LEGISLATIVE ASSEMBLY OF MANITOBA Monday, 27 April, 1981 Time - 8:00 p.m. CONCURRENT COMMITTEES OF SUPPL V SUPPLY- MUNICIPAL AFFAIRS MR. CHAIRMAN, Morris McGregor (Virden): I call the committee to order and we're in Municipal Affairs, 1 (b). I believe the Member for Rossmere was speaking at adjournment. The Member for Rossmere. MR. VIC SCHROEDER: At adjournment the Minister had indicated that he was prepared to take a took at giving some consideration to changes which would permit municipalities to get involved with growth taxes.

There are obvious reasons. the fact that the Federal Government has discontinued a number of programs and the fact that we have inflation with us and the economy is not growing that much; costs are rising in the municipalities and they are basically stuck with a fairly inequitable property tax which is the only means they have of gaining income excepting for the 2 percent income tax. So I was just wondering in what areas the Minister would be prepared to look.

That is, would he be prepared for instance to look at sales tax, recommending to government that one point or something be added to permit the municipalities to fund their programs? MR. CHAIRMAN: The Honourable Minister. HON. DOUG GOURLAY (Swan River): Mr.

Chairman, as we broke for Private Members' Hour this afternoon I indicated that there are a number of areas that are matters of concern at the present time; one being the discontinuation of the CSC Program and although dialogue is still taking place in that area with the Federal Government in hopes that they will come forth with some new initiatives to replace the program that was suddenly stopped. As far as looking at areas of refinancing I think I can't be specific because we have not looked at that as yet; we're still hopeful that further funding will be available from the Federal Government.

There's a number of areas that no doubt could be reviewed if it is necessary to re-examine the financial input to municipalities. MR. SCHROEDER: Thank you, Mr. Chairman. I don't profess to be an expert at municipalities or municipal funding so I'm just wondering whether the Minister could give me a specific example of the type of program which used to be funded which is not now. For instance, I recall several years ago there were several villages in rural Manitoba who were putting in some form of waterworks, some form of sewage disposal and there was a substantial input from I believe the Provincial Government.

Is that type of program still ongoing? MR. GOURLAY: The program that was discussed earlier through the Municipal Special Loans and Emergency Funding there was some specialized funding available through the Department of Finance 3047 and I believe there was a forgiveness on labour to the extent of $15.00 per capita and then that was reviewed and I think an additional $10.00 per capita was made available to the municipalities. That's going back some years ago under the previous administration.

There's the water and sewer program through the Manitoba Agricultural Services administered by the Department of Agriculture. MR. SCHROEDER: Yes. That program, would it for instance provide for an unincorporated village district if they were to apply tor sewer and water; that program, the Agricultural Services Program would then provide those funds, is that correct? Or a portion of the funds? MR. GOURLAY: That's right, and also the Agro Water Services, which is a slightly different type of program also available for UVOs. MR.

SCHROEDER: The $15.00 and $10.00 a head. are those unconditional grants to the municipalities? Do they go regardless of whether the municipality is involved in a capital program or not? MR. GOURLAY: That was under the Special Municipal Loans and Emergency Program that was geared for specific municipal programs and it was on the basis of Labour Forgiveness Grants. MR. SCHROEDER: But are there not other specific programs within the Department of Municipal Affairs? Is there not some funding for the muncipalities on a per resident basis? MR.

GOURLAY: There could be some per capita grants through line departments for specialized programming available to municipalities. At the present time we have Centennial Grants on a per capita basis that is provided to municipalities towards centennial celebrations. MR. SCHROEDER: Other than for those types of special funds, then what I'm hearing from you is that the municipalities fund all of their programs totally from property taxes excepting for the 2 percent income tax that goes to the municipalities, is that ... ? -(Interjection)- Two points, yes. MR. GOURLAY: Yes.

The income tax and corporate tax on the tax-sharing payments that is distributed to the municipalities; that's correct. MR. SCHROEDER: How do you calculate how much would go to a municipality of those two personal income tax and corporate tax points? MR. GOURLAY: On the tax-sharing payments?

Each year there's a fixed amount of money allocated by the Department of Finance and this is allocated on the basis of a per capita basis to the municipalities with a special urban supplement to those those based on $3.75 per capita for municipalities under 5,000 and $5.25 for those above 5,000 population to assist with policing and costs of that nature.

Monday, 27 April, 1981 MR. SHROEDER: The basic fixed cost or amount that you refer to from the Department of Finance, is that in fact the two points each year? Is a calculation made to determine the total amount of taxes raised per provincial point and you then get 2/54th of that amount or is it just a guestimate made? MR. GOURLAV: The level of funding each year is determined by the Act and the growth in personal corporate income taxes rather than by the province. MR. CHAIRMAN: The Member for St. George I believe was next. MR. BILLIE URUSKI: Mr.

Chairman, when we broke for the supper hour we were discussing the Special Municipal Loans Fund and/or programs which have been in place both federal and provincial to assist municipalities in constructing, repairing, and doing necessary works to the benefit of their citizens in their communities in terms of either whether it be fire halls, municipal garages, street repairs, necessary works for their communities that they felt necessary.

There was a lot of criticism, and rightly so, by the Provi ncial Government with the cutback of the Federal Community Services Program which accord ing to your gove rnme nt 's figu res where Manitoban municipalilities were to lose some $10 .5 millio n annually over a five-year period.

The Municipal Loans Fund had in it a sum of roughly $25 million, although I believe because of the federal agreement and you can correct me if I'm wrong and I'd like to find out, when the federal agreement came into place, in the community services agreement, did all the works under the Municipal Loans Fund stop as a result of the agreement unde r the federal progr am? Is this the reason that the pr ovince curtailed its program under the Special Municipal Loans Fund? MR.

GOURLAV: I understand that the Municipal Loans and Emergency Fund was separate and apart from the CSC Program and the last loans approved under the Mu nicipal Loans and this Emergency Program was back in 1977. MR. URUSKI: Mr.

Chairman, I understand that they were completely separate programs but the province during those years in absenc e of any federal agreement, in order to assist its municipalities over and above the Sewer and Water Program that we discussed earlier here today, the Community Sewer and Water Program, which assisted communities in providing basic necessities in terms of funding over a basic mill rate of I think it's 12 mills for sewer and 8 mills tor water or the reverse, but nevertheless, basic grant sharing of 50-50 of the costs above a basic 20 mill levy.

But there were other programs which communities applied for under the Special Municipal Loans Fund which were also as well as the federal program, which were labour forgiveness loans, where if the municipality, and I'm asking the Minister to correct me if I'm misleading or forgetful about the program where there was a labour forgiveness component in the Municipal Loans Fund, if during certain months of the year, primarily I think the winter months, that the labour forgiveness was 100 percent, the municipal governments supplied the materials for the progam and if the works were done during summer months, designated months, that only 50 percent of the labour component was forgiven.

That was the basic principal as I recall of the Municipal Loans Fund; virtually the same as the federal program or very close in terms of component. Maybe there are some differences but basically the thrust was the same. Now the Minister has indicated that the last loans that were approved were in 1977 and since then there were no further approvals.

Now last year we heard in this Legislature and in Manitoba, and rightly so, the consternation of your col leagues and yourselves and many municipal leaders in this province who came out and said, look, we had a program which we participated in in doing necessary works of building firehalls, in building garages, doing street repairs, sidewalks, whatever good works that our municipalities needed, we participated in it and it helped, it assisted our citizens, it assisted our employment situation in the rural areas and it assisted the general well-being of our commun ities at large in the areas that the councillors represented. lt required, of course, the input, certain contributions because of the materials by the local municipal councils who, under normal circumstances, would have been quite reluctant, to say the least, and we know over the years that mun icipal councils, ·because of the pressure on education costs, have tended to hold back on expansion of municipal programs because when the school budgets have come into them and they saw the school budgets, and they were the ones who were going to send out the tax bills, they were going to get the hammer over the head because they were the front-line people.

The school division trustees shifted the bill over and the councillors had to shift it out - I think the Member for Emerson will bear me out. As a result, when this program was cut back by the Federal Government and you and your colleagues went after them and said, look you are hurting us very much, I have to say; where is the provincial input?

Now we know that the Feds have cut back; we know that they haven't lived up to their resp onsibil ity; but wher e is the provi ncial responsibility, other than the Budget saying now even though we've had $25 million we want to make our financial figures look better than they are so we're going to shift back $24.8 million?

Where is the replacement, or at least some evidence of support to rural councils, and I think all of us can come up with countless projects, necessary worthwhile projects in each of our mu nicipalit ies where we, as rural mem bers reside, tha t are worth while, that are needed, and that our councillors are finding a very difficult time of trying to keep up with. But certainly they took advantage, whether it was the winter PEP Program; whether it was the Special Municipal Loans Fund; whether it was the Federal Program; they did take advantage of these programs and it did a number of things.

What do we have to replace that? What are we talking about then? Are we talking about a net reduction, or what are we really talking about? I hope the Minister can say to his municipal councillors, look, I don't want to hear - and I hope I don't hear the same kind of response as we were getting from your colleague the Attorney-General with respect to policing costs. I guess maybe it 3048

Monday, 27 April, 1981 backfired a bit. lt took a resol ution from the Honourable Member for Dauphin who brought in the reso lution de aling with poli ce costs hoping to generate a great consternation from this Legislature about federal negotiating position, but it kind of backfired because it then put the Attorney-General on the spot to come up with a statement and say, "Are you going to leave the municipalities high and dr y?

What is your position with respect to municipalities, or are you leaving them saying, no matter what happens, boys, you're on your own." That res olution I bel ieve at least forced the government to make its position known as to its responsibility. I believe there is a clear responsibility of the province to its brain child of municipal governments. I would like to hear from the Minister, what do municipal councils look forward to? Do they look forward to further pr essure?

Even though the program of municipal grants in Education is helpful, nevertheless the pressure still contin ues on the councillors and we know, over the last three years, that they have really taken the brunt in terms of services to people and property in the municipal areas because they have really been on the firing line with respect to increases in education which has forced them to hold the line and in many cases actually cut back on the services to rural residences.

You can look at many municipal councillors; when they're faced with it they held the line and by holding the line meant clearly a cut-back in services or at least a postponement of needy projects in their municipalities. it's really effected, I think the Minister should know, the quality of life in terms of rural Manitoba, the areas that you and I represent. We really should be concerned as citizens that at least we maintain enough assistance to our brain-child and our responsibilities in rural Manitoba that they aren't left and dwindling, Mr. Chairman. MR. GO URLAY: Mr.

Chairman, I belie ve the honourable member raises similar concerns as was expressed by the Mem ber for Rossmere but at the start of your comments you mention about the municipal loans and emergency funding having a special labour forgiveness arrangement and it was higher at one time of the year than another. I think it was 100 percent through the winter months and it was less than that during the summer season. The CSC Program did not have any special labour forgiveness; it was an outright grant. The project was either approved or it wasn't and money was made available for that type of project.

Your concerns about the financing of municipalities; in lieu of the fact that the Federal Government appears to have cut back considerably on their funding to municipalities, as I indicated earlier, we're still hopeful that some new program will still be forthcoming. They haven't closed the doors completely although the CSC Program as such is dead . That was initiated by them as an interim measure until a longer term program could be established and that period of time or interim of time has already expired except approved projects still will be honoured up until the end of March, 1982.

As I indicated earlier if we do not have any success in obtaining funding from the Federal Government, and although some relief has been given to municipalities with the $70 million injected into the educational program, it does give some breathing space for most of the municipalities to pick up some of the jobs that they have maybe shelved over recent years. However, failing any further input from the federal people and as I indicated earlier we may have to examine the whole financ ial arrangements to municipalities, but we haven't closed the door. The discussions are still going on with the federal people. MR.

CHAIRMAN: The Memb er for St. George. MR. URUSKI: Mr. Chairman, I'll make some comments on the Minister's statement, but I have a couple of specific questions with respect to the federal program, CSCP, the Minister called it, I think - yes, Community Services Contribution Program. When were the last applications allowed to be put in, in Manitoba, under that program? When was the last time that applications were accepted in the province? Are they still being accepted up to this time or have they been ... ? MR. GOURLA Y: No. This is under the CSC Program? MR. URUSKI: Yes. MR.

GOURLA Y: They were I bel ieve about November-December of '79 was the deadline for applications under that program. MR. URUSKI: Mr. Chairman, the Minister indicated that the CSC Program was one which, if I understand him, allowed grant moneys totally forgivable for both materials and la bour or was it strictly la bour forgiveness grant moneys unde r the Community Services Contribution Program? MR. GOURLAY: No, it was a grant towards the total project. MR. URUSKI: Mr. Chairman, that bring me to another area.

Were the types of projects that were being accepted under that program similar to those in nature that were under the Special Municipal Loan Fund? MR. GOURLAY: I would say there was probably a wider range of projects being covered under the CSC Program. MR. URUSKI: Mr. Chairman, in terms of the Federal Program, was there a contribution that would have to have been matched by the local municipality and was there a limit to the amount of grant funding that was allowed under that community program? MR.

GOURLA Y: Apart from the nine large centres of the province considering Winnipeg, Portage, Bra ndon, Stein bach and the like; those nine communities that were using the program under the other types of programs that we referred to, The Neighbourhood Program and The Water and Sewer Program, approximately 93 percent of those was going to the nine larger commu nities; about 7 percent was going to the rest of Manitoba. Then when the CSC Program was brought in there was some $17 million made available under that program, of which 10 percent was allocated to areas other than the nine larger communities. 3049

Monday, 27 April, 1981 MR. URUSKI: Wel l, Mr. Chairman, that's quite interesting that the remaining municipalities within the province were allocated approximately $2 million in a special program for municip al works as compared to 15 million, if I'm getting the Minister's figures correctly, for nine communities and certainly I believe the nine communities would be deserving and probably could have, and maybe did have, projects for those commun ities that were necessary and worthwhile.

I don't dispute that at all; but certainly the remaining municipalities to have $2 million to be made available to them, surely this would have been an area where the province, with some imaginative thinking, would have been able to constructively use the Special Mun icipal Loans Fund to do vetail, because how many municipal districts have we got? Well over 12 0; 202 municipal districts within the province and if we take $2 million you're talking what? $20,000 per district? That's what it amounts to possibly. -(I nterjection)- $1 0,000 per municipal district.

There's not much of a project at today's cost that any municipal distr ict might want to undertake. A municipal garage to house the lowly grader will pro babl y run $30,000, $40,000, $50,0 00 in a municipality, Mr. Chairman, to do some work or the like or renovations to the firehall. That's really what we're talking about, Mr. Chairman, and to have the Province of Ma nitoba say that, look, we're now cutting back on the program, is certainly almost unbel ievable. Al most unb elievable to have this Minister say, look we're hoping and praying that the Federal Government will change its mind.

You know, right now there's still some grants floating around because those nine communities who were allocated the 90 percent of those $17 million' haven't used them all up. But, Mr. Chairman, where do the local municipal governments go; I mean, there's just nowhere. What we're going to find, and I'm sure has been found, is that virtually there's been a standstill; or else, Mr.

Chairman, and I'd like the Minister to comment, some municipalities who may be in a favo urable position and have been in terms of assessment and being able to have some moneys in reserve have been able to quickly utilize those grant funds and the areas which have been historically poor, in terms of accessment and did no t have any reserves or financial base, could not take advantage and they were even worse off over the four years of the Special Municipal Loans Fund. This would have been a time for some imagination, Mr.

Chairman, of using the Provincial Loans Fund to the municipalities and say to them, look, we know there's only $2 million; or unless this has been by design, Mr. Chairman, and I'd like the Minister to comment whether the Federal Program agreement was by design to say that we are primarily back to the TED report; we are back to the growth centre idea; we're back to saying that we will support nine major communities in the Province of Manitoba and to hell with everybody else. I'd like to know from the Minister what the terms of the agreement were?

Was this by clear design by your government to say that we are moving back to the growth centre concept and we will say to the other communities: "We will give you the crumbs. There's $2 million between 200 of you"; and there are many more small towns than there are municipalities. So, Mr.

Chairman, I think the Minister owes it to his municipal people to say to them; we're not 3050 leaving you cold even though we've spent 90 percent of the money on nine major communities but we're going to have definitely a program for you, we're not going to leave you behind, we want to make sure that the quality of life in those communities and the quality of services is not downgraded because of the pressures that you've faced over the last few years, because of out cutbacks, because of our restraint, because of the budgeting, that we have said we wanted to go to New York and we wanted to tell the investors that Manitoba was doing a great job.

You know, the Premier went in 1977-78 to the New York investors and said, look at the great job we're doing; we're one of the few provinces who have been able to reduce our spending and we have lowered our expenditures and cut taxes and we have been able to do this through prudent fiscal management, Mr. Chairman. He went out to the investors, yet he left the councillors - your councillors, Mr. Chairman, Mr. Minister - he left them to hold the bag and to take the brunt of the property taxpayers' wrath when there was an increase.

That's the reason why municipal expen ditur es have been held back, because councillors were under extreme pressure over the last four years because of the education costs, you know, where they didn't have any control over, and I don't know whether they could have done anything about it in any event, but they were the first-line people. So, Mr.

Chairman, I think the Minister owes a lot of explanation to the rural municipalities and to the councillors as to what is government policy with respect to the communities that they have assisted, where they have taken and allowed nine communities to handle 90 percent of the moneys, and I'm not opposed to that, that if you are going to say that we are going to put in X numbers of millions of dollars to make sure that regional areas have some certain ameni ties, but you don't leave the rest of the commun ities high and dry because by the very natur e of $2 million, unless you've got a fair assessment base, you're not going to be able to take advantage of that program and unless you supplement that with the Special Municipal Loans Fund, for example, to add to that, and especially the less wealthy areas, they will not be able to take advantage of that program.

That's probably what has occurred, unless the Minister has some facts to refute my analysis of this. MR. GOURLAY: Mr.

Chairman, when the CSCP was brought in, it was the intention or the will of the Federal Government to limit that type of funding to centres of 10,000 people or more. lt was negotiated to include smaller centres but after the funding had been cut off at $17 million and based on previous applications for programming unde r the previous program arrangement of neighbo urhood improvement programs and water and sewer programs, that worked out to; about 93 percent went to the larger communities and about 7 percent to the rest of the province.

So it was arranged to split it 90- 10 with the 10 percent being distributed to the communities other than the nine larger centres in the province.· Many of the municipalities did not apply to use the funding but I would say, just going from memory, about 75 or 80 percent of the municipalities applied for the funding for firehalls or some type of

Monday, 27 April, 1981 worthwhile municipal project. But there were also a number of municipalities that did not apply for any funding under this program. MR. URUSKI: Mr. Chairman, were there limits of funds that were available to these municipal districts of the roughly - am I correct - about $2 million that was available to them? Was there a limit in terms of percentage of the project; what was the limit that was placed on it? You know, $2 million doesn't go very far, or $1 .7million. MR. GOUR LAV: Mr. Chairman, this was paid out on a per capita basis to the rural municipalities or towns and villages.

They got something like $8. 10 or $8.20 per capita. MR. URUSKI: So, Mr. Chairman, regardless of the need and the financial stability of the municipal district, they were limited to $8.00 per capita. Let's say they needed a firehall and the firehall was $1 00,000 but they had 2,000 people in the municipal district, they would be eligible then for $1 7,000.00. Would this be the limit of their eligibility? MR. GOURLAY: That's correct. In some cases the funding may have accounted for a large portion of the project. In other cases it might have been a very small percentage of the project. MR. URUSKI: Then, Mr.

Chairman, my point stands, that the more sophisticated and mo re aff luent municipal districts would have been able to take greater advantage of this program, not in terms that they would have got much more money because they would have been guided by the population. At least the amounts would have been basically spread about fairly equally, based on a per capita basis, but the financial stability of the capacity of that municipal district would have dictated whether or not they could have taken on a project.

If they needed something desperately, even though these funds would have been available, chances are some of them could not have taken

part in this program. So, Mr. Chairman, it makes doubly my argument that the closure - you know, when the Minister says we are going to have another look at this whole thing if the feds will come through, what are we going to have a look at? There is not going to be any type of legislation on the books and no fund available in terms of at least having something to fall back on in assistance to local governments.

When that is gone, we either come back to the Legislature, if we are really saying that we are serious about what we have been talking about and bring in another piece of legislation, which really doesn't make sense, Mr.

Chairman, because we have got one on the books now and I think unless ther e was something abhorrently wrong with the way the fund worked, and if there was, I would like to hear from the Minister because it appears that the only rationale for the repeal of that fund is that it's inconsistent with our accounting principles and runs counter to the goals of governmental accountability to the Legislature and to the taxpayer. That's beee the analysis and the rationale, and I quoted from the Budget booklet on Page 61, and if that's what we are talking about, Mr.

Chairman, I think the mun icipal council lors of this province 3051 should rise up and say, look, you have taken away one program if you fail to agree, but at least don't take away the other program, make it available to us; let us know that it's available. But really, Mr. Chairman, it really hasn't been available. lt really ended in October of 1977. All we have done is pretty well filed off whatever accounts were on the books at that time and even that program had its limitations, no doubt about it but, Mr.

Chairman, at least it was geared in terms of need and in terms of the cost of the project, where at least the less aff luent municipalities, if they had a worthwhile project and it was labour intensive, they took greater advantage of it. They were not limited solely by the population, they were limited by the amount of money they could raise in terms of materials, at least the labour portion of it. In most cases the labour portion is at least 50- 50; that's pretty well what the general construction guidelines are of any project, usually you're running half and half.

So that there would have been a much greater sharing of the expenses in the municipal area than presently was the case under the Federal Community Servi ces Co ntribution Program, Mr. Chairman. MR. CHAIRMAN: The Mem ber for St. Johns. MR. SAUL CH ERNIACK: Mr. Chairman, I need some clarification. When was the CSCP program cut off? MR. GOURLA V: lt was during the month of November, 1980. MR. CHERNIACK: Mr. Chairman, no wonder I am confused. The Minister just said that they stopped lending in November and December, 1979. I made a note of what he said. MR. GOURLAY: Mr.

Chairman, that's when the applications under the present two-year progrm had to be received. MR. CHERNIACK: Then November, 1979 was the deadline; they couldn't apply after November of 1979, is that correct? MR. GOURLAY: That's correct. MR. CHERNIACK: Mr. Chairman, the Minister said that only a few months ago it was discussed in the Legislature. Now that I understand from the Minister that in November 1979 applications were cut off, then for some 17 months the Minister, being aware of the fact that the program was finished, has done nothing but hope that the Federal Government would reinstitute it.

Is that an unfair description of the situation in regard to this program? MR. GOUR LAY: Mr. Chairman, the Federal Go ve rnment, back some years ago, had three programs that were assisting various municipalities. One was referred to as the NIP program; there was a Water and Sewer Program; and there was one other program. They suggested to the provinces that they would like to roll this into one program and they set up the CSCP program as a two-year interim to run for a two-year period and applications were received by municipalities for approval under this project and

Monday, 27 April, 1981 the applications had to be received by November of 1979. In the case of the Province of Manitoba, an agreement was signed which expired in July of last year but by that time there was to be a long-range program in place funded by the Federal Government. Along came November of 1980 and the Feds said, "We have changed our mind we want to scrap the whole program"; but left some indication that this would be replaced by some ot her new kind of program called something else other than CSCP.

Negotiations are still under way with the federal people to come up with a new program to assist municipalities. MR. CHERNIACK: Mr. Chairman, whilst the Minister and his colleagues are twiddling their thumbs nothing is being done; there is no program, the government has no alternative program. The government has just dissipated $24 million in a one-time shot to reduce the deficit. They are repealing the Act and therefore their whole approach is a negative approach to the entire question of this kind of assistance to municipalities.

They are now resorting to blaming the Federal Government as if their responsibility ends with the Federal Government's program but, no, it ended a little further down the line; it ended with the government taking away one program that is on legislation for which there are fu nds and the government has been twidd ling their thumb s, collectively. I intend to move on, Mr. Chairman, but certainly the Minister should have an opportunity to respond to my comments before I move to the next item. MR.

GOURLA V: We have gone around this two or three times already and I don't know what else I can add to it except that I can say that the municipalities in the Province of Manitoba, for the most part, were happy with how the CSCP program had been handled. Most of them sent telegrams to Ottawa giving support to the program but it was all in vain because the federal prople decided that they were not about to continue any kind of CSCP program at the present time but left the door open for further discussions that a new program might be initiated some time before very long. MR.

CHERNIACK: Her e we find the Federal Government set up a program and gave notice that it was a two-year interim pr ogram; said that applications would be cut off in November, 1979, 17 months ago. The Minister knew it; his government knew it; the municipalities liked the program; they enjoyed the program; they sent telegrams to Ottawa; why didn't they send telegrams to Winnipeg? Why didn't they come to the Municipal Affairs Minister and say, "The Feds, the dirty guys, had cut off a great program"? Why didn't the Minister bring in that same program if it was that popular.

He had more money on the books at $24 million than the Feds had been in at $17 million. So it's all very well to say, well, the Feds didn't do it, and the municipalities were terribly disappointed; they sent telegrams. Obviously they sent telegrams to the wrong capital city; they should have gone to the Province of Manitoba where the original problem lies; the pr ovince which is responsible for municipalities, not the Federal Government, and they should have demanded it from the Minister or the Minister should not have had to wait.

So I really think that from November, 1979, to keep talking and hoping that the Feds would play their role, which is a good role to play but not their responsibility, the Minister of Municipal Affairs comes here with a budget which has no provision for this kind of a program. He comes with a knowledge - or maybe I'm too kind - he comes with a lack of knowledge that the $24 million has been taken away and thrown in to reduce the apparent deficit and not knowing that the Act is being repealed. I don't think that matters; I don't think he ever intended to use the Act.

So the fact that he has discovered it is being repealed is of no real concern to him because it was, I assume, academic from his standpoint. Mr. Chairman, I listened to the Minister earlier talk about the growth taxes and the sharing of income taxation and the Minister said that a fixed sum is established by the Department of Finance, which is distributable amongst the municipalities.

I want to suggest to him that that's not correct, that a fixed sum is not determined but rather an estimate is determined of what the revenues will be and that there must be a subsequent adjustment because not one penny of the 2.2 percent, or whatever the allocation is, not one penny is an amount which the government ma y retain, it belongs to the municipalities. So surely he was incorrect in saying a fixed sum of money; there must be some other calculation involved. MR.

GOURLAV: The amount of money that is kno wn is made available each year by the Department of Finance to Municipal Affairs and distributed on a per capita basis in addition to the urban supplement that I explained earlier. MR. CHERNIACK: Will the Minister at least agree that it's not a fixed amount but an amount which is arrived at after the revenues are known and that the municipality's share is calculated and paid to them? MR. GOURLA V: The amount of money that we get from Finance is a fixed amount that's given to us and we divide it accordingly based on the income tax and the corporate tax. MR.

CHERNIACK: Isn't the Minister responsible to kno w how much mo ney is av ailable to the municipalities under the special Act, whose name escapes me for the moment but is the Act, which provides for the sharing of growth revenues, of tax revenue. Isn't he responsible to know how much it is; isn't he a trustee for the municipalities? MR. GOU RLEV: Mr. Chairman, we get a fixed amount of money alloca ted to us from the Department of Finance for distribution under this program. MR. CHERNIACK: Mr.

Chairman, the Act that I'm refe rring to pr ovides tha t, I'm speaking from memory, I think 2.2 percent of Income tax and I think 1 percent of Corp orate Tax belongs to the municipalities, not to the Provincial Government, it belongs to the municipalities. Since it is not known and can't be known what that amount will be; what amount will be collected in, let us say 1981, surely all that can be done is the Department of Finance guesstimates, estimates how much it is likely to be 3052

Monday, 27 April, 1981 and that's how it shows its revenue on the revenue side of the items, its own revenue, and informs the Minister of that. Then surely they are required to make adjustments based on what is learned later as the actual collection. MR. GOURLAV: The member asks whether this is a fixed amount or an estimate. No doubt it has to be estimated by the Department of Finance that we get a fixed amount from an estimate as arrived at by the Department of Finance. MR.

CH ERNIACK: Do es the Department of Municipal Affairs or the Minister get a subsequent calculation showing the corr ect amount with an adjustment based on what is actually payable? MR. GOURLAV: That is taken into account on next year's allocation of funding under the Income Tax and Corporate Tax. MR. CH ERNIACK: And now we know, Mr .

Chairman. lt took a while but now we know that this money belongs to the municipalities; that this money is col lected on behalf of the municipalities; is distributed by the Minister of Municipal Affairs and that it is the actual amount which is due to them. lt is estimated in one year; it is re-calculated based on more up-to-date information the following year and is paid in that year; that's clear now.

May I know from the Minister, dealing with growth taxes and these are the only gr owth taxes I can think of tha t the municipalities are permitted to collect, what other types of gr owt h taxes have the mu nicipalit ies requested they be permit ted to use for their revenues in place of Property Tax? MR. GOURLAV: I have not had any specific request for the sharing of other growth taxes from the municipalities. MR. CHERNIACK: Mr .

Chairman, it's my recollection that the City of Winnipeg passed a resolution asking for certain specific increase growth taxes and the municipalties at that time did not do so and that subsequently, and more recently, the municipalities did indeed come to an agreement on the growth taxes that they wanted to participate in. Is the Minister not aware of that? MR. GOUR LAV: Apparently some years ago the mu nicipalities did appr oach the Provi ncial Government about the possibility of sharing growth taxes including, other than those that are being shared at the present time. MR. CHERNIACK: Mr.

Chairman, it's fortunate that the Minister for Urban Affairs is present. I wonder if he can give us some enlightening comment as to what is the nature of and how ... Mr. Chairman, I just wanted to . . . MR. CHA IRMAN: Maybe if we would just pay attention. I don't know which is noisier, the ratt ling rads or the ratt ling lips but it's awfully confusing up here. The Honourable Member for St. Johns. MR. CHERNIACK: Mr.

Chairman, I wanted to take advantage of the presence of the Minister for Urban Affairs to find out whether he can assist the Minister of Municipal Affairs to inform him or remind him of what it is that municipalities have been asking for recently in connection with participation in growth taxes revenue. And, I mention that because the Minister for Municipal Affairs said that some years ago there was a request. My impression is it's much more recent. I'm wondering, Mr. Chairman, through you, whether the Minister for Urban Affairs can clarify or elucidate on this? MR. CHAIRMAN: The Honourable Attorney-General. HON.

GERALD W.J. MERCIER (Osborne): Mr. Chairman, there has been, related to my resp onsibi lities as Urban Aff airs Min ister's responsible for the City of Winnipeg, requests for sharing in growth taxes which I'm prepared to deal with in my Estima tes; requests from other municipalities will have to be dealt with by this Minister. MR. CHERNIACK: Yes, Mr. Chairman, that was my impression.

My impression goes further to the effect that there was a resolution passed at some fairly recent meeting of mun icipalities concurring in whatever it was the City of Winnipeg was asking so that it appears now on record, and I don't have the record, that all of the municipalities, through the organization of municipalities as well as the urban, or at least the City of Winnipeg, are in agreement that they want to share in growth taxes.

And yet the Minister of Municipal Affairs says he doesn't know anything about it and I must say that I'm surprised and I'm now starting to wonder whether I can be wrong in my impression. MR. MERCIER: Mr. Chairman , I don't want to mislead the Member for St. Johns. I wanted to indicate that in my Estimates I'm prepared to deal with this question of growth taxes as it relates to resolutions which have come from city council in recent years.

Whether or not those have been approved by either the Union of Municipalities or Urban Association, I'm not quite sure right now, but I'm only giving resolutions from City Council. MR. CHAIRMAN: The Honourable Minister. MR. GOURLAV: Mr. Chairman, we can certainly check on the resolutions that have been brought to our attention by both the Urban Association and the Union of Manitoba Municipalities with respect to this. MR. CHERNIACK: Mr. Chairman, that would be helpful. I think it would be helpful to the Minister as well as to the Commit tee to know what it is municipalities want in that connection.

I want to assure the Minister of Urban Affairs that he didn't mislead me at all. I understood him exactly the way he later explained it. The only thing I would like clarification on is my impression that indeed the Un ion of Manitoba Mun icipalities did ask for participation in growth taxes and I'm really surprised that the Minister, whether formally or informally, is not aware that they do want to participate in growth taxes to a greater extent than just the income tax we've referred to and yet he gives the impression he knows nothing about it. 3053

Monday, 27 April, 1981 MR. GOURLAY: Mr. Chairman, I have indicated that I would check furtt:ter on the recent resolutions that have come before me and give you this information. MR. CHERNIACK: May I ask whether the Minister has had any discussions at all, informal or formal, with any municipalities dealing with participation and growth tax? MR. GOURLA Y: Not since I have become Minister of Municipal Affairs. MR. CHERNIAK: Well, Mr.

Chairman, I'd like to express my regret that here a program was brought in, admittedly, by a government different than the Minister's government, where the municipalities were given the opp ortu nity to partici pate in gr owth taxi:ltion and offers were made by the fo rmer government to municipalities, that if they could come to agreement on the nature of participation in other growth taxes or indeed, if they wanted to increase their share of income tax, that there would be an open door for them to discuss what their wishes were and I am surprised that they apparently have not gotten through to the current Minister, who has been around for a while now, to indicate that they would like to do that and I am really surprised, because they are the ones who have been complaining most vociferously and to my mind, justifiably, that they need help and substantial help, to relieve the burden of property taxation, so that I'm looking forward to the Minister's report as to what he learns, because of the surp rise I've already expressed.

MR. CHAIRMAN: 1.(bX1) - pass - the Member for Ste. Rose. MR. A.R. (Pete) ADAM: Mr. Chairman, I wanted to raise the same points on the Special Municipal Fund, but most of the comments that I would have made have already been raised by my colleagues.

But I do want to say nevertheless, that it seems to me that the Minister has placed himself in an incredible position by criticizing and probably rightly so, but in his case, he's putting himself in a difficult position by criticizing the Federal Government for cutting back on a federal program and at the same time, the Minister has given the municipalities we'll say a double whammy, by cutting back on a provincial program that had funds available there all the time.

So I feel that the Minister's position certainly is very difficult indeed, for him to say that the Federal Government is wrong to cut back on a program that only affected a few municipalities, they only affected a few municipalties. Here you have a program which was available to all municipalities, large or small, or rich municipalit ies or poor municipalities.

These programs are available to all of them and I'm wondering why the Minister and the government saw fit to cut back on a provincial program that was in place, was satisfactory, was doing the job that it was intended to do, and 1 find it just incredible that the Minister can sit there and criticize the Federal Government when he did what I consider to be far worse than what the Federal Government is doing.

I want to put that on the record and I would like to at the same time, ask the Minister now that they're negotiating a new agreement with the Federal Government, is it going to be the same kind of an agreement where only the larger municipalities will be able to avail themselves to that program and all the balance of the municipalities, the 190-odd, or 95- odd municipalities that have been by-passed on the federal program? Will it be the same thing? Will it be a repeat of what has happened in the past? lt seems to me 1hat wh�:�t my colleague for St.

George has said, that you could dovetail these programs together and where some municipalities couldn't qualify for the federal one, at least there would be the other program ther e for those municipalities that couldn't qualify for the federal program. If the Minister would want to respond as to why. MR. GOUR LAY: Mr. Chairman, we have been dealing with this item for some time. Perhaps the Memb er for Ste. Rose was not here for all the discussions. The federal people initiated the CSC Program as an interim measure until a long-term program could be put in place.

Now they have seen fit to discontinue the CSC Program and we're not sure at this point what type of programs they may have available for the various municipalities but hopefully this will be achieved soon. MR. CHAIRMAN: I just wonder if we could have some assistance here from the committee. We do seem to be rambling all over the whole system here and this item is comparitively small in comparison to say, Budget and Finance, which was many times larger.

No w maybe you 're going thr ough the waterfront and patch ever ything afterwa rds, but there has been a lot of repetition of the same approach and I'm at the mercy of the committee how you want it handled, but it does seem as though there is considerable repetition. The Memb er for Ste. Rose. MR. ADAM: Well, Mr. Chairman, you know, what we're talking about is the Special Municipal Loan Fund, Emergency Fund, and it seems to me that comes under Administration and I'm making a point and the Minister never answered my question. He keeps on talking about the federal program.

That doesn't excuse him because the Federal Government came in with a program for two years; it was going to expire after two years. That doesn't accuse the Minister for doing away with a program that was in place, that had money back in 1977. That's the point we're trying to make. Why would the Minister bring in a double whammy on the municipalities, especially the weaker ones and the ones that are not as large and as strong and as wealthy as those nine that avail themselves to most of the funds of the Federal program? MR. GOURLAY: Well, Mr. Chairman, you mentioned that this comes under Administration.

I would like to advise the honourable member that this particular program, this Mun icipal Loans and Sp ecial Emergency fundin g does not come under this department. lt is administered under the Department of Finance and handled through the Department of Labour. MR. CHAIRMAN: 1.(b) - pass - the Member for St. George. 3054

Monday, 27 April, 1981 MR. URUSKI: Well, the Minister can indicate that the program now falls under the administration of the Department of Finance, I believe his - if I'm not mistaken, his Municipal Services Branch would have been involved in the auditing and the collection of the funds. While one can argue that that program, say we'll try and get off the hook by saying, look, it's not within our department, needless to say, I'm sure some of your staff , Mr.

Minister, have been involved in the last year - I stand to be corrected - but be involved in the auditing and the finalization of the record-keeping that would be done. The Department of Finance would strictly do the overall bookkeeping end of it and your department would be handling it. Nevertheless, Mr. Chairman, I would like, from the Minister, if he could tell me those nine communities, one of which I assume is Winnipeg - the others, I would think, would be Brandon, Thompson, Dauphin, Selkirk, Portage, Steinbach, Flin Flon and The Pas.

Would that be fairly accurate in terms of the nine com muni ties where they would have about 70 percent of the population of Manitoba and they would have received about 90 percent of the funds under this program and the remaining 30 percent of the residents scattered all over the province would have been eligible to receive the rem aining 10 percent of the funds under the program? Mr.

Chairman, that's where I belie ve the government and the Minister, surely at this point in time, is he saying that he is going to abandon municipal governments, that there will no longer be any type of a pr ogram of enc our agement and assistance to improve works in many of the rural municipalities? Is that what the Minister is really saying? MR. GOURLAV: First of all, Mr. Chairman, I would like to get on the record that in no way has the Department of Municipal Affairs been involved with the Special Municipal Loans Program.

As I have indicated several times now, it was financed through the Department of Finance and administered through the Department of Labour. With respect to the emergency projects that may come up from time to time, certainly it's pretty difficult to budge t for emergency projects for municipalities. Nevertheless, having said that, I have indicated that if we are not able to negotiate a replacement program with the federal people, no doubt we will have to review our financing of mu nicipal ities.

In view of the fact that these programs are cut off forever, the mun icipalities certainly cannot afford to do the many jobs that they would be expected to do, whether it be renewal of water and sewer programs or wha tever. But as I indicated earlier, we are prepared to re-examine the municipal financing if this is necessary. MR. URUSKI: Mr. Chairman, I accept the Minister's statement that his department now is completely out of the financing of this program, or at least have any administrative input in it. Nevertheless, the program impacted on all your jurisdiction in terms of rural Manitoba.

All the municipalities depended on this pr ogram, or both programs, both the Sp ecial Municipal Loans Fund and the federal program of which your government knew that it was of a two­ year duration. You have indicated that it was going to end and notwithstanding that, you were prepared to, by government policy, be prepared to abandon them, and I haven't heard anything new coming out of you, other than saying, "We'll monitor it." I mean, we have heard that word "monitoring" for the last several years, practically from every department - we're going to mon itor the whole situation. Mr.

Chairman, the Minister of Health monitored nursing homes until the bed sheets came flying home, so to speak, Mr. Chairman, and now we have the Minister of Municipal Affairs doing the very same thing in terms of the Municipal Loans Fund, Mr. Chairman. He has really sold out the municipalities. There is just no doubt about it. I don't think he can get around it, no way.

I would have hoped that he would have said, look, even though we are getting rid of this program, we have some new ideas; we are fresh and we are going to pr ovide a new ap proa ch to assist municipalities in dealing with some of the projects they might have. The Sewer and Water Program was not, I don't believe, part of the Special Municipal Loans Fund, no.

That's a separate program and I gather it's continuing through the Department of Agriculture, as it was all the way through, through the Water Services Board and budgeted on a need basis in terms of, I presume pollution, water supply, and a whole host of criteria and is continuing, as it has been for the last eight or nine years, I think, going back to 1973, and it's continuing. But this program, Mr. Chairman, did assist many little municipalities, small villages, unincorporated villages within municipalities, to do certain work, and it assisted them greatly.

While we know that it was cut back in 1977, the Federal Government did come in with a two-year program and now we seem to be saying, well, we shrug our shoulders and say, well, we're sorry but we hope that they will change their mind, while the Minister's own colleagues in rural Manitoba are sitting there saying, well, look, help us out, some of our mu nicipalities are not very financially able. But there is nothing forthcoming, Mr. Chairman. Mr. Chairman, the Minister put out a bulletin in February where he quoted some figures dealing with the Education Support Program.

Figures that were quoted in the article, in the brochure, I wanted some clarification on because I just wasn't too sure and I want some explanation on that, since it was his department that has the authorship of this document called "The Municipal Informant ," Februay 18, 1981. On Page 14, it says, "In 1981, $423 million will be available to school boards for operating support." That's in the first paragraph. In the second paragraph, where they speak about, "the Education Sup port Levy in 1981 will be 37 mills in balanced assessment in farm or residential and 75 mills in other property.

This amount will raise $14 8 million and then, in addition, local property taxpayers will pay a special levy depending on how much local support, but government support for this program will be $288 million. Now, Mr. Chairman, I am assuming that the figure of $1 48 million added to $288 million, gives you a total of $436 million. However, in the first paragraph, it gives you an amount of $423 million. There is a bit of - maybe I am misreading the figures - there is a difference of $13 million in what is announced to be available and what is the actual support, unless 3055

Monday, 27 April, 1981 I'm reading the figures wrong. Maybe the Minister or some of his staff could clarify those figures that were put into the brochure. MR. GOURLAY: Mr. Chairman, we'll have those figures checked out and perhaps later on we can clarify that. MR. CHAIRMAN: 1.(b) - pass; 1.(c) - pass; 2.(a) - pass - the Member for St. George. MR. URUSKI: Mr. Chairman, the Municipal Board handles most of the dealings and appeals against ministerial de cisions de aling with asse ssment, bounda ry changes, planning matters and other areas, Mr. Chairman. Is the Municipal Board up-to­ date on its appeals? What is the

schedule of the Board in terms of its dealings with the municipal districts? MR. GOURLAV: Mr. Chairman, the Municipal Board is basically up-to-date, except for its normal workload and scheduling of hearings which run for maybe upwards of three weeks or so. MR. URUSKI: Mr. Chairman, if the Board is up-to­ date, there were a number of hearings held in the lnterlake over the last year dealing with boundary changes between the LGD of Fisher and the R.M. of Bifrost. Mr.

Chairman, there were several hearings held, recommendations made by the Board to the Minister, recommendations which were implemented by the government - it sounds like I have competition this evening, Mr. Chairman, with ... while there may be some skeletons in.the closet, Mr. Chairman, the government will have to act on those skeletons sooner or later, Mr. Chairman. The Minister did accept the Board 's initial recommendation with respect to those boundaries. Boundary changes were implemented, which if one could put it mildly, made no one happy.

Both Municipal Councils were left, to say the least, in a quandary as to their jurisdiction. The boundaries were clear enough, but they were so jagged and the like, that it ended up that a new set of hearings were called. Recently the hearings were held in the area and some legal arguments came up about the jurisdiction of the Board to deal with those bounda ries and hearings had to be adjourned and another set of hearings had to be called. These hearings have been now held, to the best of my knowledge.

I wonder whether recommendations · have been now received by the Minister from the Mu nicipal Board with respect to the most recent round of hearings and what the Minister's intentions are with respect to these boundaries. MR. GOURLA V: Mr. Chairman, I have not received the decision from the Municipal Board on the latest hearings involving the R.M. of Bifrost and the LGD of Fisher. I understand that the Board are currently awaiting for written argument from one of the Councils or both Councils.

Apparently one of the legal counsel was going to be away, so the Board is waiting for written argument from both Councils apparently at this time. MR. CHAIRMAN: 2. (a) - the Me mb er for St. George. MR. URUSKI: Mr. Chairman, I'm just leading into the area that I want to question the Minister on. Mr.

Chairman, there has been considerable legal costs that have been incurred by the municipal districts dealing with these boundaries, and to say the least, I believe that most people in the area, in both muni cipal districts were, to put it mildl y, surprised, that the government accepted the original recommendation of the Board in the way that the boundaries were set, because if I recall, the original petition that came in from residents of the LGD of Fisher wanting to be annexed into the R.M. of Bifrost; it came about, if one could say, historically as a result of the dissatisfaction of residents who lived north of the R.M. of Bifrost within the LGD of Fisher - dissatisfaction as a result of services that the LGD of Fisher decided to end an agreement with the R.M. of Bifrost for veterinary services.

This was one of the issues that was brought out as being very dissatisfactory to the residents who lived north of the R.M. of Bifrost. As a result they petitioned the Minister and the Minister did call for hearings. Mr. Chairman, the end result was that some of the residents or a portion of the LGD of Fisher, due north of the arm of Bifrost, was not taken into the new arm of Bifrost, which left a very, one could say, untenable situation, as to the LGD of Fisher trying to provide services to an area that, I think in some instances, they really couldn't get to, unless they went through the arm of Bifrost.

The question then arises as to whether or not the Minister should have accepted the recommenda tion or accepted the recommendation in terms of receiving it, but not implementing it, seeing the imp lications of the suggestions made by the Municipal Board and thus not putting the two Municipal Councils to legal expense that they have now had to incur in all these hearings, because the one hearing that I attended, the bulk of the hearing, ended up as a legal argument as to whether or not, one could or could not even discuss the north boundary, whatever that was; whether it was the north-south boundary or whether it was the east-west boundary, but it was the north boundary.

So we had a whole day of arguments of what could be admissible and what could not be admissible, costing the taxpayers of both of those areas large sums of money and I understand that it's probably going to run them for legal fees over and above the original hearings, maybe $1 0,000 to $20,000, just for legal fees, let alone in terms of the time that councillors have taken up.

I spoke to one of the Reeves and he said their legal fees, not counting these last hearings was over $6,000 and the other council, I hadn't spoken to them, so we're probably heading well over the $1 0,000 mark in terms of legal fees that I believe that the Minister probably could have avoided by telling the Municipal Board, thank you for your recommendation, but realizing the implications of it and saying, you know, we'd like you to have another look at those boundaries before we even implement them.

But what happened was, when those recommendations were implemented, and I can see part of the dilemma that the Minister was in because the Municipal Board making their recommendations, you can come with the argument you either accept it or you don't accept it. Well, one could accept it as being presented but not yet implemented, because 3056

Monday, 27 April, 1981 when you implemented it, what you had was a series of by-elections, because you had a new redrawing of boundaries, so you had to pay the cost of a new election. Then you had the municipal elections in the fall of that year, which everyone took

part in. They were the standard costs that everyone would pay for; that's understandable. Now if we change those boundaries again, which I assume will happen, because no one is really happy about the situation and we are going to be faced with an additional cost of the new by-election, new cost, let alone the legal fees that are going to mount up over a decision, Mr. Chairman, that I believe could have been avoided in terms of the recommendations of the Municipal Board, not by the Min ister saying we don't accept your recommendation. We accept your recommendation, but we're not implementing it.

Go back and say look, by heavens, the whole area to the north of Bifrost, which was wanting to come in, we'll have another look at it, but the Municipal Board looked at it, I guess on school division boundary lines and maybe they had some rationale on it. I'm not sure what advice they received from staff or whether staff were consulted in this whole process. lt makes it a very expensive proposition to the residents of that area and I ask the Minister for his guidance and advice as to what his government intends to do with those expenses that have been needlessly incurred by those two councils, Mr. Chairman. MR.

CHAIRMAN: 2.(a) - pass - the Honourable Minister. MR. GOURLAY: Mr. Chairman, as the honourable member has indicated, it's tr aditional that the Mi nister accept the recommenda tions of the Municipal Board and I might say there have been a number of petitions over the years on both sides of the issue and it's been not any simple decision to arrive at and of course, the Municipal Board deals with the evidence that is presented to it and this is how they base their event ual decision on the boundaries and I don't have any easy solution to the problem. They're at it again at the present time.

Hopefully this can be resolved. Now this does incur considerable costs for legal fees but nevertheless it's been a hotly contested issue with those local people. MR. URUSKI: Mr. Chairman, I am not suggesting that the Minister do anything, you know, he indicates that it has been traditional to accept the recommendations of the board. Surely the Minister was aware that in terms of, if I recall correctly, the desires, at least the desires of the people to the north of Bifrost in the LGD of Fisher wanted to come in.

The final ruling, and I just know it broadly, was that the area that was requested only part of the area came in and, in fact, a good portion of the LGD of Fisher, which I'm given to understand the Council of Fisher was not objecting to going into the RM of Bifrost but because of the nature of the ruling other areas which were not even considered originally that would be part of the annexation were taken in and that's where the whole problem came in. I ask the Minister, could this all not have been av oided, or at least a good portion of it.

The hearing process could not have been avoided, I understand that the people 3057 of the area should have their say and that their input into the process is uppermost and most necessary in terms of their wishes being felt by the Municipal Board. But I believe that the Municipal Board initially, one could say, while it looked at the question, probably had maybe something else in its mind. Maybe it was rationale; they tried to do it along school division boundaries. I think what they did is they set the new boundaries along the Evergreen School Division forgett ing about the question of municipal bo unda ries.

They started swinging municipal bounda ries into the school division bound aries and wha t happ ened was that they created a zig-zagged boundary that virtually no one could come up with some good agreements in terms of maintenance and looking after roads, doing the physical things that have to be done, because the school division bound aries seem to have taken sections of lands here and there and it was like a set of stairs, Mr. Chairman, within the area. What I am asking and suggesting to the Minister, and of course having hindsight is fine for the one that is using it but, Mr.

Chairman, surely the Minister could have received input from staff who would have been familiar with that area and said, hey, you're going to get yourself into a jackpot like you've never gotten yourself into because it's not going to make anybody happy by the boundary situation that was created because Fisher is going to have to come in all the way, almost as far away from their base for maintenance as they did originally and yet there are very few people there. lt would have been much more simple and much more understandable and I think the wishes of the people would have been met by including the bulk of that north area, as was petitioned, into the RM of Bif rost.

I am not suggesting, and I repeat that I believe citizen input, I agree that it's not an easy decision regardless of who would be in government in terms of being the Minister. What I am suggesting is that the ultimate decision is yours. Had the advice been given you didn't have to reject the recommendation of the board; you could have accepted it but just not implemented it. You could have held on to it realizing the implications of the situation and saying, look, it's not going to work; have another look at it.

Thus, I believe they may have been able to have another hearing, but maybe not even have another hearing, have another meeting of the board and relook at the physical aspects of the boundaries and deal with them, because it's really put the people in a difficult position. it's really put people up in the air because it has reopened the issue once again and by reopening the issue no one is really happy because some of the areas that Fisher was not ob jecting to, as I understand it, could have been taken into the RM of Bifrost; in other areas they would have preferred to be left out and the boundary that was established certainly didn't suit anyone because of the physical nature of the way it was put into place.

I would like to know and be assured by the Minister that some of those costs which will have to be borne, whether or not the province will look at some of tho se lega l costs and red rawing of boundaries again, Mr. Chairman. MR. GOURLA V: I certainly appreciate the comments from the honourable member who is closer to the

Monday, 27 April, 1981 situation and knows more of the fighting that has gone on between both sides of the question. The matter is currently in the hands of the Municipal Board and I am waiting to receive their recommendations on the current matter. With respect to the department assuming some of the legal costs, I wouldn't want to make tha t assurance because of setting a precedent that could snowball in future hearings through the province. I think that the local people there have insisted that it come to a hearing to end eavour to correct the situation.

Granted, the jagged border that eventually was recommended after the first hearing maybe left something to be desired, but nevertheless there was a very severe amount of infighting between the groups involved in the area and no doubt the Municipal Board felt that, with the evidence supplied to them, they came up with the best possible decision at the time, which obviously is not the case because we're back at it again. MR. CHAIRMAN: The Honourable Member for Ste. Rose. MR. ADAM: Thank you, Mr. Chairman.

I believe this would be the sect ion where we would discuss intermunicipal drains; I think it would come under this section. MR. CHAIRMAN: Order please. Are you talking about drainage? MR. ADAM: lntermunicipal drains. believe it would come under this section. I don't see any other section. MR. CHAIRMAN: To the Member for Ste. Rose, there is nothing under this resolution with regard to that subject matter that you raise. MR. ADAM: Perhaps the Chairman or the Minister could advise the comm ittee what

section of the Estimates can we discuss intermunicipal drains which is under The Municipal Act? Where would I have the opportunity to raise questions in regard to intermunicipal drains? MR. GOURLA Y: Mr. Chairman, I am not sure that there are any specific items here that would fall under. lt would be included, no doubt, under Water Resources. Are you referring to where there is a drain between an LGD and a municipality, or between two municipalities? MR.

ADAM: Between two jurisdictions of municipal governments that are affected by a drain, a water course, a canal, or whatever. lt is in The Municipal Act; the Minister is responsible for enforcing this Act. I am asking the Minister how are these sections of the Act ... MR. GOURLAY: Mr. Chairman, maybe if you can be mo re specific on your problem then we can determine just where this should fall. MR. ADAM: Let me give you some of the

preambles. Pages 123 and 124 of The Municipal Act: "A municipality shall not fill, dam up, obstruct, injure or destroy any water course or drain into a water 3058 course a greater quantity of water than the water course will reasonably admit, so as to cause the water therein to overflow or to damage contiguous lands unle ss there has been first provided or constructed by the municipality an adequate outlet for the water . . . etc., etc." Here is another

section over here: "Where a drainage ditch, canal, or other water course or any outlet therefore has been constructed or provided by the government or a municipality, in or across any part of the municipality; or (

b) work to dredge, clean out, shore up or support the banks of or otherwise maintain a river stream or other natural water course . . . " This is in the Act. I am asking you, Sir, how are these sections enforced? Who enforces these regulations? MR. GOURLAY: If it's a matter of any violations under this

section of the Act then it would be dealt with in the Courts. MR. ADAM: By whom? How would the Act be enforced? MR. GOURLA Y: The aggrieved party would take it to Court if it was a violation under that

section of the Act. MR. ADAM: The Act suggests that it goes to the Municipal Board. MR. GOURLA Y: The Municipal Board? MR. ADAM: Yes. Is the Minister not familiar with this

section of the Act? MR. GOURLAY: Mr. Chairman, although there is reference under the Municipal Act to enter municipal drainage it has not been a practice where this issue has been brought the Municipal Board. In previous situations wher e i1 's happened the affected municipal ity takes it to the court or the water resources and drainage people specifically dealing in drainage matters. MR. ADAM: What would happen, Mr.

Chairman, if a municipal corporation did apply to the Municipal Board to adjud icate on this problem; on a problem between municipalities where the water comes from one municipality, goes into another municipality and then goes out again back to the original municipality? MR. GOURLA V: Well, Mr. Chairman, proviSIOn is made under The Municipal Act to have this matter referred to the Municipal Board. In the past this has not happened, it's usually been resolved either in the courts or taken to a line department to clarify this particu lar matter.

If the mun icipality concerned wishes to use the Legislation in this case and have it referred to the Mun icipal Board then that's an alternative that they can use. MR. CHAIRMAN: The Honourable Member for St . Rose. MR. ADAM: Mr. Chairman, if this is a route that is proceeded with by a municipality and the Board makes a decision which I believe is final and may

Monday, 27 April, 1981 assess cost, apportion the cost to both municipalities or whatever, the Municipal Board I presume would then, as I unde rstand it, would make a recommendation to the Minister. Is that correct? MR. GOURLA V: The Municipal Board is not in a position to award damages under a situation like this. MR. CH AIRMAN: The Ho nour able Minister for Agriculture. HON. JAMES E. DOWNEV (Arthur): Mr.

Chairman, it would appear that the questions that the members are asking of the Minister are not very clear and that maybe it would be possible that the Minister could respond a little further to the member the next time the Com mittee sits. I think the authority that we're talking about, if I understand it correctly, falls within the jurisdiction of the Minister of Water Resources as far as the water districts are concerned. The management of the water would probably be better addr essed , if it's a specif ic prob lem , better add ressed to a specific question to the Minister of Natural Resources.

But, as far as the administration of the Act and the capability of one jurisdiction to either charge or take legal action against another one I think the Minister probably might want to respond to the member at the next sitting of the Committee. MR. GOURLAV: Mr. Chairman, I could add further to this

section of the Act that the Board are in a position to award maintenance costs to the various municipalities but where there is damages resulting from the misuse of the drain then the Municipal Board is not in a position to allocate those damages. In many cases there are individuals involved as well as the municipalities. MR. CHAIRMAN: The Honourable Member for St. Rose. MR. ADAM:

Section 277, sub 3. "Any person who fills up or partially fills up a drain is guilty of an offence and is liable to a

summary conviction, to a fine of not more than $1 00", which I say should be changed, I think that is ridiculous, "but in default of pay ment to imprisonment for not mo re than I month". I think this

section is really ridiculous, in any event, but it does indicate that there is some authority. The Minister of Agriculture, who gave us the benefit of his wisdom that this should be a Natural Resources problem, I want to say that the problem that I'm raising here has been brought to the Department of Water Resources for the last 15 years and it isn't resolved yet. So, Mr.

Chairman, we will have to ask the Minister of Municipal Affairs to maybe advise the people involved to come to the right Minister, under The Municipal Act, and get the Municipal Board to make a decision because obviously the Water Resources will not address themselves to the problem. Now they are suggesting to do some work in that area but it does not address itself to the sections of this Act. What the Na tural Resour ces Department is recommendating does not conform with the sections of this Muni cipal Act .

This legislation is on the statutes and there should be some way of applying it to problems that have arisen such as the one that I'm referring to. I'm not mentioning where it is but I'm sure that if you asked the Water Resources they'll know where it is. By the way, Mr.

Chairman, there's a special meet ing of the Municipa lities tomo rrow night, I understand, to look into this situation because the people who feel they are aggrieved have brought in some counterproposals to the remedial actions that the Water Resources and the Highway Department, and I don't kno w, ma ybe the Department of Agriculture is involved and maybe your department, sir, is involved. There are so many departments involved that you've got the people running around like beheaded chickens; they don't know where to go.

And, that is a problem because you keep shuffling this problem back from one department to the next and back and forth. Well, that's not our jurisdiction, it's somebody else's jurisdiction and so on and so forth. The Minister of Agriculture will be involved with water supply for a town so he'll be involved, there's not doubt about that. So, ther e are so many departments involved in here that the people just don't know where to turn anymore. The legislation is there and it should be possible for the citizens of this province to be able to avail themselves of these statutes. MR.

GOURLA V: Well, certainly they can make use of this legislation if they so choose. MR. CHAIRMAN: The Honourable Member for St. George. MR. URUSKI: Thank you, Mr . Chairman, I just wanted to go back to the comments and discussions that the Minister and I had with respect to the Mu nicipal Board hearing dealing with Bifrost and Fisher. Can the Minister indicate whether he is bound by legislation to ma ke an award dealing with liabilities and assets when bound ary changes are implemented with respect to the Municipal Board?

Well, I'm wondering whether that will be part of the recommendation that the Board makes since there'll be quite a sizable change in jurisdiction and boun daries that will take place. What does the Minister see happening in this case, over and above the boundary changes that will occur? MR. GOURLAV: The Board has the capabilities of making the necessary award in a case of annexation or territory changes. MR. URUSKI: Is that mandatory on the Board to make that type of a decision, or can they strictly deal with the boundary question only and leave aside any other issues that they may crop up? MR.

GOURLAV: it's mandatory that they make an award but it may be a nil award. MR. URUSKI: I see. That's all I want to know. MR. CHAIRMAN: 2(a) - pass; 2(b). The Honourable Member for St. Rose. MR. ADAM: Mr. Chairman, if an appeal is made to the Municipal Board on the subject matter that I 3059

Monday, 27 April, 1981 brought up, is it possible for an individual or a number of individuals to make an application? Can an individual make an appeal to the Municipal Board if he is aggrieved an will they look at his case? Now, Mr. Chairman, the Deputy Minister is replying for the Minister. I'm not asking the Deputy Minister. MR. CHAIRMAN: Remarks come through the Chair, we'll get away from this hassle. The Minister is looking up the answers the Committee has been told. The Honourable Minister. MR.

GOURLA Y: According to advice given to me it would have to be directed through the municipality to apply to the Municipal Board. MR. ADAM: There are some cases, I'm not sure unde r this section, but there are some sections where I think a number of ratepayers can make an application to the Board. I think you're wrong, you said yes. Is that not correct? MR. GOURLA Y: Not under this section. MR. ADAM: On another section. MR. GOURLAY: Mr. Chairman, not under this intermunicipal question that you raise. MR. CHAIRMAN: 2.(b ) - the Memb er for St. George. MR. URUSKI: Mr.

Chairman, has the Board been involved at all in the recent court decision dealing with assessment of property, the recent Solomon decision with respect to the assessment of residences and the like? Was that matter originally referred to the Board and then taken to court, or was it straight to the courts, Mr. Chairman? MR. GOURLA Y: Questions of liability have to go to Court of Queen's Bench. MR. URUSKI: I see. So the matter of assessment of the buildings was strictly a court decision. Well, we can deal with it under the Assessment Branch. MR. CHAIRMAN: 2.(b) - pass.

Resolved that there be granted to Her Majesty a sum not exceeding $3 12,2 00 for Municipal Affairs - pass. 3.(a) - pass; 3.(b) - the Member for St. George. MR. URUSKI: Mr. Chairman, with respect to the entire branch in terms of the grant structure that are paid to municipalities, is there any change in terms of the grant structure at all to municipalities? These are for the provincial buildings that are within municipal districts; am I correct? MR. GOURLA Y: No changes in the structure. MR. URUSKI: I just want to make sure that I understand that these would be ... Mr.

Chairman, if the Minister of Agriculture wishes to take part, would you recognize him and let him not interrupt as he is so rudely doing, Mr. Chairman? Mr. Chairman, there is a $260,700 increase in grants in lieu of taxes. These would be for which buildings? What are we really talking about, just to refresh my memory, Mr. Chairman? MR. GOURLAY: This is for the Legislative Buildings. MR. URUSKU: The Legislative Buildings, only? No, it must be other. Could the Minister give us - are ther e many municipal ities that receive the $16 million? How many would there be? Is it a very large numb er?

What would be the largest grant, for example, let's say the largest five grants? Maybe the Minister ... MR. CHAIRMAN: I wonder, if we are down onto (c) - I really hadn't passed (

b) and maybe if you allow us to pass (b), or else we'll be running up and down the boardwalk. 3.(b) - pass; 3.(c) - the Member for St. George. MR. DOWNEY: Mr. Chairman, I wonder if the Memb er for St. George would apologize because that's what I was trying to do when I suggested a couple of minutes ago, "pass," and he said it was a rude move and I really wanted to get on . . . MR. URUSKI: Mr. Chairman, I'm sure that the Minister really knows what he is talking about when he doesn't even have an Estimates Book in front of him, Mr. Chairman, or even right beside him. (I nterjection)- Yes, I'm sure. MR.

CHAIRMAN: 3.(c) - pass - the Member for St. George. MR. URUSKI: Mr. Chairman, would you give the Minister an opportunity to check the record, and don't be so hasty, Mr. Chairman, please. MR. CHAIRMAN: He has to signal that he wants the floor and I haven't seen that signal. MR. GOURLAY: Mr. Chairman, I was just waiting for the information on this question. There are some 2,409 applications which were paid to the different municipalities. There may have been a number of applications from individual municipalities, for a total of 2,409. MR.

URUSKI: That would be for government buildings, universities, Legislative Buildings, all public institutions, other than MHR C housing and the utility building s, that they would cover their own? - (I nterject ion)- That's in addition. Hospitals and schools would be included in that as well, in that figure? MR. GOURLA Y: Nothing on schools. MR. URUSKI: There are no municipal taxes? MR. GOURLA Y: Not in this. MR. UR USKI: Where would the grants be for hospitals and schools? Would they be under, like MH SC funding? Would they be paying grants in lieu of taxes for the hospitals and schools? MR.

GOURLAY: I'm not sure, but it doesn't come under this section. 3060

Monday, 27 April, 1981 MR. URUSKI: it's strictly for the office buildings that the province would have throughout the cities, towns and villages in the province. In terms of the grants in lieu of taxes, Mr. Chairman, are the provincial buildings reassessed at the same time as the other, when a municipality is being assessed? Would the provincial buildings within that municipality fall into that same category or are they evaluated once and the assessment stays on them? Would they be upgraded at the same time as all other buildings within that municipal district? MR. GOURLA V: Mr.

Chairman, I understand that they are upgraded at that time as well. MR. CHAIRMAN: The Member for Rossmere. MR. SCHROEDER: Thank you, Mr. Chairman. Does that mean that you would have a figure for the total assessed value of those particular public buildings in Manitoba, that is, universities and the Legislative Building, other government buildings and that type of thing? Do you have a total for that somewhere? MR. GOURL AV: We don't have that information right now. lt would take some time but we could supply it for you. MR.

SCHROEDER: I was just wondering whether it could be made available or whether in fact it is possible. I am not asking for it. Now, you indicated this does not include hospitals? Is that correct? MR. GOURLAV: That's right. MR. SCHRO ADER: Are hospitals exempt from municipal taxation in Manitoba? MR. GOURLA Y: I understand this is correct. MR. SCHROEDER: How about MH RC housing? MR. GOURLA Y: They pay their own taxes. MR.

SCHROEDER: Is there legislation that makes a maximum payable to any municipality, something like 5 percent of its assessed value, or something like that? -(Interjec tion)- There's no maximum limit so the mun icipality in which provincial property is situated would receive a grant in lieu of taxes which would be approximately similar to what they would have received were they taxable; is that correct? MR. GOURLA V: The only statutory limit is on the Legislative Buildings. MR. SCHROEDER: What kind of a statutory limit is there on the Legislative Building? MR.

GOURLA Y: For a number of years it was set at $1 00,000 and now it has been adjusted up to $260,700.00. MR. CHAIRMAN: The Honourable Member for St. George. MR. URUSKI: Mr. Chairman, in terms of the municipal districts, with respect to their borrowing 3061 capacity, are there many municipal districts within the province who have reached their borrowing capacity with respect to municipal projects and the like? What is the situation across the province with respect to the borrowing ability of municipalities? MR. GOURLA Y: Do you want the number that are up to the maximum of their . . . MR.

URUSKI: Yes, what kind of statistics do you have when you indicate a maximum, that is, I presume tha t is arrived at thr ough negotiation between the municipal district and your Budget and Finance branch of the government and there is some flexibility, some give and take depending on the nature of the request and the type of projects? Sort of historically, are more municipalities reaching what would be considered a limit to their borrowi ng capacity or is it holding fairly constant? MR. GOURLA Y: The limit set by Municipal Budget and Finance is established at 30 percent of equalized assessment.

There are a few municipalities that are clos e to the maximum but the maj ority of municipalities have quite a bit of leeway on that guideline in that area. MR. URUSKI: Over the last while, would you indicate that it has been normal in terms of borrowing within the municipal districts; there hasn't been any thing unusual in terms of mo re municipalities getting close to their maximum? MR. GOURLAY: I understand that this has been fairly consistent over a number of years. MR. CHAIRMAN: 3.(c) - pass - the Member for St. George. MR. URUSKI: Mr. Chairman, that would include all municipal district, LGDs and the like?

Am I correct? MR. GOURLAV: That's correct. MR. CHAIRMAN: 3.(d) - the Memb er for St. George. MR. URUSKI : Mr. Chairman, the Urban Transit Grants; could the Minister give us the breakdown for Brandon and Flin Flan? MR. GOU RLAY: Mr. Chairman, the 1981- 82 estimated transit grant to Brandon amounts to $372,2 40; Thom pson is $71 ,2 81; Flin Flan, $48,652.00. MR. URUSKI: Mr. Chairman, is there a formula that the municipalities apply, since the grant is roughly about a 10 percent increase over the budget of last year - it's maybe slightly less, Mr. Chairman?

Is this part of a formula on actual operating, or how is the final grant arrived at, or is that a fairly arbitrary figure? MR. GOURLAY: Mr. Chairman, the grant is arrived at - 50 percent of the operating deficit, with the limit usually in an inflatio nary level, which may amount to, I think, in the current year it's something like 12 to 13 percent.

Monday, 27 April, 1981 MR. "R USKI : Mr. Chairman , although the inflation ary level may be 12 or 13, the actual increase in dol lar amount - or is this amount flexible, because a portion of it is recoverable from Canada, of $1 28,000 - is that the global figure that is involved, or is there some flexibility within an additional $1 28,500 or is the $680,000 the figure that includes the $12 8.5 from Canada? lt is shown Recoverable from Canada of $1 28,5 00.00.

Is that $1 28,500 included in the $680,000 or does that give your department some flexibility in determining the final grant that is paid to those transit systems? MR. GOURLAY: The $1 28,500 is recovered under the UT A P agreement and is not reflected in this amount shown here. MR. CHA IRMAN: 3.(d) - The Memb er for St. George. MR. URUSKI: Well, Mr. Chairman, while it is covered under the UTAP, when the Minister says it's not in this, what would the figure be shown as? Would that not show you a net reduction at the end of the year, of this item, by $1 28,500.00?

Would that figure not be involved in the $680,000 figure? MR. GOURLAY: Mr. Chairman, I'll just correct that. That amount of money is included in those levels but it takes into account the Handy Transit and bus purchases for the City of Brandon. MR. CHAIRMAN: 3.(d) - pass.

Be it resolved that there be granted to Her Majesty a sum not exceeding $1 7,28 2,200 ·tor Mu nicipal Affairs - pass. MR. URUSKI: Mr. Chairman, before we can leave this item I'd like for the Minister to get from his staff. We didn't ask him any of the staffing, he can give us a global figure of what staff there are in the department; whether there's any change, it doesn't have to be today; and how many positions are full and which are vacant, in terms of the complement in the department, Mr. Chairman. MR. GOURLA Y: Mr. Chairman, with respect to the staff ing, there has been no change in the total amount of SMYs.

There has been some adjustments within the different branches but the net result has remained constant. The number of vacancies relate basically to the normal changeover situation. MR. URUSKI: Mr. Chairman, but you see when one examines the brochure put out by the Civil Service Commission indicating people in place as a statistic one finds it very difficult, in terms of trying to get the picture department by department, because while the SMY total is one thing, filled positions is totally another and the two don't necessarily jive, Mr.

Chairman, and that's what makes it quite difficult in terms of determining the statistics put out by the Civic Service Commission. If the Minister can give us the figure of how many SM Ys there are within the department and whether there is five, six positions that are - I know normally there is usually about - when we in government about a 10 percent vacancy rate - pretty well all the time that's what is happening. But the fact of the matter is you have X-number of positions and you have an indication as to how many vacancies there are running constantly.

Because of the way the Civic Service Commission now is putting out statistics is very hard to determ ine actually how many people are in place, in terms of actual numbers. MR. GOURLAY: Mr. Chairman, we have 287.3 1 SMYs. We can get you the actual vacancy situation at the next sitting of this Committee, somewhere less than 10 percent. MR. CH AIRMAN: Agreed Commit tee rise? Comm ittee rise. SUPPL V - EDUCATION MR. CHAIRMAN, Abe Kovnats (Radisson): This committee will come to order. I would direct the honourable members' attention to page 51 of the Main Estimates, Department of Education.

Resolution No. 55, Clause 6, Universities Grants Commission, (

a) Salaries - the Honourable Memb er for Elmwood. MR. RUSSELL DOERN: Mr. Speaker, I wanted to discuss with the Minister the brief of the Faculty Association, which was presented to him on February 26th, because it contains three major points of concern, one of which was raised by the Honourable Member for Fort Rouge, concerning open meetings of the Universities Grants Commisssion. The other two concerning the possible drop in federal funding and secondly, the problem with what they call the stop-and-go approach to budgeting. I thought incidentally that we had gotten over that years ago.

I recall discussions some 15, 20 years ago about the need for long-term funding and budgeting as opposed to annual reports and so on and I remember the old quote given at that particular time was about a group of professors going down to see the Honourable D. L. Campbell at one time and the apparent reaction they got was that there could a raise, or there could be increased funding for the univiersities if the crops were good. I assume that we are well beyond that in terms of thinking and planning. So, Mr. Chairman, just to start out, I want to deal with the

section of this brief which talks about the future of The Established Programs Financing Act and the concern of the academics about promised changes to The Established Programs Funding Act of 1977, by which $10 billion of federal monies are disseminated and their concern is that if there's a new approach and possible withdrawal of federal support, tha t this could dr astically affect the Provincial Government's ability to support post­ secondary educational system and a couple of points that they make here are first, they said that this province is currently among the least wealthy in Canada and perhaps needs federal support for a number of its vital social programs, more than most, and secondly, a number of recent studies show that the province is a major net gainer of our post educational system.

Even financially, Ma nitoba's population seems, these studies indicate, to use their post-educational institutions at a higher utilization rate and finally they 3062

Monday, 27 April, 1981 say, that the provincialization of higher education is sure to be accentuated should federal funding drop significantly and again, a couple of comments and then some questions for the Minister. They then say tha t pr ovincialia tion of higher education is sure to mean, (

a) an increase in existing inequities in education in different parts of Canada, inequities that we regard as inherently devisive and unhealthy, and (

b) neglective educational goals and responsibilities that are necessary to the country as a whole. So, three questions that are listed, I wonder whether the Minister would be so kind as to answer these. I'd like to just read them and ask him to answer them one at a time. The professors ask first of all, will the province systema tically oppo se any reduction of Federal funding in this sector. I'd ask the Minister if he would comment on that. HON. KEITH A. COSENS (Gimli): Mr.

Chairman, in answer to the Mem ber for Elmwood on the EPF aspect, that was mentioned in that particular brief, in January of this year the Council of Ministers of Education Canada me t in Frederi ct on, New Brunswick, and this was one of the topics that we discussed at some length at that particular meeting. lt was decided that this whole area of EPF will be negotiated by the Ministers of Finance of each particular province, with input and consultation from Ministers of Education and Ministers of Health and Community Services, who are also affected in this particular area.

We have a concern as well as the people at the universities, Mr. Chairman. The federal support to post-secondary education is important. I think there's a consensus in this country that post-secondary education is something that is not just provincial, certainly young people who gradua te from our universities in post-secondary institutions, move from one province to another. We lose some, we gain some.

If there are not great barriers to movement between province, thank heavens, and we feel that there is some respo nsibility for some federal participation in the supp ort of post-se cond ary education, as there has been for some time. I'm informed by the Minister of Finance that there is no inclination on the part of the Federal Government at this time to sit down to discuss this particular topic and the Minister of Finance feels that it may well be July before a meeting is convened of Financ e Ministers from the provinces with the Federal Government to discuss this very important topic.

Certainly it is a concern, Mr. Chairman, that we share with the university people and, in fact, not just the university people but the people involved in post-secondary education in this province. I might mention to the honourable member that there have been some wild and wierd figures thrown around on this particular topic. I picked up an

article from an eastern newspaper that said that Manitoba was receiving so much mo ney from the Federal Government that in fact we were only putting in something like 15 percent, I believe, of the costs of post-secondary education. That's absolute nonsense, Mr. Chairman. In 19 80, we com puted our approximate cost in post-secondary education and they were in the area - again, I'm using approximations - of something like, I believe it was $17 8 million, in round figures, Mr. Chairman.

Of that $1 78 million or $177 million for post-secondary education, the cash trans fer from the Federal Government amounted to some $80 million. Now, how anyone can look at $17 8 million or $17 7 million and compare it with $80 million and say that the province is only pro viding 15 percent of post­ secondary costs is beyond me, Mr. Chairman. That is very mode rn ma the matics if they are able to compute that type of sharing from the two figures that I have. So in fact, the percentages that they claim are vastly distorted.

No netheless, they have been contributing some $80 million in the last year towards post-secondary education. We must remember that post-secondary education is not just university ed ucati on. 1t involves the commu nity colleges and various other aspects of the post­ secondary scene. I wanted to point that out to the honourable member. Certainly in the negotiations that will be carried on between the Minister of Finance from this province and the Federal Government, our concern in any lessening of financial support will be well expressed and it is our position that we would expect to see that maintained.

If it isn't, Mr. Chairman, then it puts the province in a very difficult position. We would then be short some $80 million in our provincial revenues and in speaking to the representatives of the Faculty Association, who have asked me what would happen if the Federal Government in fact does withdraw from this particular funding, I said, I can give you no assurance of what the province would be able to do. I merely give you this assurance, that our government would do everything in its power to preserve our universities as viable units in this province.

We recognize their importance and their contribution and it would then become strictly a provincial responsibility to make sure that they are ma intained , but in saying tha t, Mr. Chairman, realizing full well that it would place a great strain on the Provincial Treasury and in turn on the taxpayers of this province. lt would be an additioal load that has been handed on to them from the Federal Government. That is our basic position at this time, Mr. Chairman.

Certainly I gave my assurance to the people from the universities that as a Provincial Govern ment, we were not going to see our universities destroyed by a lack of federal funding, but it would certainly create a tremendous stress on the provincial Budget, if in fact we had to pick up that money that has traditionally been provided by the Federal Treasury. That is our position at this time, Mr.

Chairman, and as I say, I've been discussing the matter with the Minister of Finance and consulting with him and I'm very concerned about the negotiations that will be taking place on this matter, because they do have great implications for the fiscal position of the province, if in fact the Federal Government were to decide to withd raw from their sup port of post­ secondary education. MR. CHAIRMAN: The Ho nourable Memb er for Elmwood. MR. DOERN: Two follow-up questi ons, Mr . Chairman, and this is a more technical one.

What is the provincial position on the present ratio of federal cash contributions to tax points under the Act? 3063

Monday, 27 April, 1981 MR. GPSENS: I suppose the Minister of Finance could answer that question much better than I can, Mr. Chairman, because those tax points flow directly into the Provincial Treasury. I haven't heard his particular position expressed as to the tax points. it's something that the honourable member may well wish to ask the Minister of Fina nce on some occag;jon. The tax points are something that is derived from provincial property or income taxes.

Really, it's like saying to us that we may keep something that is already our own, so I suppose the Federal Government could be magnanimous at any time and say, you could keep another three tax points if you wanted to. Really all they're saying is that we can keep what is already a provincial tax and which we are already levying from the people of this province. I don't take that into consideration as a gift from the Federal Government at all, Mr. Chairman, it is already a provincial tax. lt alr eady flows to our coffers, provincial coffers.

The cash transfer, however, is a straight transfer from the Federal Government. MR. DOERN: Mr. Chairman, I'm afraid to put that question to the Minister of Finance because the last time he got going he went for an hour-and-a-half on the 1977 election. That was during the Budge t Speech and I'm afraid to ask him any questions because he'll start refighting that election campaign. Mr.

Chairman, my fina l question here to the Minister, again from the brief is: Does the province have any contingency plans for alternate financing of the post-se condar y educational system should federal funding under The Established Programs Financing Act drop considerably; the basic question is, do you have any contingency plans in the event of a sharp drop? MR. CHAIRMAN: The Honourable Minister. MR. COSENS: Mr. Chairman, we haven't accepted to this point that is going to happen and that is a bridge that we will cross when we come to it.

Certainly there are negotiations that will be carried out this summer by the Ministers of Finance; after those initial negotiations, we'll have a better indication of what will be happening in that particular circumstance and at that time we'll make decisions in that regard. MR. DOERN: Mr. Chairman, I'd just like to ask the Minister then, at these meetings of Ministers of Educa tion, are the pr ovinces all on the same wavelength on this particular matter or do we see some differences?

For example, Quebec; do they have a different approach about this question than the other provinces or are all provinces lined up together? MR. COSENS: Yes. Mr. Chairman, I think you could say that, that it was a unanimous feeling among the provinces in regard to the federal responsibility in post-secondary education. MR. DOERN: it's too bad, Mr. Chairman, we didn't have that kind of agreement on the Constitution.

I then would ask the Minister about their approach to budgeting and again the academic staff is I think a little nervous about what they call a stop-and-go 3064 approach by the present Provincial Government. They point out that it's easy to stop a program, you can do that overnight, but it's much harder it seems to initiate a new program or develop a new thrust. lt seems to take years to get all the requisite approvals and establishments, but overnight the Minister can tight en things and the Un iversities Gr ants Comm ission can do SQ11Je dama ge.

So the academics talk about their bi!! fflement, is the word they use, about long-term gqvernment policy, and of course I'm not just speaking to the Minister here about this year.

The Minister is continuo usly reminding us about the terrific advances he's made this year and we recognize that there has been an improvement, but in the past three-and-one-half years, I think the Minister's case becomes much weaker and I quote again a couple of sections from the brief; first, "There appears at the present time to be no significant planning effort, either by the Ministry of Education or by the Universities Grants Comm ission"; that's the first one, no significant planning. Secondly, they talk about "the ad hoc nature of decisions".

So all I'm saying to the Minister is that the academics have tried to make the point - and 1 know very well, Mr. Chairman, that this has gone on for decades. I mean I know that this was being talked about in the early Sixties when I was a student and a teacher and it's a continuing concern on the pa rt of people at the universities, the administrators in particular, but all the staff as to whether they can plan for a three or a five-year term. it's not good enough to live from hand to mouth or from year to year.

So I simply say to the Minister, it seems that there's been some slippage in that regard and I wonder whether he can give us an assurance that he will attempt to make some improvements so that it's not sort of a feast this year and then famine the next. Does he have any comments about long-range planning vs short-term political expediency. MR. COSENS: Well, Mr.

Chairman, I'd suggest to the honourable member that he is overstating the situation most certainly and would only point to the staffing changes that have taken place over the last four years in our univerity system to bear out my particular point; that the particular levels of funding that have pertained cert ainly have not affected qua lity of staff or quantity for that matter, Mr. Chairman.

I would repeat figures that I believe I mentioned earlier during the budget debate, that four years ago, 19 76-77 the acad emic staff in our universities numbered some 1,493 people; in 1979-80 that academic staff numbered some 1,561 people, an increase, Mr. Chairman, of 68 more people in the academic staff at a time when university enrolments are certainly not increasing but, in fact, over the four-year period had decreased by a total of some 2,700 students, both part-time and full-time. And perhaps even more significant, Mr.

Chairman, if the Mem ber for Elmwood is going to maintain that quality has suffered, and that's a favorite theme I know of some gentlemen in the Opposition, then I point out to him that in 1976-77, in the academic staffing in universities of this province at the full professor level we had some 344 people; and in 1979-80 we had some 43 1 full professors or a total of 87 more than we had in 1976-77.

Monday, 27 April, 1981 Mr. Chairman, that hardly points out to me that the universities have had to cut tremendous numbers of staff, for instance, not if we look at the actual figures. Where are the cuts in staff; where are the cuts in qual ity, Mr. Chairman? Wher e has the university program suffered from this so-called stop­ and-go funding that the honourable member refers to? Where has it not been inadequate, if it has been able to provide, Mr. Chairman, an additio nal 68 people over the four years at the time when the student population was declining and not only 68 more people, Mr.

Chairman, but provide 87 more professors, in other words, the most qualified people on the academic staff? I find that rather inconsistent with the position taken by some honourable gentlemen opposite. So I merely point that out to the honourable member because I know that he at times has tried to espouse this view that, oh, the fundin g for the university is not adequate and as a result they have had to cut this and they have had to cut that, which would imply that they were cutting staff mem bers, Mr. Chairman, and that very drastic things were happening.

I merely point out the actual figures and say in truth that isn't what took place. Now, the Member for Elmwood says, well, the people at the universities are concerned about long­ range government planning in regard to university funding and -(I nterjection)- yes, he says, that this government - he is fair enough, Mr. Chairman, when he states that very few governments have shown any long-range planning as far as universities are concerned. I suppose this government has been as guilty of that as any because it's very difficult in this day and age, Mr.

Chairman, to plan four, five or six years ahead, to know what the manpower needs and what the financial status of a particular province will be that many years in the future. Certainly there has been an operation from year to year that has pertained. lt must create some uncertainty on the part of the universities but I would maintain, Mr. Chairman, that we have been able to provide funding tha t enabl es the universities to maintain their programs, perhaps never at the level that they would like to see. In fact, Mr.

Chairman, I talked to a former president of one of our universities in Manitoba and I said to him, in all of your years, in all of your tenure as president of the University of Manitoba, did you ever feel that the government funded you adequately and he said, no, no university president ever feels that a government has funded them adequately. But he said some years were better than others. So I'm not sure what the word adeq uate implies, Mr.

Chairman, but I would suggest that if the funding enables our universities to expand their staff at a time when the student population has been declining, that it has not been treating them too harshly and in spite of the fact that at some points we hear of a certain cut in programs in this area or in another, then that is something that has always pertained, Mr. Chairman. Certainly there are certain programs cut from the university curriculum but at the same time we don't hear about others that are added. lt is always the negative aspect that is emphasized, not the positive. This seems to pert ain, Mr .

Chairman, and I suppose it always will, in attempting to more or less maintain a particular position and to impress that one would like more funding, it is probably fair game to try to put forward the strongest argument but I still maintain, Mr. Chairman, that our funding has maintained programs; it has maintained quality. I would suggest, on the basis of the academic staff, the people who do the teaching and who lead the research at the university, that it has been enhanced.

Now, when the honourable member talks about long-distance planning, I can tell him that at this point I am giving very serious consideration to setting in place a task force on university planning for this decade and I am sorry that that has not crystallized to the point that I can announce that it will be in place by a particular date, but I am looking very seriously at the establishment of such a task force because I think it can point out areas of concern and make recommendations that will be worthwhile to the government in planning ahead and to the gover nment in its rela tionship with the universities. MR.

DOERN: Mr. Chairman, the Minister is having trouble with certain words. This afternoon he had trouble with "enough" and tonight he's having trouble with "adequate." I just want to mention to him that in both cases that means neither too little nor too much, just so he has a feel for that. 1 also want to tell him that he is saying - you know, the Minister is very good at answ ering questions. He ans wers very forcefu lly but he always selects the question that he wants to answer, which is not necessarily the question that I asked. I want to remind him that there is more than academic staff involved here.

There is academic staff; there is non­ academic staff. There is capital , ma intenanc e , ope rati ons, equipment, supplies, all of these com ponents and I don't know, out of the total budget, what percentage is salaries. I am sure it is substantial but all of these other factors are very important as well. I also have to say to him that as an opposition spokesman, it is not my job to applaud the Minister; it's my job to prod the Minister and to attempt to encourage him to higher levels of accomplishment or show him where perhaps there are some failures of government policy. Mr.

Chairman, I wanted to deal just briefly with research. I don't want to get into what might be called science policy. I have a cousin of mine who is an expert in that field of federal science policy at Carleton University. I just wanted to ask a few questions ther e. Ap pa rently there are some substantial research grants that are obtained by the University of Manitoba, in particular, but I am told that one of the problems is this, that funds are attained or are sought but that often, to meet the requirements for the funds, one has to have new equipment and new staff.

So let's say that you wanted, as I understand this problem, let's say you wanted to get $50,000 for a particular project, it may be a requirement of obtaining that funding that you either have to spend of your own money, or from the grant, certain X thousands of dollars to meet those requirements and at the same time to have a certain amount of staff. If I can recall, and I am now trying to think back a couple of months, if I recall, the problem appeared to be that the university was not able to access certain grants and research grants, 3065

Monday, 27 April, 1981 etc., that they would like to because of the fact that they don't have the equipment or don't have the money or don't have the staff to be able to take advantage of this and I have to think of the fact that this is, I think, an old problem in Manitoba, the que stion of whether we want to have a lot of research or a little research or no research in our province. I recall a few years ago we lost a very talented doctor - I think it was a relative of the Honourable Member for St.

Johns, I believe he was a Cherniack - who had to go elsewhere because he couldn't get the kind of funding necessary. In some cases it's expensive and I know that we can't specialize in everything; I know we can't set up all kinds of fancy labs and so on and compete with great big American universities and unlimited space programs out of Houston and so on.

I think of one particular friend of mine I went to university with, probably the brightest star that I ever ran into; he was a student in the north end, the old Go vernor General 's medal and went on to gold metals in medicine and then got his degrees and went to the Rockefeller Institute in New York City and is now a doctor in Mo ntreal, specializing in internal medicine, who would love to be in Winnipeg, who would love to be in Manitoba if he could do research and set up a small practice on the outside to keep involved in his profession, but basically as a researcher. lt apparently came down to a small amount of funding, that the equipment was more or less comparable to what he could get in Eastern Canada but he couldn't get the amount or number of rabbits that he required for his experiments.

He was in the field of - and I'm very reluctant to even talk in this area because I don't know much about science - but he was dealing with mitochondria and things about the blood, etc. that was his area and for thos e experiments he needed hundr eds and hundreds of rabbits. They would do certain things to the rabbits and then, gruesome as it may seem, chop them up, cut their hearts out, spin them into some sort of a fluid, etc. and they would do this type of research and the problem was the equipment and, of cour se, the pro blem was the supply of experimental animals.

So I simply say to the Minister, I ask him whether he is aware of the apparent inability or problem, on the part of people in medicine in Manitoba or on the various campuses in Manitoba, who find it difficult to access available research grants. Now I ask the Minister whether he is familiar with that problem or whether this is news to him and if he has any encouraging words in that regard. MR. COSENS: Well, Mr.

Chairman, let me just say initially that certainly the University of Manitoba has been the foremost research institution in Western Canada for some years and I'm pleased to see it maintaining that position in spite of the great number of dollars that exist in the province of Albert, and no doubt it's due to the very fine reputation and the very capable people tha t are on staff at tha t institution. I can remember some four years ago I believe the total amount of research funding received was in the neighbourhood of $14 million, I think that was four years ago, Mr.

Chairman, when we were going through these Estimates. Today, as of 1979-80 the funding was something in the area of $27 million and most of this, Mr. Chairman, derives from the Federal Govern ment, who has been the main !under of research in Canada, across the provinces. As well, Mr. Chairman, I point out an area of research funding that is not often mentioned. The Provincial Government, through the Department of Economic Development, provides particular research funding to the Faculty of Engineering, I believe it's some $2 million over three years. This is something that has not been in place before.

The Faculty of Agricult ure receives research funding from the Department of Agriculture of this province and, to a lesser extent, I believe Mines and Natural Resources provide some research funding to the universities. As the honour able member has st ated , Mr . Chairman, there is always a need for more research money. I suppose until we have solved all of the diseases that kill and maim in our society we can say that there isn't enough research money; until we have solved some of the other problems that exist in our society we can say that not enough money is being spent on research.

But I point out to the honourable member that the Provincial Government makes the type of contribution that I mentioned earlier; the Federal Government has been, and traditionally, the main supporter of research work in our universities and will remain in that capacity. I'm really saying, Mr.

Chairman, that as a province it is certainly our obligation to help maintain the quality of the instructional staff, the academics at our university, because it is on the strength of their reputation and their experience that research funds are attracted to a particular university; they are the reason that it is singled out to receive research funding. I point out, once again, that in that regard the University of Manitoba has maintained a very prominent position. MR. DOERN: Mr. Chairman, I'd also like to ask the Minister if he has any comments about research into the field of energy on campus.

I just heard today, or the other day, criticism of the Provincial Government and the province as a whole for not being sufficiently interested in alternative forms of energy vis-a-vis gas and oil. I just wondered if the Minister had any comments about any new programs or funding in that regard and, similarly, one would assume that Manitoba and the universities would be a leader in research into hydro-electric power in terms of transmission and development and all the areas associated with that because of our natural interest and power base. So I'd just ask the Minister if he has any anno uncements or