolling draft that the minister of national unity prese nted to the participants . Mr. Speaker, I want to deal with the statem ent of the Constitutional Affa irs minister on the basis ofthe Manitoba priorities, as articulated in the Manitoba all-party task force report and in the public hearings that took place in this provi nce. Number one, there was a strong desir e for aborigina l constitutional reform in a reform Constitution in Canada.

As we understand , there has been considerable progress made in this regard. As we also under stand it, the aborig inal leadership that is now part of the constitutional discussions is bringing forward a clear and articu late vision, a united vision on constitutional reform , which should allow us in this country to finally have the historic progress in this area that I think Manitobans desired in their public hearings and articula ted in those presenta tions. Second ly, Mr.

Speaker, the very major priority of Manitobans in the public hearings and in the report was for the strong national gove rnment with the ability to redistribute wealth from regions to regions and from individuals in our great country. There has been some progress made in the equalizat ion, and we certainly noted that in the rolling draft that we had received a couple of weeks ago, but there are a number of other issues remaining in the strong nati onal go vernment.

Medi care and post secondary education were the programs that most Manitobans felt were the No. 1 and 2 priorities within the strong national progr am. I note that there is no specific judicable wording dealing with EPF and the ability to maintain and enhance our national health care programs and our national post-secondary programs in this country. We supported the Premier (Mr. Filmon) on March 2, when he said he would not support the federal gove rnment becoming a post office box of Canada with the devolution of powers that were proposed in the Dobbie-Beaudoin repor t.

Those same devo lution of powers are contained within the ro lling draft that the minister provided to us. The same spending power pro visions that were in the Meech Lake Accord are not in the rol ling draft. We think that many of the areas in the ro lling draft do not represent a strong national govern ment and strong national areas that are the priorities of Manitobans. We want to note that for the minister. In the area of institutional reform , Mr. Speaker, in the Senate , we have read about the four or five proposals that we understand are now before the table.

We do not see any of those proposals dealing with the alie nation that was presented by 30 Manitobans, I think, when they supported the Triple-E Senate, the alienation of decisions like the CF-1 8. We see very little in the area of what can really happen in dealing with that alienation . I would ask the government to keep a very open mind on some of these issues. The National Energy Program for Manitoba is different than the National Energy Program for Alberta.

It is very important that we not just have symbolic institutional reform or political institutional reform that may be good for politicians but will not be cost effective for all Canadians. I would ask the government to very definitely look at that. In conclusion, Mr.

Speaker, in these final days or weeks or months-we do not know which-we would ask the government to make the issue of medicare and post- secondary education the issue of a str ong, national go vernment, the preeminent priority of the Man itoba gov ernm ent because it was the preeminent priority from the people of Manitoba when they presented their views and their visions at the public hearing. * (1 340) Mrs. Sharon Carstalrs (Leader of the Second Opposition): Mr.

Speaker, I have to say that I am deeply disturbed by the rolling draft which I received just minutes ago, because now we do have some texts; now we do have some agreements, it would appear. Maybe our Minister of Justice (Mr. McCrae) stood on his head a thousand times to say, no, no,

June 15 , 1992 LEGISLATIVE ASSEMBL Y OF MANITOBA 4596 no, but it would appear very clearly from these rolling texts that we do have drafts. In every single case, they mirror so much of what were fundamental objec tions by the people of this pro vince and this cou ntry to the Meech Lake Accord, whether it is the offloadi ng of federal powers in immigration, in housing, in tou rism, in labour market trai ning, in mining, in forestry. We are not going to have a checkerboard, because a checkerboard implies that .there are only going to be two colours on the board.

We are going to have a Rubik's Cube in terms of what our nat ion is going to look like if we allo w the kind of opting-out provisions and pro vince-by-province negotiation with program after program , which is afforded in this particular text. Mr. Speaker, the people of Manitoba spoke very eloquently about the need to protect the Charter, but throughout this rol ling draft, there are exte nsions of ideas to which the Charter will not apply. Now we will have the distinct society clause in the Charter. Now we will have aborig inal rights in the Charte r, which says that those groups will not be subject to Charter.

So do we now have a new Charter for this nation that says, if you belong to certain races, you will not be subjected to the Charter of Canada? That concerns me greatly. The last two meetings-or the one that the minister has just come from and the one that seems to be antici pated for la ter this week will be back discussing Senate reform , but they will not be discussing these other most fundamental difficulties that the Canadian people have with a changed Constitution. The minister, in his own remarks, indicated that they ha d achieved some com mitmen t on equalization payments.

Well, let us look at what it is, accor ding to this rolling text. It should be amended to add a commitment to ensure the provision of reasonable comparable economic infrast ructure of a national natur�nd no guarantee that it will. The Constitution should commit the federal gove rnment to consultation-consultation, but absolutely no guarantee that they have to do it. As I go through this text, I just bear in mind what my 23-year-old said to me last night on the phone when we were talking about all the newspaper stories.

My daughter went to the United States to do her undergraduate work and is now trying to make up her mind where to do her doctora te, whether in the United States or in Canada. She said, mom, why should I stay in Canada, because what they are talking about is not my country. When I read this document, this is not the country that I love, Mr. Speaker. INTRODUCTION OF BILLS 811110 1- The Statute Law Amendment Act, 1992 Hon. James McCrae (Minister of Justice and Attorney General): Mr. Speaker, I mo ve , seconded by the honourable Minister of Finance (Mr.

Man ness), that Bill 10 1, The Statute Law Amendment Act, 19 92 (Loi de 19 92 modi fiant diverses dispositions legislatives) , be introduced and that the same be now received and read a first time. Motion agreed to. Introduction of Guests Mr. Speeker: Prior to Oral Questions, may I direct the atte ntion of honourable members to the gallery, where we have with us this afte rnoon, from the Ecole Glenwood, sixteen Grade 6 stude nts. They are under the direction of Mr. Mireault. This school is located in the constituency of the honourable member for St. Vital (Mrs. Render).

Also, from the Winkler Elementary School , we have sixty Grade 5 students. They are under the direction of Lawrence Siemens. This school is located in the constitu ency of the honourable Minister of Health (Mr. Orchar d). On behalf of all honourable members, I would like to welcome you here this afte rnoon. ORAL QUESTION PERIOD Free Trade Agree ment Impact on Manufacturing Industry Mr. Gary Doer (Leader of the Opposition): Mr. Speak er, in May of 19 88, we had 65 ,0 00 manufactu ring jobs in Manitoba. In September of 1988, the Premier (Mr.

Film on) said to the people of Manitoba that based on his empirical stud y, 12 ,000 to 15 ,000 new jobs would be created by free trade with the United Stat es. In May of 19 92, the mo st recent statistics available to us, ther e are presently 51 ,000 Manitobans working in manufactu ring, a decline of 14,000 goo d-paying jobs in our province and in our

4597 LEGISLATIVE ASSEM BLY OF MAN ITOBA June 15 , 1992 economy, a decline of 21 percent in manufacturing jobs in this provi nce. Every day we get another small story-N orthern Telecom on Thursday, Nabisco last week-of manuf acturing jobs being lost in this province and to the people of this pro vince. The Premier has stated that they had an empirical study about how many jobs we would receive under free trade with the United States. We know we have declined by 14 ,000 jobs.

I would ask the Premier: Why have we declined by 21 percent in one of the most vital industries we have in this pro vince for the opportunity of people in this provi nce? * (1 345) Hon. Eric Stefanson (Minister of Industry, Trade and Tourism): Mr. Speaker, this question is very similar to ones that the Leader of the Opposition (Mr. Doer) has asked before in term s of recognizing th e impact of other factors in terms of our exports and our trad ing relati onship.

One need look no further than what is happening in other provinces and th e impact of a nation-wide and, in many cases, world-wide recession, looking at the value of th e Canadian dollar o ver the last several months and years and several other factors that have impacte d in terms of our trade relationship. Even keeping that in mind, if you look at the raw dollars, Mr. Speaker, you will realize that from '88 to 1992, the exports of Manitoba to the United State s have gone up by in excess of $100 million.

Looking ahead to the impacts on the economy in terms of the economic indicato rs of Manitoba for the years 1992, 19 93, 19 94, I have outlined them on many occa sions for the Leader of the Opposition and his party in term s of the expected sorld perf ormance of the pro vinc e of Mani toba relative to other jurisdictions. When he points to the manufactu ring sector, in 19 92 we will have the highest private investment in the manufac turing sector of any province in all of Canada.

In terms of our performance, of our retention of jobs in the manufacturing sector, while we are not necessarily pleased, relative to other provinces, we still have the fifth best retention and growth rate of any pro vince. So, clearly, when you talk about free tr ade, when you talk about that issue, once you would recog nize, there are many issues, many aspects of that and many things that affect the final numbers, Mr. Speaker. North American Free Trade Agree ment Government Withdrawal Mr. Gary Doer (Leader of the OpposHion): Mr. Speaker, I would have thought the Premier (Mr.

Almon), as Chair of the Econ omic Commi ttee of Cabi net -t hat $800,000 secretariat that was supposed to give us some impact study of what was going on our economy-could have made the distinction between the fact that Manitoba's manuf acturing base has gone down 21 percent since free trade has co me in, the United Stat es' manufac turing base has only gone down 6 percent in the same recessionary period and that, yes, we are the same as other provinces of Canada with manufactu ring. All of us have been clobbered by free trade and gone down about 20 percent.

The Minister of I, T and Ti s absolutely correct , but what he has to com pare it with is United Stat es. A further question to the First Minister. Mr. Speaker, the Canadian Manufa cturing Associa tion, which was absolutely in support of free trade with the United State s, has now put up a survey cautioning us on free trade with Mexico. Michael Wilson has now publicly stated that there are going to be changes to the Canada-U.S. Free Trade Agreement as part of the free trade negotiations with Mexico.

In light ofthe fact thatthat is a contradiction to one of Manitoba's six term s, would the Premier now commi t himself to joining Premier Harcourt and Premier Romanow in not supporting the free trade agreement with Mexico? Let us get our own country stable and our own manuf actu ring base stable before we go any step further. Hon. Eric Stefanson (Minister of Industry, Trade and Tourism): First of all, I should correct the Leader of the Opposi tion. He has done this once before back on, I believe it was, May 19 , where he indicates and refers to Premier Romanow and the position of Saskat chewan.

I have been at Trade ministers' meetings and recently speaking to the economic minister in Saskat chewan last week. Saskatc hewan has not taken a position yet publicly. The honour able Leader of the Opposition referred to that in Hansard once before . I do not know if he knows something we do not know in terms of what the province of Saskatchewan is doing, but I have asked them and I have been at the meetings, and they have not indicated a position yet. We are still awaiting for the

June 15 , 19 92 LEGISLATIVE ASSEMBL Y OF MANITOBA 4598 position of Saskat chewan. So it is quite interesting that the Leader of the Opposition seems to have some inside knowledge in terms of what is happening in other pro vinces. Taking that one step further, Mr. Speaker, the Leader of the Opposition referred to it on May 19 in this House,

whereas the letter from Premier Harcourt to the Prime Minister was June 4. Once again, str ange things are happening in terms of the positions and in terms of the ideological bent that one party has instead of looking at all aspects of an issue. We have outlined six co nditions. There is no final agreement yet. When that final agreement is put forward by the federal government, we will evaluate it in relati onship to our six conditions and formulate a final position at that time. Mr. Doer: I will give the minister a copy of Premier Romanow's state ment at the last economic meeting. I am sure the Premier (Mr.

Filmon) has a copy of it. I am sure the Premier discussed this with his two I.C. of the economy at his most recent economic meeting. But I have the stat ement of Premier Romanow, and I will want an apol ogy, for the minister opposite. Mr. Speaker, the fe deral go vernment, in the Dallas draft, clearly was renegotiating conditions of the Free Trade Agreement with the United Stat es. It clearly breached at le ast five out of six conditions that this government has esta blished. Again, today, we have confirmation-on top of the tremendous job losses -t hat the federal government is indeed changing the Canada-U .S. A.

Free Trade Agreement. You said it was one of your condi tions. I would ask the Premier now-he has changed his word once in going from opposition to free trade with Mexico to the six conditio ns-will he go back to his original word and go back to his original conditions and now oppose the proposed free trade agreement with Canada, United States and Mexico? Our economy cannot afford the loss of many more jobs. • (13 50 ) Mr. Stefanson: Mr.

Speaker, there will be no apology, because Hans ard clearly shows, on May 19 , and I will quote from the Leader of the Opposi tion: The Premier of Saskatchewan and the Premier of British Col umbia have called on a full stop to free trade negotiations with Mexico because of its impact on agriculture, textiles and other industries. A letter written from Premier Harcou rt of British Columbia is dated June 4, some two or three weeks afte r the announcem ent by the Leader of the Opposi tion. Certainly, in terms of the position of Saskatc hewan, I spoke to their economic minister last week, and they have no posi tion.

I have been at the Trade ministers' meetings, unlike the Leader of the Opposition. So there will be no apology. He seems to have inside information that others are not privy to, Mr. Speak er. In terms of the six conditions, we have made them very clear. We stand by our six conditions. There is no final agreement. The Leader of the Opposition is responding to media repor ts and other suggestions that he is form ulating, again, his position based on one ideological point of view that has no flexi bility. It is so rigid.

It cannot address all aspects of a trade deal in terms of what is in the best interest of Manitoba and what is in the best interest of Canada. We do not operate that way, Mr. Speaker. We listen to all sides of an issue, and we will formu late a position that is in the best interest of Manitobans and Canadians, unlike the ideological bent of the opposition party. AIDS Education Projects Funding Ms. Judy Wasylycla-Lels (St. Johns): The prevention of the spread of the deadly disease AIDS is an urgent matter for all of us.

It takes certain skills and cultur al sensitivities and, of course, the lang uage to address this issue among our newcomer com munities. The AIDS education project for immigrants and ref ugees has been a successful two-year project , funded by the federal and Manitoba governments until this year. It meets this government's stated commitments for health care refo rm. It meets this go ve rnmen t's stated com mitmen ts for multicultura lism. It is unique in all of Canada .

I would like to ask the Minister of Hea lth: How does this minister justify denying the $50,000 necessary to keep this AIDS education project alive, something the minister did by way of a letter on June 1 0, when he said funding is no longer available to the AIDS education project for immigrants and refu gees? Hon. Donald Orchard (Minister of Health): Mr. Speaker, my honourable friend might also be aware

4599 LEGISLATIVE ASSEMBL Y OF MANITOBA June 15 , 1992 that the federal govern ment put in a little over $60,000 over a two-year period of time. It is my understanding that the federal gov ernment is not choosing to con tinue their funding, which then would transfer the entire cost to the pro vince of Manitoba. Mr.

Speaker, in te rms of prioritization of our grants to all funded agencies, we analyzed a number of factors, and in approving an annual grant of $164 ,800 to Planned Parenthood of Manitoba to continue their Immigrant-Refugee Health Program , we believed there was a reasonable fit for some of the successful initiatives in the two-year pilot project jointly funded by the federal government with the withdrawal of the federal gov ernment funding.

We believe that the best of the program may well be achieved through the $164 ,800 funding to Planned Parenthood, and the staff of the department are working with the two organizations now to see if there is an equitable way to make those two program s fit, Sir. Ms. Wasylyc la-Lels: Mr. Speaker, we are talking about two separate programs prov iding different needs and serving different comm unities.

I would like to ask the minister if he will reconsider this decision in light of an independent analysis completed as of May 1992 of this AIDS education project, which clearly states that this project has been highly successfu l and that it must be continued in its form as it is now. To try and absorb it into any other program would spell disintegration of this initiative. * (1 355) Mr. Orchard : Mr. Speaker, my honourable friend says this is an entirely different communi ty. These are newcomers to Manitoba.

We have provided funding for an immigrant health program through Planned Parent hood for one year of $164 ,800. Now, Mr. Speaker, one of the observa tions, for instance, by the Social Planning Council of Winnipeg is that various levels of government and various other funding sources fund a plethora of programs in separate agencies dealing with somewhat similar issues in the same geographic areas of the provi nce.

Here we have a program which we are putting almost $1 65,000 into this year, through Planned Parenthood, for Immigrant Refugee Health Program , involving a multitude of language capability trai ning, et cetera. We believe in today's context that a marriage of those two program s is achievable, appropriate and effectively utilizing management resources to deliver AIDS progr amming to newcomers to the prov ince of Manitoba, Sir. Ms. Wasylycla-Lels: Mr. Speaker, you know this gov ernment talks like Tommy Dougla s- Mr. Speak er: Order, please. Question. The honou rable mem ber for St.

Johns with your question, please. Ms. Wasylycla-Lels: Would the minister, in light of his health care reform Action Plan--<:Onsidering it costs $1 50,000 to treat one person with AIDS from diagnosis to death-would this minister reconsider his heartless decision and agree to find $50, 000 for a cost-effective AIDS prevention program in the immigrant refugee commu nity? Mr. Orchard: Mr. Speaker, with as much common reason as I can putto the answer, is my honourable friend saying that every time a single disease entity comes along that we must fund a separate agency to deal with the disease entity? Mr.

Speaker, this is AIDS. That is correct; my honourable friend says this is AIDS. That is exactly why two years ago-as a matter of fact, Sir, three years ago, our AIDS pamphlet was translated into a number of immigrant refugee languages, something my honourable friend in government failed to do.

That is why we believe, within the existing resources of the department, withi n $1 65,000 of annualized funding to Planned Parenthood to refugees on health issues, with the resources of the printed pamphlets in a number of languages, with the back-away of the federal gov ernment on a two-year pilot project, that we can marry the benefit of this project in an existing program through Planned Parenthood and not duplicate bureaucracies all across the province. Constitutional Proposal National Standards Mrs. Sharon Carstalrs (Leader of the Second Opposition): Mr.

Speaker, in the Meech Lake Task Force on the Constitution and more recently the task force on the Constit ution, Manitobans spoke very eloquently about the need for a strong central government. In the rolling draft that we have been pro vided, it is clear that no such strong go vernment will exist. No longer will the federal government have a role to play in culture, labour market trai ning, immigration, forestry, mining, tourism, housing, recreation, municipal and urban aff airs.

June 15 , 1992 LEGISLATIVE ASSEMBL Y OF MANITOBA 4600 Can the Premier (Mr. Filmon) of the province tell this House today if he believes this new direction, found in the rolling draft, meets the expectations of Manitobans, as found in the two task force reports? Hon.

James McCrae (Minister responsible for Constitutional Affairs): One of the dangers of making a rolling draft available to the Leader of the Liberal Party is that she takes that draft and assumes, contrary to what I have previously said repeatedly in this House and elsewhere: nothing in this document is agreed to until a package is agreed to. * (1 400) The honourable member's concerns are well founded, and they are very much on our minds in the discussions we have been having.

One of the central elements of the all-party task force report, headed up by Professor Wally Fox-Decent, is preserve a strong central government so that smaller provinces, like Manitoba, can be offered and afforded the protection they need and the potential, the opportunity they need to come into this next century and emerge as a bigger province, as a "have" province. That is our dream here in Manitoba shared by most people in this House-l would hope all. So when the honourable member refers to the various areas of powers and says that these are devolved to the provinces-untrue. That is just not true.

Manitoba and other provinces may or may not decide to get into that kind of an arrangement. If we do not decide to do that, there are also safeguards there to ensure that the federal role and participation in the various programs remains. So you have to remember, Mr. Speaker, that nothing here is agreed to until everything is. Mrs. Carstalrs: Mr. Speaker, this is what we keep hearing: nothing is agreed to. Yet we know that when the final package comes down, we will be told it is a seamless web, that you cannot uncross a "t" and you cannot undot an "i" or everything falls apart.

So it is absolutely imperative that the discussions of these rolling texts take place now. Will the Minister of Justice tell this House why, throughout this rolling draft, they use the words •national objectives" and not "national standards"? It was the words "national standards" which were the words of Manitobans at both task force hearings. Mr. McCrae: Mr. Speaker, you will not find me referring to anything that we have been doing as a seamless web.

I was about to say, the honourable member for River Heights referred, in her response to my ministerial statement, to a Rubik's Cube, and that is how I have referred to this process as well, except in a different way. You do not know about that Rubik's Cube; you do not know that you have completed the puzzle until all of the pieces are in their proper places. That includes things like equalization, unlike what the honourable Leader of the Opposition (Mr. Doer) said a little while ago. The language we have on equalization today is much stronger than the language that he was referring to a couple of weeks ago.

It has improved from that point. We need that kind of comfort on programs like equalization to ensure that devolution of power does not have the effect feared by the honourable member for River Heights (Mrs. Carstairs). So what we are trying to do, Mr. Speaker, is to ensure that the package comes out respecting the equality of the provinces while, at the same time, ensuring a strong central government. It is a difficult thing to put together as the time has past demonstrated and the fact that we do not have a consensus that we can take to the people.

The honourable Leader of the Uberal Party also, conveniently or otherwise, forgets that we are not finished until the people of Manitoba have been heard from in this process. Mrs. Carstalrs: Mr. Speaker, if the media reports are correct, all of the time and energy of the last meeting of ministers was spent on the discussion of Senate reform. If there is a meeting this week, all of the discussions are to take a role around the issue of Senate reform. Can the Minister of Justice tell us, if not all of the other issues have been agreed upon, why are the ministerial meetings only discussing Senate reform? Mr.

McCrae: Well, Will Rogers used to say, alii know is what I read in the paper, Mr. Speaker. Clearly, that is all that the Leader of the Liberal Party has been reading and is reading in the paper. There are a lot of other things going on; as the honourable Leader of the Liberal Party ought to understand. Having played an important role in the last go around, that honourable member, of all honourable members, knows there is more being discussed

4601 LEGISLATIVE ASSEMBLY OF MANITOBA June 15 , 1992 than simply the matter of Senate reform. It happens to have captured the imagination of the news media, because who would have thought two years ago that we would still be talking about a Triple-E model of Senate reform? I suggest that we have achieved something in that respect. In the last round of discussions, Mr. Speaker, in addition to the issue of Senate reform, much discussion was had about aboriginal matters, and the honourable member for Rupertsland (Mr. Harper) was there and can bear that out.

There was much said about-well, not so much said about equalization, because the federal government did some research and decided on some language that could be acceptable to them which would do exactly what the Leader of the Liberal Party is suggesting, and that is to preserve a strong central government ihCanada. Manitoba Grants Advisory Council Review Ms. Marianne Cerllll (Radisson): Mr.

Speaker, the report in the paper today is not the first time we have heard concerns that this government attempts to control activity in the multicultural community, especially dispel challenges to the government by threatening groups' access to grants. My question is for the Minister responsible for Multiculturalism.

Since the granting function of the Multic ultural Grants Adv is ory Council was previously a responsibility of the Intercultural Council, will the minister deal with the concerns in the community regarding multicultural grants by including the Grants Advisory Council in the review of MIC so we have a comprehensive review of what is happening with respect to this community? Hon. Bonnie Mitchelson (Minister responsible for Multiculturalism): Mr. Speaker, I guess I would not have felt that the process of a multiculturalism act was complete unless I heard some opposition from Wade Williams. It has happened today.

So it has happened today; it is in the paper now . He has never been known to be a friend of this party. I believe he was multicultural adviser to the Liberal Party at one time, and he might now be a multicultural adviser to the New Democratic Party. Mr. Speaker, The Multiculturalism Act that is before the House right now is

an act that is the consensus of those that I held consultations with throughout the community, and it will remain intact. Ms. Cerllll: The minister is suggesting that she is not going to listen to any demonstrations for amendments to the act. Is it government policy to discourage appeals to the Manitoba Grants Advisory Council and tell applicants that they are lucky they are getting anything? H that is not government policy, why is that happening, and why is that agency not being reviewed when MIC is? Mrs. Mitchelson: Mr. Speaker, that is quite a serious allegation from the New Democratic Party.

H, in fact, there is any information that the member for Radisson has that would indicate that in any way there has been interference-and I do want to indicate, before the Multicultural Grants Advisory Council took over, under the Manitoba Intercultural Council, there was not even an appeal process. So people were told "yes• or •no, • and when they were told •no, • there was no vehicle that they could use to appeal that decision. There is an appeal mechanism in place today, and anyone who feels that they have been unfairly treated can appeal the process. Multicultural Legislation Amendments Ms.

Marianne Cerl lll (Radisson): Given the history of interference by this government in these comm unities, how can we be assured that communities are going to feel free to propose amendments to the multicultural act that is before the House? Hon. Bonnie Mitchelson (Minister responsible for Multiculturalism) : Mr. Speaker, I have great difficulty believing in fact that people are afraid to speak out. This government has never left the impression with anyone in Manitoba that they would be penalized in any way for speaking out. This is a democratic society, Mr.

Speaker, and we value the input and the opinions of everyone. I respect everyone speaking out, saying what they believe they should say. That is part of a democracy, and that will continue in this country. I respect everyone's opinions. That does not necessarily mean that I agree with every opinion that is presented, but I respect people speaking out and saying what they think and what they believe.

June 15, 1992 LEGISLATIVE ASSEMBLY OF MANITOBA 4602 DOTC Pollee Force Funding Mr. Elij ah Harper (Rupertsland): Mr. Speaker, my question is to the Minister of Justice. The Aboriginal Justice Report, along with many other people, praised the Dakota Ojibway Tribal Council at least for their work. As a matter of fact, the AJI recommended that it receive additional funding. Regretfully, like other recommendations, the government has not acted on the recommendations. Will the Minister of Justice make a commitment today to the DOTC police to ensure that their work and their program continues? * (1 41 0) Hon.

James McCrae (Minister of Justice and Attorney General): The honourable member knows how the system works when it comes to working with the federal government. Sometimes it is difficult, and he knows that. We are getting some fairly positive signals from the federal government more recently though with respect to the Dakota Ojil..way Tribal Council probation services which has been in such grave danger for the last little while.

We are hopeful that the federal government will, in a very short period of time, make a very positive announcement with respect to the continued existence of that very successful probation service. With respect to the DOTC police and the new regime the federal government wants to set up, it is interesting, Mr. Speak er, that the federal government would like to begin this new model with the DOTC police, because it just happens that if we adopted the federal model immediately, the provincial government would immediately begin contributing a far larger share than we are now.

So I have problems accepting the federal government's view that that is the proper place to start with aboriginal policing, because all it is is a way for the federal government to unload the responsibility it has, until this date, been carrying on.

This government and the previous government have been supporting the DOTC police department for a good number of years now, and we want to see that kind of thing continue, but we have not made a determination that we ought to dive in with both feet on the DOTC police proposal, thus allowing the federal government to offload responsibility that has been carried for a number of years. Mr. Harper: Mr. Speaker, my supplementary to the same minister.

Virtually all of the provinces have begun negotiations or are in the process of negotiating with the federal government regarding the aboriginal policing, yet here in Manitoba, the minister has not taken a position at an and has not even met with the DOTC police. Will he meet with them now and start discussing the arrangements? Mr. McCrae: In the past, Mr. Speaker, I have met numerous times with representatives of the DOTC police, and there is no point having a meeting with the federal government not being there to be a full partner in those discussions.

I think that is the difficulty that we are experiencing, but as I said in the first answer, there is no point starting with DOTC. They are going now. They need to be funded to a higher level; there is no question about that, but in the interim period, thatfunding ought not to be made available by the province but by the federal government.

We are interested in getting together with the federal government and aboriginal people to talk about more appropria te policing in their communities, but we are not about to let the federal gov ernment off the hook just because the honourable member says we ought to allow that to happen and we ought to start paying all the bills. Under

Section 91 (24) of the Constitution, aboriginal people and lands reserved for them are the responsibility of the federal government, and we will not let them away from their responsibility as easily as the honourable member would urge. Mr. Harper: To the same minister: Will he at least meet with the DOTC police chief and also at least maybe agree to fund the DOTC police force until the end of the fiscal year, until the tripartite agreement has been made between the province and the federal government? Will he ensure that will happen? Mr.

McCrae: I would be interested in meeting again with DOTC police if I thought that there was going to be something new to be discussed. The point that I make with the honourable member is that I will not use a meeting like that to go to the meeting to say, all right, I will do what the honourable member for Rupertsland (Mr. Harper) says and just sort of roll over and let the federal government off the

4603 LEGISLATIVE ASSEMBLY OF MANITOBA June 15, 1992 responsibilities it has been carrying. I will not do that. Now, if the meeting is for some other purpose, then, sure, I would have a meeting with the DOTC police representatives. I have had them in the past. Multicultural Legislation Manitoba Grants Advisory Council Mr. Kevin Lamoureux (Inkster): Mr.

Speaker, we find that what the government is doing by putting the Manitoba Grants Advisory Council into legislation, into the multicultural act, they have a major flaw in the sense that what they are doing is they are legalizing, if you will, the politicization of multicultural grants. I am going to ask the minister responsible to do the honourable thing, because there is absolutely no need to have MGAC in the multicultural act. Will she withdraw that clause from the act? Hon.

Bonnie Mitchelson (Minister responsible for Multiculturalism): We have before us a piece of legislation that the majority of Manitobans, specifically those within a lot of the ethnocultural communities, are supportive of and are applauding, Mr. Speaker. I look forward to hearing the opposition's comments on the legislation and in fact moving it onto committee so that we can hear presentations from Manitobans and hear what their concerns are and what their support might be for that legislation. Mr. Lamoureux: Mr.

Speaker, I would ask the minister, can she tell us who, besides the board membe rs who have been appointed by her, supports having the Manitoba Grants Advisory Council in the multicultural act? Who supports it? I do not know who the minister is speaking to. It should be- Mr. Speaker: Order, please. The honourable member has put his question. Mrs. Mitchelson: There are many from the community whom I have spoken to, who do agree, in fact. As I indicated earlier, I am looking forward to this bill passing on to committee so that in fact Manitobans can come and make presentations on the content of the act. Mr.

Lamoureux: Mr. Speaker, the minister would not give one name, and I think that i� Mr. Speaker: Order, please. Question, please. Manitoba Intercultural Council Mr. Kevin Lamoureux (Inkster): My question is to the minister. Given the treatment that she has dished out to the Manitoba Intercultural Council and given her commitment to the Manitoba Intercultural Council that the MIC would be included in a multicultural act that she gave me, Mr. Speaker, I ask the minister why has she excluded the Manitoba Intercultural Council from the multicultural act? Hon.

Bonnie Mitchelson (Minister responsible for Multicultur alism): Given that there does not seem to be any consensus within the community on changes to the Manitoba Intercultural Council, we have set up, Mr. Speaker, a consultant who is going to consult broadly. I do know that consultant is going to speak with members of the Liberal Party if they will speak to him. He is going to speak to members of the New Democratic Party and not only those present members, but indeed the former minister, Eugene Kostyra, who brought in The Manitoba Intercultural Council Act and the present member for St.

Johns, who was the Minister of Culture before my time. So he is going to meet with everyone within the community who has something to say and look at what, in fact, amendments should be made to The Manitoba Intercultural Council Act. If that report recommends thatthe Manitoba Intercultural Council should be included in a multiculturalism act or in the act, you know every year acts are amended in this Legislature, so that process can take place. North American Free Trade Agree ment Clarification Mr. Gary Doer (Leader of the Opposition): Mr.

Speaker, a few minutes ago the Minister of Industry, Trade and Tourism, (Mr. Stefanson), who obviously is in no communication with the Premier who attends the economic meetings of government, stated that Saskatchewan was not opposed to the free trade negotiations with Mexico. I want to table a statement at the Rrst Ministers' meeting quoting that: as far as the Mexico round, Saskatchewan urges that they be shelved. This is from Premier Romanow from Saskatchewan. I would like to ask the Premier to advise his Minister of Industry, Trade and Tourism what was said at the first meeting on the economy and not

June 15, 1992 LEGISLATIVE ASSEMBL Y OF MANITOBA 4604 misrepresent the Premier of Saskatchewan on this very important issue. Hon. Gary Fllmon (Premier): Mr. Speaker, we have here the classic case of the New Democratic Party who have ideological blinders on an issue such as trade. They are willing, no matter what they know about it-and in the case of the leader of the Opposition, he knows very little about it-to make a decision, sight unseen. They are opposed-totally, ideologically bUnkered.

They put their head in the sand like an ostrich, and they do absolutely nothing but oppose, oppose, oppose, regardless of any fact. That is not the kind of thing that we will support. Premier's Position Mr. Gary Doer (Leader of the OpposHion): Mr. Speaker, I would like to ask the Premier then: Was the position he took on the leaders' debate during the last election, in front of all Manitobans, to oppose the free trade negotiations with Mexico, based on the fact he had his head in the sand, he was not studying the issues, or are the six conditions now the basis of his study?

Why did he flip-flop on this important issue between the time before the election and now in terms of this negotiation? Hon. Gary Fllmon (Premier): Mr. Speaker, I thought the leader of the Opposition was too busy stage-managing himself, taking his jacket off, to pay attention to anything that was said during that leaders' debate. When his handlers and his stage managers got hold of him there, I did not think he had any time for any issues to be discussed. I am glad that he was paying attention. Of course, Mr. Speaker, the issue was that there was no free trade agreement to be discussed or considered at that time.

There was no agreement to be considered at that time. There is a proposal forward now, to which we have responded comprehensively with six conditions that we say, if those six conditions are met, then there could be benefit to Canada. That is the situation that we have put ourselves in, given the fact that there is a discussion taking place, that there is a draft being discussed.

We have put our six conditions on the table to say that If those six conditions are met, then we will consider that agreement because it would, under those conditions, hold benefit for Manitobans and Canadians. * (1 420) 811182 Environmental Guidelines Mr. John Plohman (Dauphin): Mr. Speaker, the Minister of Agriculture has introduced The Farm Practices Protection and Consequential Amendments Act, Bill 82. It is largely consistent with legislation in other provinces.

However, in February, when the minister released the discussion paper in preparation for the bill, he included four items that had to be addressed by the govemment. He said that there was a need to review livestock regulations under The Environment Act with a view to setting minimum environment standards-and I am quoting from the minister's paper of February. Also, he said that there was a need to assist municipalities in their land-use planning approaches to agricultural operations. Since the minister is asking us now, Mr.

Speaker, to pass Bill 82, dealing with farm practices protection, can he tell this House what progress he has made with regard to those other three issues that he considered important in February to be addressed hand in hand with this legislation before this House. Hon. Glen Findlay (Minister of AgrlcuHure) : I am pleased to report to the member that I have asked the Minister of Environment (Mr. Cummings) and the Minister of Rural Development (Mr. Derkach) to look at the planning and the environment acts with regard to being consistent with what we are going to pass in Bill 82.

We have also set up a committee to develop the guidelines that will be used in the process of making decisions under the bill. Mr. Plohman: Mr.

Speaker, since the minister in his own paper also said that there is considerable variability in the manner in which agriculture operations, especially livestock, are addressed by municipalities, why has he not ensured that that issue has been addressed prior to bringing the legislation in so that situations that have developed with Pur-A-Tone applying in one municipality and another are not treated differently from municipality to municipality because of an absence of any standards? Mr. Findlay: Mr.

Speaker, guidelines in many agriculture operations are now available-! would not say in place, but available-and they will be scrutinized to determine their acceptability for the process we are talking about here on Bill 82. We will ask the municipalities to look at them, to use

4605 LEGISLATIVE ASSEMBLY OF MANITOBA June 15, 1992 them in the decision-making process they are involved in. I can tell you many of the municipalities in the last year have come forward and asked that we participate with them in guideline development. That is going on. A committee has been struck involving my department, other departments and the municip alities to work toward getting those guidelines in place so they will work for everybody's betterment. Mr. Plohman: Mr. Speaker, the minister brought four major initiatives out in his paper in February. He is only addressing one of them in this legislation.

I ask the minister why he has not followed his own discussion paper with regard to the issue of including the issues of water quality and health under The Environment Act for livestock operations prior to bringing in the act which will now provide protection for large operations. Mr. Findlay: Mr. Speaker, as a result of both the first discussion paper that went out and the second discussion paper, a lot of issues surfaced, and all those issues are being addressed in a consultative process within gov ernment and outside of government.

We are fully aware of what needs to be done, and all the processes are in place and working toward the conclusion. Mr. Speaker: Time for Oral Questions has expired. Speak er's Ruling Mr. Speaker: Order, please. I have a ruling for the House. On June 9, 1992, the opposition House leader, the honourable member for Thompson (Mr. Ashton), rose on a matter of privilege and moved "That the question of security at the Legislative Building be referred to the Committee on Privileges and Elections. 8 After contributions from the House leader for the liberal Party, the honourable member for Inkster (Mr.

Lamoureux) and the honourable Minister of Government Services (Mr. Ducharme), I took the matter under advisement. The matter of privilege arose from the abduction of the honourable member for St. Norbert (Mr. Laurendeau) from the grounds of the Legislative Building in the early hours of June 9, but it relates to a broader question of security of persons in this building and on these grounds.

Privilege, as defined by Sir Erskine May, is "the sum of the peculiar rights enjoyed by each House collectively • . • and by Members of each House individually, without which they could not discharge their funct ions .8- Beauc hesne's Citation 24. Joseph Maingot puts it more simply by stating that "Parliamentary privilege is the necessary immunity that the law provides for members of Parliament, and for members of the legislatures of each of the ten provinces and two territories, in order for these legis lators to do their legislative work. 8- Pariiamentary Privilege in Canada, page 12 .

Maingot also deals with the matter of assaulting or threatening of members, and I quote: "Members are entitled to go about their parliamentary business undisturbed. The assaulting, menacing, or insulting of any member on the floor of the House or while (s)he is coming to or going from the House, or on account of his (or her) behaviour during a proceeding in Parliament, is a violation of the rights of Parliament. w That is found on page 19 6.

However, Maingot points out that to be considered a matter of privilege, any molestation or intimidation of the member must relate to his parliamentary duties unless the circumstances arise within the precincts when the House is sitting. To qualify as privilege, it must be shown that the member was obstructed or interfered with in his work relating to a proceeding in Parliament and not simply performing his representative duties in his constituency or other areas. No connection has been established between the events of Monday ni ght and the member' s behaviour during a proceeding in Parliament.

Therefore, I am ruling that the matter raised by the opposition House leader does not satisfy the conditions of privilege. The issue is, however, a most serious one, and the House may wish to debate the motion to refer the question of security to the Standing Committee on Privileges and Elections. I leave that to the will of the House. Mr. Steve Ashton (OpposHion House Leader): Mr.

Speaker, having raised the matter of privilege and appreciating your ruling, I would certainly say on behalf of our caucus that we feel referring the matter to committee would probably be the best way of dealing with the various concerns that arose out of this incident. I appreciate the comments in your ruling in that regard, and I would suggest that perhaps we do that and agree to referring it to the Committee on Privileges and Elections and discuss it further there.

June 15 , 19 92 LEGISLATIVE ASSEMBL Y OF MANITOBA 4606 Mr. Kevin Lamoureux (Second Opposition House Leader): Mr. Speaker, we do not have any problem. We think that the recommendation that has been put forward from the official opposition House leader is a good one and would support it going to the committee for further discussion. Hon. Cl ayton Manness (Government House Leader): Mr. Speaker, the question of security is always an important issue and one that should probably be dealt with on an ongoing basis.

Consequently, we have no difficulty in seeing the motion referred to the Committee on Privileges and Elections. Well, the motion, of course, is ruled out of order, but I will undertake when that committee is sitting, to include it as one of the agenda items. Mr. Speaker: I would like to thank all honourable members for their advice, and that does conclude this matter. Committee Changes Mr. Edward Helwer (Gimll): I move, seconded by the member for St. Vital (Mrs. Render), that the composition of the Standing Com mit tee on Privileges and Elections be amended as follows: the member for lac du Bonnet (Mr.

Praznik) for the member for Seine River (Mrs. Dacquay); the member for Morris (Mr. Manness) for the member for River East (Mrs. Mitchelson); the member for Brandon West (Mr. McCrae) for the member for Rossmere (Mr. Neufeld); the member for Pembina (Mr. Orchard) for the member for La Verendrye (Mr. Sveinson). [Agreed) • (1 430) House Business Mr. Manness: Mr. Speaker, before I move the Supply motion, I wonder whether or not there is a will to waive private members' hour. Mr. Speaker: Is it the will of the House to waive private members' hour? Some Honourable Members: No. Mr. Speaker: No, leave is denied. Mr.

Man ness: Furthermore, Mr. Speaker, I wonder whether or not there is a willingness to reconvene tonight, instead of at eight o'clock, at 7 p.m. this evening. Mr. Speaker: Is it the will of the House to reconvene at seven rather than at eight? Some Honourable Members: No. Mr. Speaker: No, there is no consent there at all. Mr. Manness: Mr. Speaker, I would like to seek permission then to waive Rule 65.(9)(c), which presently does not provide for starting a new department after 10 p.m. I wonder whether or not there is unanimous consent to waive that rule. Mr. Speaker: Is there a will to waive Rule 65.(9)(c)?

Some Honourable Members: No. Mr. Speaker: No, there is no leave for that either. Mr. Manness: Mr. Speaker,! will try one more time. I will ask whether there is unanimous consent to waive Rule 65.(9)(d), which allows the consideration of another department after 10 p.m. Mr. Speaker: Is there will of the House to waive Rule 65.(9)(d)? Do you want me to read it out? Some Honourable Members: No. Mr. Speaker: No, there is no leave for that one either. Mr. Manness: Well, zero for four, Mr. Speaker. Mr. Speaker: Yes, you are not doing very well. ORDERS OF THE DAY Hon. Clayton Manness (Government House Leader): Mr.

Speaker, I move, seconded by the Minister of Justice (Mr. McCrae), that Mr. Speaker do now leave the Chair and the House resolve itself into a committee to consider of the Supply to be granted to Her Majesty. Motion presented • *** Mr. Paul Edwards (St. James): Mr. Speaker, ! rise to continue the grievance I started on Thursday of last week. Mr. Speaker: Order, please.

Pursuant to Rule 26.1 (3): "Any debate pursuant to this Rule is terminated when the House adjourns on the day of the debate and shall not be continued or resumed at the next or any subsequent sitting of the House." *** Motion agreed to, and the House resolved itself into a committee to consider of the Supply to be granted to Her Majesty with the honourable member for St. Norbert (Mr. laurendeau) in the Chair for the Department of Consumer and Corporate Affairs, and the Department of Culture, Heritage and Citizenship; and the honourable member for Seine

4607 LEGISLATIVE ASSEMBLY OF MANITOBA June 15 , 1992 River (Mrs. Dacquay) in the Chair for the Department of Highways and Transportation, and the Department of Energy and Mines. Mr. Speaker: Madam Deputy Speaker, take the Chair, please. *

(1440) COMMmEE OF SUPPLY (Concurrent SecUons) CONSUMER AND CORPORATE AFFAIRS Mr. Deputy Chairperson (Marcel Laurencleau): Order, please. Will the Committee of Supply please come to order. This afternoon, this

section of the Committee of Supply, meeting in Room 255, will resume consideration of the Estimates of the Department of Consumer and Corporate Affairs. When the committee last sat, it had been considering item 2.(

a) Consumers' Bureau: (1 ) Salaries $914,1 00 on page 25. Mr. Guizar Cheema (The Maples) : Mr. Deputy Chairperson, I do have a few questions on this branch. As the minister knows full well, we have raised one issue with her, about the 4 Carriere Avenue resident place where-1 will give some facts to her. Probably some of them she already knows. Between 19 83 and 19 86 there was an illegal increase on the rent introduced by the landlord at that time, and these increases took place by means of a new increase every time a new tenant would move in, and no applications for excess increases were made.

Can the minister tell, is that a fact? Hon. Linda Mcintosh (Minister of Consumer and Corporate Affairs) : I wonder, Mr. Dep uty Chairperson, if the member could just repeat that last line, because you asked me to verify something as correct and your voice got lost in the noise here. Mr. Cheema: Okay, Mr. Deputy Chairperson, I will try again.

What I am asking simply is the situation as regards rents at the 4 Carriere Avenue place where, during 1983 and 1986, rent increases were introduced and later on, as the place was sold, these increases took place by means of new increases, and every time a new resident would move they still have to pay on the basic rent which was already more than it was required. Basically, if you move into a place you have to pay an increase, but there is no regulation that if somebody is moving next time he has to pay on the same basic rent as it was at the initial stage.

So, for example, if you have a resident place, you can have four new tenants in one year, and every time you increase the rent by 3 percent or 4 percent, you end up going up 16 percent. That was the situation at this place. Can the minister tell us, is she aware of the situation? Mrs. Mcintosh: Mr. Deputy Chairperson, this is a complex issue the member has raised before and that we have discussed. It is an issue in which we have been guided by legal opinion. As the member knows, the whole issue revolves around the

interpretation of

Section 34 of The Residential Rent Regulation Act. My department's legal advice is that we cannot take action on the event which took place more than two years prior to the property change in ownership. In other words, in this particular instance no application was made for rent increase. The rent was increased without approval for those increases, and the landlords subsequently changed.

The new landlord did comply and obtain information he was required to according to law, and part of that information was to establish whether any improper rent increases had taken place in the two years prior to that new landlord taking ownership. He did obtain that information and no improper rent increases had been taken in those two years prior nor were any monies outstanding. The landlord had no way of knowing that the increases that had taken place years prior to that and that no approval had been sought for them.

That is not to say that those increases would not have been given approval if they were proper, it is just that approval was not requested. That two-year period, it is deemed to be a reasonable amount of time in which to trace back, because in the majority of cases tenants will come forward, indeed, usually much sooner than within two years to indicate concern about rent increases if they have them. The landlord must make available a listing of the rent charged for the two years prior to taking purchase, and the amount of money due and unpaid under any order from this branch.

You have to read Sections 34(1 ) and 34(2) together. So we are advised by our legal counsel that we cannot take action in this instance .. * (1 450) Mr. Cheema: Mr. Deputy Chairperson, I am really surprised. I do have the copy of the legal opinion,

June 15 , 1992 LEGISLATIVE ASSEMBLY OF MANITOBA 4608 and it clearly indicates that the responsibility is on the new landlord for the previous two years. Now, is it not unfair in terms of if you buy a place and you have 40 tenants in your place, charge them 4 percent more under the regulation and then sell to somebody else and that person will come and do the same thing, or even if he or she is not selling they could still have new tenants and still charge on the basic rent? When you have known this for two years at least, why have you not made a point of correcting the problem?

Why do we co ntinue to follow the same thing that happened in 1984? Mrs. Mcintosh: The member raises an interesting point, Mr. Deputy Chairperson, and you know the question essentially that he is asking is, how far back does one go in tracing issues in past history before ownership changes take place? This instance that he is describing is one that does not occur very often, and the fact that it does not occur very often leads me to believe that maybe the two years is an appropriate date. Now that could be extended to three years or four years or 1 0 years.

Certainly, I am prepared to listen to arguments that might have us change the act to have it be more than two years, but the issue that takes place here is the new landlord, coming in to pu rchase the property, is compelled to look back two years and does that. Now in looking back two years and presenting information to the branch that shows the previous two years, the renewal, unapproved rent hikes, et cetera, that new landlord, making a purchase of that property, then expects that he will generate a certain amount of revenue for himself as a result of acquiring that piece of property.

The memb er is talking about fairness. I appreciate the point he is making, because it is a point that is one we all want to see addressed, that people are treated fairly. That would include the landlord, who, in assuming the property rightly, according to his perspective, I think having followed all the rules, assumes that he will generate a certain amount of income from that particular property.

To then penalize him to say, well, during the two years that the rents were put up, and we understand in this instance how the rents did go up, and that was as each former tenant moved out, the previous landlord had gone in and extensively renovated the suites and then made the adjustment in the rent to cover that particular suite, but never asked for approval on that. So there is no way of the branch being able to prove whether the renovations were made or not made, justifying a rent increase, because approval was not sought. (Mr.

Bob Rose, Acting Deputy Chairperson, in the Chair) So the new landlord should not be penalized for actions taken years prior to him assuming the property. Now, if the length of time to search back is too short, which I think may be the issue the member is trying to address, that two years is not a long enough period to go back and search, then maybe that two years could or should be changed. I am not adverse to looking at that. What I am saying in this instance is that the period identified is two years and the law that is in place to cover this situation prohibits us from taking action. Mr. Cheema: Mr.

Acting Deputy Chairperson, can the minister tell us how it is possible that the minister has said it is occurring very rarely? How do we know that this is the only place with problems like this occurring? It could happen in many places. It could happen for many homeowners, who could rent the property three times or four times in one year, and there is a changeover of the tenant, it can happen. The question is fairness. I think if we do not address the basic issue here, I do not think we are going to be satisfied.

I told you that day-that was last week- that I am not an expert in this area, but something I have read and I have a major concern with, we want to have a problem solved. It is not just going to disappear and say, well, we have a legal opinion. The legal opinion is by one individual group. Why cannot we have some decision process where the legal opinion can be taken to a tribunal or the board members where it can be given the opposite argument? I mean if you want to have a legal opinion about something you want to happen, the way you would like to think, it is very possible.

Simply I am saying that is unfair, specifically when people have been there, and they have paid rent more than they have to and they have no place else to go. They have gone to you, they have come to us and they have gone to the lawyers, but their problem is not solved. Mrs. Mcintosh: Mr. Acting Deputy Chairperson, I just first of all wish to clarify that I did not say that we have had no other concerns of this nature. I said that fortunately this is not a concern that we hear very often. I have checked with staff and indeed we have not heard any other complaints of this nature,

4609 LEGISLATIVE ASSEMBL Y OF MANITOBA June 15 , 1992 so that does not mean there are not complaints out there that exist. They have not been brought to our attention if they do •. We do not shop for legal opinions. We have legal counsel assigned to the department who provides us with legal opinions. What we find a little unusual in this case-a nd indeed quite unusual in this case-is that this issue was not brought to our attention by virtue of a complaint from a tenant at the time or indeed during the two years, or indeed immediately thereafter. It came up many years later and was brought to our attention.

Now, I do not know how far back the member wishes us to go. I reiterate again that the legal opinion we have received indicates that we can only go back two years prior to the date of the new landlord acquiring the property. It is felt that during that two-year period most tenants having a concern would indeed come forward. Indeed, most tenants with a concern about rent increases come forward very, very quickly.

So this not only did not take place during the two years, it did not take place for sometime after until recently when a particular individual known to the Liberal critic did indeed come forward with this concern. Mr. Kevin Lamoureux (Inkster) : Mr. Acting Deputy Chairperson, I am trying to get a better idea in terms of how big of an issue this is. I know the member for The Maples (Mr.

Cheema) has brought forward a particular case, and the minister makes reference to the fact that she is not aware of anything that has come other than this particular case, but she has been the minister responsible, I guess, for the act now for less than a year. I am wondering if there is not only this information but additional information that the Department of Housing, like, how that transpired. When the minister says that her department is not aware of it, is she just referring to since she has had the portfolio?

Is she referring to it as a concern that no doubt would have been out there when it was with the Department of Housing? * (1 500) Mrs. Mcintosh: Mr. Acting Deputy Chairperson, I am advised by staff that, no, there have been no complai nts on this issue until recently. That complaint came on this one particular issue that was raised to the member for The Maples (Mr. Cheema) by the particular individual who brought the matter forward. Mr.

Lamoureux: I think that it would be somewhat rare for an individual who is moving into a rented facility to have an excellent background knowledge as to when it would have received rent increases and so forth in the past. It gets additionally complicated when you have landlords who have sold the building or there has been a change in landlords. Does the government have any idea other than just this one particular case is, if this occurs, but we do not have the tenants coming forward to express that particular problem. Does the government have any idea in terms of, is this at all a problem?

Does she foresee it to be any sort of a problem, a loophole or something of that nature within the rent increase guidelines? Mrs . Mcintosh: Mr. Acting Deputy Chairperson, I am advised by staff that in the approximately 1 0 years that The Residential Rent Regulation Act has been in place, this is the only situation of this nature that has been brought to the department's attention, and it is not perceived to be a problem in a general sense. Mr. Lamoureux: So that I can get the record fairly clear for myself, the minister or the government then is of the opinion that-who is responsible?

Who should be footing the bill? Is it the current landlord? Is that what the legal opinion is saying? Would the minister concur that it should not be the tenants, that it should be the original landlord? Mrs. Mcinto sh : Yes, Mr. Acting Deputy Chairperson, our advice, our legal counsel's opinion on this issue is that we cannot go back beyond two years. Let me explain again.

The purchaser, the new landlord, the one who is considering acquiring a particular piece of property has an obligation to provide the branch with information going back at least two years as to any monies that might be outstanding, any bills that might be unpaid, and any rent increases that have taken place that may not be legal rent increases, i.e., not approved or something of that nature, a listing of the rents charged. A better way to put it would be, he puts in a listing of the rent charged for the two years prior to taking the purchase.

So he would indicate that the rent in such and such a year was X, the rent the next year was X plus so-much percent. That percentage would either have to comply with the rent regulation guidelines or have been one that was approved by the branch. The landlord in this instance complied with the law, submitted those. There had been no rent

June 15 , 1992 LEGISLATIVE ASSEMBL Y OF MANITOBA 4610 increases taken in the previous two years that did not comply with law. There were no monies outstanding for those two years. Hence, the landlord assumed the property in good faith with the assumption that the rents that were being charged were rents that he, in tum, could also charge. The tenants had that two-year period in which to come forward to indicate if they felt there were any irregularities in their rent increases or in the rent that they were paying for the rental units that they had just moved into.

All tenants moved in accepting the rents that were there without question. We are advised that, according to the way the act is, we cannot go back past that.

Now, if the member is suggesting that the tenants who did not come forward in those two years or who, upon moving into the apartment did not question the rent they were paying, should now get their rent rolled back because the new landlord may, in fact, be receiving rents from an increase that was given many years prior to his assuming the building, that was never approved, that he did not know of, then what the member is suggesting is that the act should read back maybe 1 0 years or 12 years, or 50 years or five years or six years, some other year more than two years.

What I am saying to you is that may be something that should be done, but the current act says two years, and we must obey and abide by legal counsel and the wording of the act. Mr. Larnoureux: Mr. Acting Deputy Chairperson, I apprecia te the min ister giving a well-detailed answer on that.

It calls into question, in terms of what the minister then really is saying, as the tenants, because they moved in and did not know that there were increases that exceeded the guidelines, if you will, in previous years, that they really do not have any recourse according to this minister, nor should they really expect it because the legislation does not allow for it. I am wondering in terms of what is there or is there anything in the legislation that prevents something of this nature from happening in the future?

I started off by saying that there are tenants, when they go moving into an apartment block, do not necessarily go and find out every instance when there was a rent increase. It is quite the onus to have to put on a tenant, and we are not suggesting that it should not be on the tenant, but I would suggest to you that the government's response that the tenants are really the ones who unfortunately will have to cover the cost of this particular instance.

What I am saying is that really what the government is trying to say is that the tenants in this particular case are the ones. who are going to have to pay for that unjustness. Mrs. Mcintosh: Mr. Acting Deputy Chairperson, what I am saying to the member, and I will say it again, is that I am abiding by the

interpretation of the law as written in the Province of Manitoba, which I think as minister I have an obligation to do. Mr. Lamoureux: Yes, the minister is obligated to do that, but as a minister she is somewhat obligated to look after the interests of both landlords and tenants, and where there could possibly be some positive change that the minister not rule it out, even though the department itseH might not necessarily feel that it is a large enough issue that has to be addressed.

As I alluded to, the tenants are really the ones who are losing out most by this, because unfortunately they did not do their homework, I guess. In respect to landlords, what is in place or what action can the government take if the government finds out that a particular block or a particular rental unit three years ago had a 6 percent rent increase? It can be just as small as an independent home, a single family dwelling that is being rented out, whether it is was 6 percent increase three years ago, is there anything that the government can do about it if they were to find out about it today? * (1 510) Mrs.

Mcintosh: Mr. Acting Deputy Chairperson, where no purchase is involved, then the department can go back as many years as they want. The only time the two-year search is required and the only time the two-year time limit is imposed is if there is a change of ownership. Without a change of ownership, the branch can go back and search three, four, five, six years and have the rents corrected for the tenants. It is only where there is a change of ownership that it was deemed wise some many years ago to pick a time in which the pu rchaser would have to go back and trace.

Otherwise you make the purchaser responsible back to infinity or to the beginning of the time that the building existed for what landlords and previous landlords and previous landlords and previous landlords did, and you know, as the member for Inkster (Mr. Lamoureux) said, they wished to be fair to both landlords and tenants. That

461 1 LEGISLATIVE ASSEMBLY OF MANITOBA June 15 , 1992 is what I hope the act does is be fair to both sides of the marketp lace , not ju st one side of the marketplace. Mr. Cheema: Mr. Acting Deputy Chairperson, can the minister maybe refer back to her own law in terms of

Section 34(2), "Obligations of new landlord"? It clearly states that: "Where the right, title or interest of a landlord in residential premises is acquired by a new landlord, all duties and obligations arising out of the payment of excess rents paid by tenants of the residential premises become the responsibility of the new landlord ••. ." I do not want to read the whole thing here, but I mean, if you accept that, then why for the last two years have you not gone back and rolled back those rents which were Illegally increased? Mrs. Mcintosh: Mr.

Acting Deputy Chairperson, as indicated, Sections 34(1) and 34(2) must be read together, as you know many laws are. They all have clauses that taken in isolation they have to be read in conjunction with other clauses. I think if you read (1 ) and (2) together, you will see that

interpretation that has been given to us by legal counsel. As I indicated before, this is a problem that in the history of The Rent Regulation Act has been brought to our attention once by your friend, by the person you know, not that long ago, and is brought to our attention many years after the fact. I say to the member, how far back do you want us to go? When there is no purchase involved, we go as far back as we need to, to ensure that an existing landlord has not put in a rent increase that has not been approved.

We do not know in this instance if the rent increases, had they been applied for, would have been approved or not. They are illegal in the sense that they never got approval. We do not know that they were illegal in the sense that the work that was alleged to have been done got done or not done because it was never applied. No one was asked to come out and check to see if the renovations had taken place. They were not approved, which means they were not approved increases and they are supposed to be. Mr. Cheema: Mr.

Acting Deputy Chairperson, can the minister then tell us, as she has just said, that you know the department is not aware of whether that was really illegal rent, so you are basically disputing all the residents who live there and who have basically asked and made a plea thattheir rent was increased on the basis of, and information they are providing? I would trust them; I am not going to trust somebody else.

I will trust the people who have paid the rent for the last so many years, and whether somebody else took their money and ran away and then you have a new landlord, but still those are the individuals and I do not wish to question their integrity because basically I just want the minister to clarify that. It could be taken that those people are not telling the truth. Mrs. Mcintosh: Mr.

Acting Deputy Chairperson, I am saying that in terms of the rent increases not being proper rent increases, I am not saying that the increases are illegal rent increases, using that word, because it has been proven that renovations were never done. I am saying that they were considered to be unauthorized rent increases because approval was not sought for renovations which may or may not have been done. We do not know, because approval was never sought for those rent increases, nor did tenants come forward to speak to us about them at the time, so we do not know. We just know that no approval was ever sought. Mr.

Cheema: Can the minister tell me then, even if we say that your legal opinion is 100 percent right, what have you done for the last two years in terms of dealing with this situation? Mrs. Mcintosh: The rent increases for the last two years have been legally approved. Mr. Cheema: The rent has been approved on the illegal entries in the past, so why have not you taken steps in terms of at least correcting the problem? You recognize the problem is there and legal counsel recognizes the problem is there, why not correct the situation? Why do we have to wait for somebody else to make the same mistake? Mrs.

Mcintosh: Mr. Acting Deputy Chairperson, let me repeat again, maybe I am not expressing myself clearly. We cannot take any action in this instance according to the legal advice we have been given because there has been a change in ownership. Some years ago, the landlord who purchased the building went back in time according to law, those two years that he was obliged to do, to check out increases, to check out if any money is owing. There had been no unapproved increases in that two-year period.

There had been no monies left outstanding when he assumed ownership of the building; therefore, he pu rchased the building assuming that he had the right to continue charging the rent that was being charged.

June 15 , 19 92 LEGISLATIVE ASSEM BLY OF MANITOBA 4612 Mr. Cheema: As I told you from the beginning, I am no t explor ing, I am simply seeking some clarification. I am making sure that if, as we see-and I should not say "it,• the problem is there, and there has to be some method of correcting the problem. This is only one situation, where the one large block was under this kind of manipulation, but there could be others in terms of single homeowners or single dwellings where similar things could be done. It is very easy to do. We do not expect consumers to be well informed when they do not know what is happening.

For example, if I own a house and I want to rent it, every three months I could sign a lease and get a new tenant, so every time my basic rent can go up. I mean, how can we say that this problem does not exist in Manitoba? It could very well be there. So I just wanted to make sure that something is being done at least to notify those individuals and try to make a regulation that people would know that. I mean just painting one wall of a house, he is not going to have the basic qualification of renovating the whole building or renovating the whole structure. I mean these are very minor things.

Spending $40 on one wall and making $200 in about a year is a lot of difference. So basically these things can happen. I mean somebody can put a lock on the door and say, I have corrected some of the problems so I am going to increase your basic rent, because the quality of the premises has increased. So those are the very right issues.

I just wanted the minister to look into that and make sure that we can bring something to correct the problem, if not this session-we are already late-but it should be done in the next session and the mi ni ster should make a commitment. * (1 520) I mean we are not criticizing her, she just came a year ago. The previous mini ster of the NDP government was almost sleeping on the issue. In '84 and '87, they were basically sleeping on the whole issue, but you have known this for two years. You have a legal opinion. We have asked you questions. The consumers, who are in this process, they have asked you questions.

So basically why not fix it if there is a problem, and there seems to be a problem? You are in agreement, your department knows there is a problem. We know there is a problem, so they must be answered, and we are asking the answer from your experts. Mrs. Mcintosh: Mr. Acting Deputy Chairperson, if you did those things that you indicated in the opening of your remarks that you could do and get away with, let me assure you that if you were discovered you would not get away with them.

Because if there had been no change of ownership and you were hiking rents and were not getting approval, we would not have to stop at a two-year prior search. We could go back three, four, five, six years, as long as you have owned that building, and we would. I must reiterate that rent regulation has been in place since 1982, '83, somewhere in there, about a decade, 1 0 years. This issue is the only one of this nature that has been brought to our attention in that 1 0 years.

I do not think the original drafters of the legislation did such a bad job on this particular issue if this is the only concem that has come forward in all that time of this nature. Mr. Cheema: Mr. Acting Deputy Chairperson, I do not want to irritate the minister and upset her, but certainly I think the issue is important, and as long as we can try to get more clarification and explanation and make sure this can be corrected, and that is the whole intent here.

Can the minis ter tell me what is the other mechanism in terms of, if we accept this legal opinion as I said, and then we cannot trace the previous landlord and we cannot punish the present landlord because he is protected by that. The present landlord is protected, because within

Section 32(4) the landlord is protected, so what is the final appeal mechanism? Does the minister have the authority to make some decisions and make sure something unjustifiable was corrected? Mrs. Mcintosh: Mr. Acting Deputy Chairperson, the option that would be available, should the member feel the two-year period is inadequate, would be to put an amendment to the act to put it back to four years or five years, but then you would find, I think, the same situation.

Sooner or later, an issue would come along where someone would say, ah, you only go back 10 years and this issue that I am affected with happened 11 years ago, so you better change it to go back to 11 years, and you better make sure that it is the owner before the owner before the owner. At some point in a situation where ownership change has taken place there has to be a cut-off point beyond which the new owner is no longer liable for the sins of those who went prior to him.

4613 LEGISLATIVE ASSEMBL Y OF MANITOBA June 15 , 1992 Mr. Cheema: Mr. Acting Deputy Chairperson, I do agree with the minister, there has to be some limit, but basically what we are asking is for her to seek some more clarification and legal opinion and come up with an amendment. Try to make sure these problems can be corrected, and something can be done to teach consumers so that they are well informed.

It is very tough for somebody to within two minutes be an expert in Consumer and Corporate Affairs and know all the rules and regulations and read the whole act, but I think they should be at least well informed and their rights should be protected. Basically what we are saying is that the individual's rights must be protected here, if somebody who owns the pr operty and should not be taking advantage of situations. Situations, as I explained, can be very good, if they are practical problems.

I just want the minister to take note of those, our comments, they are not coming from basically political experience, they are basically coming from the concerns, and I am sure when more individuals know about these cases, who knows, it could be more than what we know. So I will ask the minister to look into this situation, and next session, please bring the amendments. (Mr. Deputy Chairperson in the Chair) Mr. Deputy Chairpe rson: Item 2. Consumer Affairs (

a) Consumers' Bur eau : (1 ) Salaries $91 4,1 00. Mr. Reg Alco ck (Osborne): Mr. Deput y Chairperson, I would just like to take advantage of this opportunity for committee to ask the minister about an issue that was before the committee and before the department during the passage of the bill and has been raised with me since, and that is this question of how capital is included in the calculation of rental increases?

Specifically, there are provisions within the re gula tion s that allo w for the assignin g of depreciation allowances that they will flow through the capital increase, allowing a rental increase above the guideline in order to take into account the renovations and repairs and the acquisition of new equipment and such for a facility. There is a set repayment period allowed for that? The question has always come up, with certain items of capital that are in need of replacement, why, when the piece of equipment lasts longer than the write-off period, do the rents not go down again?

Why is that amount incorporated in the base rent then and then we build on that in subsequent years? Mrs. Mcintosh: Yes, Mr. Deputy Chairperson, I am advised that when the rent regulations that go with the capital expenditures, the depreciation, were set up, the landlords do not have the interest on that. They have to put the money all up front. They will have to purchase a $1 ,000 item for a $1 ,000 and pay for it, and then do not have that interest as the time period goes on throughout the depreciation.

It was felt that the three-, four-and six-time-year periods would balance off and leave the landlord In a net fair position at the end of the time of the depreciated period. Then the rent would not go down at that time in an effort to balance off and create fairness. Mr. Alcock: Mr. Deputy Chairperson, so if I und erstand the situation then, the issue is recognized in that there is no reduction in base rent as a result of these increases, which are allowed in response to specific actions on the part of a landlord, but it is felt that the interest is high enough to justify maintaining that base rate.

As I recall, I think, for a capital purchase such as a refrigerator or a stove, it is a five-year write-down? Mrs. Mcintosh: At the moment, the regulation says six years for that particular capital expenditure. Mr. Alcock: Refrigerators, in a number of the cases that we looked at, when they were being replaced, were having an average life of some 20 years, and a six-year depreciation is about 18 percent a year. Is that not a rather usurious rate to allow a landlord in perpetuity? " • (1 530) Mrs.

Mcintosh: I sure wish my fridge did last 20 years. 1 just want to indicate to the member-4t is questionable that all fridges last 20 years, is the point, I guess, because I certainly just had one that did not last anywhere near thatlong, butthe member has to realize the way rent regulations work and what the purpose of rent regulations is. Rent regulations were put in to control the marketplace, and in controlling the marketplace and regulating the marketplace, you have rents going along on a certain line.

There are regulations attached to those controls where you will have little hills and little valleys going along that line all the time. The idea is to ensure that those hills are never too high or those valleys too low, so regulations will be drafted.

June 15 , 1992 LEGISLATIVE ASSEMBL Y OF MANITOBA 4614 This is one regulation that is drafted to try to take into account how to balance off some valleys with some hills so that you still have incentive there for people to go into the rental property business, to provide housing, to provide rental accommodations to people in the marketplace and to maintain and keep up those particular premises.

If you want to put in regulations that are so restrictive that landlords will have no incentives to go out and purchase new refrigerators or replace drapes or fix up frayed carpeting, then we can go along the route that I think you are implying, but I would suggest to you that if you do that, there is no incentive in there for landlords to try and upgrade their premises or even, in some instances, to maintain them in a manner that tenants require or deserve.

So you will find regulations that in some instances appear to give a slight advantage, after a certain period of time, to a tenant or conversely, the other way, to a landlord in order to provide incentives, in order to provide a comfort to proceed in certain directions in co-operation with each other, but overall, the rent regulation control guidelines are to have this line through which a wavy line goes that has no sharp peaks and no deep valleys. Mr.

Alcock : I certainly agree with the minister both on the life of refrigerators and the need-no system is perfect, and there will be variations in any system that you bring in.

However, when this was looked at in some detail, as it was just prior to the passage of the last bill, what was noticed was that in older bu11dings with consistent management over a period of time, the gross profit of the owner was not going up and down in this wavy line manner but was consistently moving upwards as the owner took advantage of this rather generous capital cost allowance to continue to build the base rate well in excess of the guidelines. There had been a suggestion made by one of the members of the branch that there was a target for gross profit.

In this particular case, it had been exceeded, and that difference was growing, not exceeded for a period of time, not below for a period of time, but in fact moving in one very lock step direction. I guess I would ask the minister-while I do not dispute the need for balance at all. I think we have had one of the better rent regulation processes in North America, certainly when you look at what is happening in rent controls in other parts of the continent in particular and seeing the rather disastrous impact it has had on the creation of new properties and on bringing in line new prope rties.

However, there is this one anomaly that was not addressed in the act, in part because the problem lay in regulation. I am not certain whether that problem has been solved yet, and I am not certain whether the minister's remarks address a solution to this particular problem. Mrs. Mcintosh: Yes, Mr. Deputy Chairperson, the member is implying that there is a problem and that it requires a solution. Maybe there is where our differences lie. I may not agree that there is a problem that requires a solution, so we are probably coming at this from very different approaches.

The member had said, as he started his comments, that he had looked at gross profits during the evolution of the new act and indicated that some people-he did not name them-but he is obviously seeing books that I am not seeing. I do not have privy to looking at books as to who is making gross profits or undue profits or, you know, taking advantage of people to line pockets. I have not seen those figures. I guess the other point that should be made is that we do not, in setting guidelines and rules and regulations for the marketplace, set a cap on profits.

We do not say, for example, to the side of the marketplace that is the landlord's side, you are only allowed to make X number of dollars profit a year or X percentage of profits a year. In fact, that is not a qu estion . We look at what is fair for the marketplace. What is a fair rent guideline, for example, this year for tenants to be expected to pay? Last year when we looked at that, it was determined in the final analysis that 3 percent was a guideline that was a fair rent increase for tenants to pay.

Now, we did not go to landlords and say, will 3 percent give you a big profit or a small profit or an in-between profit? We determined that was a fair rent increase for tenants to pay according to the guideline. So I am not quite sure what the member is talking about when he talks about the gross profrts. I can only say that I do not know what kind of profits any particular landlords are making, and I cannot respond to his indication of knowledge in that area. Mr. Alcock : Mr. Deputy Chairperson, I thank the mi nister for that remark. If I understood her

461 5 LEGISLATIVE ASSEMBL Y OF MANITOBA June 15 , 1992 correctly then, when one is looking at the operation of a block and the costs of operation and all of the costs associated with the operation of a series of rental units as one does when one makes a determi nation on what size of increase will be allow� mean, those figures come out of the documents that are submitted to the department when they make those kinds of determinations, so they are there.

It was believed at one time, now I am not the final word on this obviously, that there was an allowance-if the gross profit, that is the profit before mortgage payments and the like were paid but after operating costs were taken out, was in the order of 49 percent of the total, that this was considered to be acceptable and that in successive years we have seen that level exceeded. I mean, the reason I raise this at all is that the minister made this comment about this wavy line, you are up, you are down, you are up, you are down and you eventually end up somewhere.

In the experience that we have had in the blocks that we have looked at over here it has been steadily upwards. The profitability of those units has been increasing, and despite that, and this is really the question, despite the factthat the buildings are more profitable today than they were even two or three years ago, they are still being allowed rental increases in excess of the guideline. Mrs.

Mcintosh: Yes, I would like first of all to ask the member what the rate of profitability is or should be, but I also would like to indicate that if profits are so high, why are we not seeing increased sales of buildings? Why are we seeing such a high-there is a high vacancy rate in the buildings. Buildings are not tuming over. Landlords who are attempting to sell their buildings, and there are many, are finding very great difficulty finding customers for those buildings.

I think that, you know, maybe with interest rates coming down on buildings it might help a little bit to spur the whole housing market, not just rental units, but private units as well. Certainly that has not been a trend we have seen in the last year or two. * (1 540) Mr. Alco ck: Well, I am sorry that we have taken the discussion in that particular direction. If we want to debate economic performance in this province, we can for some period of time. I was simply asking the question about how the department went about determ ining when a rental increase was appropriate?

If the minister does not have an answer for that question, she can say so. Mrs. Mcintosh: Yes, I would be pleased to address that. I just wanted to get the ad-lib

preamble address, because I think sometimes the

preambles are-you know, if you are wanting to drag Estimates out, that is a good way to do it is to put in those kinds of

preambles. Not that I am suggesting that you are wanting to drag Estimates out at all, but I would be pleased to come back if you would give me just a minute with an answer on that, because I see a signal. pnte�ection] Yes, I overheard that one comment just now, and I was delighted to hear it. It was just so opposite to what I heard the other night that I am very pleased you have changed your mind on that. The member is probably aware, having done the research that he has done on this issue, that the rent guidelines arise out of a formula. The formula does include things like operating costs, capital costs.

There is an economic adjustment factor in that formula, which is the only part of the formula that allows for a small bit of flexibility. That small bit of flexibility is very small indeed. At that point then, people could look at efficiencies and that type of thing. Definitely operating costs, capital costs and so on are in a formula that is set aside and put into use each year as the rent guidelines are decided. Those landlords and/or tenants who do not like the guidelines can appeal and do appeal.

We find on average that about 5 to 1 0 percent of the landlords and 5 to 1 0 of the tenants will appeal a particular guideline. I think the guidelin es are very well pegged, because in most cases, for example, landlords appealing, it Is a very small percentage who do appeal. Only 5 to 1 0 percent appeal, which is a very small percentage. Those have a high rate of winning those appeals, because they do not tend to come forward unless they know they have a solid case they can win.

They will usu ally come forward with very legitimate grounds to say, well, you said I can only charge a 3 percent guideline but here is something that happened in my building last year that required me to have to expend more than you have indicated in your formula. The department will say, we will look at that and determine whether or not that is a legitimate factor to be taken into consideration and

June 15 , 1992 LEGISL ATIVE ASSEMBLY OF MANITOBA 461 6 may or may not grant an appeal for an increased guideline. Ht he tenants do not like that increased guideline, if the department says, well, you do have a case to be made, you should be allowed to charge more than the 3 percent because of this peculiar circumstance of yours, if the tenants object to that, they in tum then have the right to come forward and say no, no, no, you know, the landlord said this. However, we want to point out this other fact or, which may then have the department saying, well, then 3 percent is all you are going to get. Mr.

Alcock: I think, at least in the ones that I have been involved in, the process is initiated by the landlords to the extent that they make it a decision to apply for a rental increase above the guideline. That 5 to 1 0 percent of landlords and tenants tend to be more tightly locked. I do not recall a single case that I have had where a tenant has appealed an at- or below-guid eline rent increase. Can the minister tell us whether there have been any? Mrs. Mcintosh: I am just checking to see .

Yes, I am pleased to advise the member that, yes, indeed tenants have requested appeals when the rent guidelines are at or below the guideline. Mr. Alcock : Mr. Deputy Chairperson , how many appeals were there in total this year? (Mr. Bob Rose, Acting Deputy Chairperson , in the Chair) Mrs. Mcintosh: This past year, in tot al, 809. Do you want more information than that? Mr. Alcock: Mr. Acting Deputy Chairperson, yes, I would. I would like to know, of the 809, how many of them were appealing increases above the guideline. Mrs. Mcintosh: Our information irs not recorded with above guideline or below guideline.

It is not recorded in that way. Mr. Alcock: Mr. Acting Deputy Chairperson, I am curiou s. I ma de the state ment that in my experience no one that has dealt with me has ever appealed a rental increase that was at or below the guideline. However, the minister said that a lot of people did, and I would like to know, of the 809, how many did? Mrs. Mcintosh : Yes, Mr. Ac ting Depu ty Chairperson , of the people the member for Osborne has dealt with, he has not had this experience. I do not think he has probably dealt with quite as many people as the branch have dealt with.

They do, in their memory, have the experience of dealing with tenants who have appealed decisions that are at or below the suggested guideline. What I do not have for the member is the exact number that were acted upon in this way. Mr. Alcock: Mr. Acti ng Deputy Chairperson, I do wish to assure the minister that there is no question about that whatso ever. The department does deal with more rental appeals than I do, thank God. I find, for the most part, the department deals with them quite effi ciently, effect ively and that the staff are, by and large, quite helpful as people are trying to access information .

What I am wanting to know-and I understand the minister saying that she does not have this informa tion, that she knows that somewhere in the memory of the department somebody actu ally appealed a rental increase that was below the guideline, but she cannot tell us how many of those took place In this 809. I suspect that this is such a trivial point that we should not spend a whole lot more time on it. * (1 550) But then let us come at it this way. Of the 809 that she does know something about, how many of them were initiated by landlords? Mrs. Mcintosh: The 809 is the numb er for landlords.

The total number-and I am sorry if I just gave the total number for landlor ds if you were looking for the total number for all appeals- for all appeals was 1 ,300, and the total number for landlords was 809. Mr. Alcock: Now, that 809 initiated by landlords, when a tenant-1 mean, a landlord will come in and say, I want an increase above the guideline and they will serve notice to the tenants in the building within a certain time frame that they are about to do that. When the tenants say, yes, we wish to appeal this, is that cou nted within that 809 cases or is that over and above? Is that part of the 1 ,300? Mrs.

Mcintosh: That 809 is from the landlord. There were 357 from tenants, and there were 147 that fit the situation you describe. It is from both parties for the same unit of appeal. Mr. Alcock : Then the 357 from tenants, would they be appealing increases over the guideline? Mrs. Mcintosh: They would be appeal ing the increase as applied to them either below, at or

4617 LEGISLATIVE ASSEMBLY OF MANITOBA June 15 , 1992 above the guideline, whichever it is that they are wishing to see changed. Mr. Alcock: Let us just leave that one for one second to come back to my original reason for going into this line of questioni ng, but I find that kind of interesting and I will come back to this 147 in a minute. The 809 initiated by landlords, how many of them were successf ul? Mrs. Mcintosh: I do not have the exact number that the member is asking for here, but I can te ll him that it is in about 80 percent that are successful in their appeal.

About 5 percent of the landlords appeal, and about 80 percent of that 5 percent are successful in their appeal. I do not have the exact figure here. It is not broken down quite the way he has asked for the informa tion, but I think that general ballpark figure may give him the feel that he is looking for . Mr. Alcock: Of those, how many of them are asking for an increase above the guideline because of capital impro vements for renovations ? Mrs. Mcintosh: We do not keep the appeals listed in that form. Mr. Alcock: But you do have that kin d of information because when they file an appeal the- Mrs.

Mcintosh: That could be done via a manual search of each file because that information would be part of the record. It would require a manual search of each file to pull it out. Mr. Alcock: Do you want to recess while we do that? Mrs. Mcintosh: We would let the Estimates clock keep ticking? Mr. Alcock: Sure. I am actually int erested in that, and I realize that we are not going to get to that answer today. I am wonde ring, though, rather than belabour things here on this particular point, whether the minister would undertake to provide me with that information at such time as she has been able to assemble it.

Mrs. Mcintosh: Would the member be good enough to clarify for me exactly what he is looking for? My staff is here, and I will ascertain to provide that for him, but I would like to be just a little clearer on exactly what it is he would like us to pull out of the files. Mr. Alco ck: Mr.

Acting Deputy Chairperson , the minister has stated there were 809 requests for increases above the guideline, initiated by landlords in the last year, and what I would like to know is, of those 809, how many of those reques ts for increases wer e jus tified on the basis of extraordinary capital costs, re-equipping, capital impro vements, renova tions, painting, et cetera? Mrs . Mcintosh: For clarifica tion, do you mean that their appeal would be granted just on this with no operating costs or-? Mr.

Alco ck: I would like to know: In how many of these 809 was the request made where the capital impro vemen ts, ones that are subject to the depreciation allowances that we have discussed already, that exist in regulati on, were a factor in the request for the above guideline increase? Mrs. Mcintosh: Were a factor but not the sole determ ining factor? Mr. Alcock: I want to know what the landlord cited , as opp osed to what the decision was of the department. Mrs. Mcintosh: I think that my deputy has that written down, and we will endeavour to get you that information. Mr. Alcock: Mr.

Acti ng Deputy Chairperson, to come back to the 357 tenants who initiated an appeal without the landl ord's having issued a request. If I understand this correctl y, what the minister is saying is that 357 te nants appealed their rental increase without the landlord's having requested an above -guideline increase. Is that correct? Mrs . Mcintosh: Mr.

Acting Deputy Chairperson, those 357 tenant appeals are the appealing of decisions based on a decision for a rent increase that would be at or above or below the guideline, and initiated by the tenant who does not like the particular rent increase for whatever reaso n, and there are many reaso ns. Mr. Alcock : So of the 357 these would be rent increases that the landlord had sent out a notice saying: the guideline is 3 percent; I am charging 3 percent. A number of people would appeal that increase, even though it was at the guideline. So that would account for some of the 357. Mrs . Mcintosh: It could be, yes.

Mr. Alcock: Now , for rent increases above the guideline, to have the landlord in a position of charging a rent increase above the guideline, the landlord would have served notice of their intention to do so?

June 15 , 19 92 LEGISLATIVE ASSEMBLY OF MANITOBA 4618 Mrs. Mcintosh: Yes. Mr. Alcock: But in this circumstance, you are saying that the landlo rd would not be part of the 809, because the landlord may have been granted it by the departm ent and is not appealing it? They are quite happy with the department's position on their rental increase, but the tenants say: No, we think this is above the guideline, so we want to appeal this? That is why they are not, also, relating to the same landlords. Presumably, these 357 people are dealing with landlords that are other than the ones in the 809 appeals. • (1 600) Mrs.

Mcintosh: Those 357 are not necessarily respondi ng to the 809. Mr. Alc ock: Just to clarify this, as I understood, the previous answer was the 357 were not part of the 809, that there were 147 that were. These 357 are initiating appeals that have nothing to do with the 809 landlords. So they are initiating appeals, presumably, in disputes or discussions with other landlords . Mrs. Mcintosh: That is correct. Mr.

Alco ck: Now, before I finish this, just to clarify, when we say that there have been 809 appeals by landlords, when you count an appeal , if a building has 50 units, does that count as 50 appeals, or are we talking about 809 separate buildings? Mrs. Mcintosh: Yes, the landlord appeals the number of units. If he has a 50-apartment building, then that would be 50. Mr. Alcock: So conceivably if there were an 809-unit building in the pro vince, we might have only one landlord who is being contested here? Mrs. Mcintosh: That is right. Mr.

Alcock: Similarly, with the 357, those could be a grou p of tenants having got together within one building, that are contesti ng that they get counted in that fash ion? Mrs. Mcintosh: Yes, I am advised that could be so. Mr. Alcock: Now, of those 357- The Acting Deputy Chairperson (Mr. Rose): The honourable member for Osbo rne. Mr. Alcock: Thank you, Mr. Acting Deputy Chairperson , I am sorry. I do not mean to rush, although I am trying to expedite the process, as is my practice in the House to try to move things to help the go vernment along as quickly as I possibly can. (Mr.

Deputy Chairperson in the Chair) Of the 357 then, the minister has made the case that a portion of those are appealing-the landlords sent them a notice saying it is 3 percent; we are charging you 3 percent. They do not like that, and they are going to appeal il A portion of them are saying the landlords sent them a notice that the guideline is 3 percent and they are raising it by 1 0 percent, and they are saying they do not like that and they are going to appeal that.

A portion of the landlords sent them a notice saying, it is 3 percent, but he is only go ing to charge them 2 percent, and a portion of them are appealing that . Can you divide that 357 up among those three groups? Mrs. Mcintosh: It is tech nically possible, but staff would have to go back to source documents. While it is poss ible, I do not think it is probable that it would oc cur. Mr. Alcock: Oh. Mrs. Mcintosh: I do not think people would come forward with that kind of request. Mr. Alcock: That gets back to my opening state ment on that particu lar point. You are going to give me the stuff on capit al.

A second area that came up in at least two appeals that I was involved in, was this question of improvemen ts, capital improve ments, to a building or unit or whatever. The question came up about the nature of the relations hip between the landlord and the person supplying the repairs.

For exam ple, in one instance in particular where the tenants had done an enormous amount of work, what appeared to have happened was that the landlord had contracted for a considerable amount of repairs-repairs to the roof, painting, repairs to the lockers, parking lot, all of that sort of thing-had contracted for that work, had been billed for that work, and had paid for that work.

Those pa yments, those receipts were part of the evidence that was supplied in support of this rather large rent increase, but the person who had billed the landlord was the landlord himself, in another company, where he had basically hired himself as the contractor to do all this work. There was a great deal of question about the legitimacy of that, particu larly since the amounts charged for particu lar items did seem to be somewhat out of scale. I am wondering whether or not it is a policy of the department to prevent such practices or whether

4619 LEGISL ATIVE ASSEMBLY OF MANITOBA June 15 , 1992 that is a circumstance that both arises more than this one unus ual cir cums tance basis and is encom passed within department policy? Mrs. Mcintosh: I should indicate first of all that, no, we do not encourage landlords to bilk the tenant, so to speak, which is what you are implying. It is not a policy of the department to encourage the landlord to bilk the tenant. I do not think it ever has been the policy and it will never be the policy, and nor do we encour age tenants to abuse landlords. So let us get that clear.

Then I will say that we do permit landlords to do work for themselv es in term s of painting the building or whatever the renovations or chores were. The only thing the department stipulates in their examination of the papers in the background that comes forward is that the amounts must be accurate and they must be fair and reaso nable in terms of marketplace prices. Similarly we will allow sweat equity, for example, of a new landlord who is doing, not necessarily a new landlord, but of a landlord who is doing his own repair and is-pardon ?

We will allow that sweat equity, it is not a very large amount that we will allow, but we do take it into consideration because that is labour performed, for which if he had to hire someone from outside , he would have to pay a certai n wage. Mr. Alcock: I will forgo rising to the minister's responses. I am pleased to see that the department is operating on the side of truth and beauty, and I suspect it always was the case. Mrs. Mcintosh: Pleased to hear you acknowledge that. Mr. Alcock: The question , the real question here is, on what basis, what scale do you apply to this?

In the one case in parti cular that I spent a great deal of time on, the amounts billed by the company were quite out of line with the amount you could purchase the goods for, and evidence was produced to that effect. The amount that you could contract with somebody else-1 mean, I could understand if a landlord goes out and says, well, I got this quo te from X painting company and they are going to charge me $1 ,000 to paint it, and I am prepared to paint it for $800, but I want recognition for that. I have no difficulty with that.

What I have difficulty with is when the company says it will paint it for $1 ,000 and the landlord paints it and charges you $2,000. I am wondering about the steps that the branch takes to det ermine the acceptability of the charges that are made? Mrs. Mcintosh: I first have a question for the member and then I will provide him with the answer. This was one case that you worked with where the amount the company charged was excessive. I am just wondering what action was taken at that time?

I am presuming that if you were worki ng with this case, and the amount the company charged was excessive, that you took some action on behalf of the person excessively charged. I am curious to know what the departm ent did when you went to them with this particular case and gave them the specific deta ils. How did they respond in that instance? I would be interested in kno wing. Mr. Alcock: They allo wed the landlor d the increase, despite the fact-I mean, just to go through it a bit, because it

Document details

Collection	Manitoba — Debates (Hansard)
Citation	35-3-86a
Type	hansard
Volume / chapter	35th 3rd hansardpdf 86a.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	4440c4e47bb621e2b6ad113265ec55e8b4a536bc

Source file is stored in the law ingest library (pdf).