LEGISLATIVE ASSEMBLY OF MANITOBA Monday, 9 June, 1980 Time - 2:00 p.m. OPENING PRAYER by Mr. Speaker. MR. SPEAKER, Hon. Harry E. Graham (Bir tle­ Russell): Presenting Petitions . . . Reading and Rece iving Pe titions ... Pres enting Reports by Standing and Special Committees . Ministerial Statements and Tabling of Reports ... Notices of Motion . . . Introduction of Bills. INTRODUCTION OF GUESTS Before we proceed with Oral Questions, I should like to at this time introduce 30 visitors from the Red River Community College, under the direction of Denis Pankiw.

These students are here, compliments of the Honourable Minister of Fitness and Amateur Sport. On behalf of all the honourable members, we welcome you here this afternoon. ORAL QUESTIONS MR. SPEAKER: The Honourable Leader of the Opposition. MR. HOWARD PAWLEY (Selkirk): Mr. Speaker, my question is to the Minister of Health. Can the Minister of Health report as to whether or not any progress is taking place pertaining to the strike involving health care workers. Can he give us an updated report? HON. L. R. (Bu

d) SHERMAN (Fort Garry): I bel ieve progress is taking place, Mr. Speaker. The Manitoba health organizations and the conciliation officer and the CUPE are meeting today. I have no report on those discussions as yet, but I am hopeful, as I am sure all members of the House are. There has been considerable work done on all sides and among all parties concerned during the weekend, although formal talks at the table did not take place during the weekend.

At the present time, of the 43 facilities outside of Winnipeg affected by the strike, 18 have now seen their CUPE workers go back to work; 18 are not supporting the strike. That figure has risen gradually on an almost daily basis, Mr. Speaker. It was 14 on Friday, 16 on Saturday, and 18 today. The situation in the city of Winnipeg remains tight and remains difficult, but the medical ch iefs of staff at the various hospitals continue to report to me that they are able to take care of emergency and urgent cases. There is no question, however, Mr.

Speaker, that all of us who have had concern, have concern that now continues to mount with each passing day and we remain hopeful that the very strenuous efforts that are being made at this time will produce a solution and an early solution this week. MR. PAWLEY: Mr. Speaker, a supplementary then to the Minister of Labour.

In view of the fact that the negotiations involving the Health Sciences Centre have broken off and negotiations are now under way involving the Manitoba Health Organization and CUPE, and the issues I under stand are quite different involving the Mental Health Organization and those empl oyees that are involved in the negotiations with the Health Sciences Centre, can the Minister advise whether or not it would not be reasonable on the part of himself as Minister of Labour in order to ensur e tha t the negotia tions continue together involving if necessary two different conciliators so that progress can be made, both in the rural front and the front involving the Health Sciences Centre, towards some eventual resolution of the present work stoppage?

MR. SPEAKER: The Ho nour able Min ister of Labour. HON. KEN MacMASTER (Thompson): Thank you, Mr. Speaker. It's not a bad question, except there is another set of circumstances that the Leader of the Opposition may or may not be aware of. The key people within the CUPE organization, the same ones that are really involved in both sets of circumstances, if in fact . . . I mentioned in the House last week that certainly it was obvious to all that were watching that there was a sort of a strategy and pressure at the Health Sciences Centre. That seems to now have converted itself over to the MHO group. Mr.

Kostyra himself is a key factor in both sets. You know, there are two different groups granted and I think I would prefer to leave that to the actors themselves in this particular scenario. Where the y are going, who knows? MHO, CUPE conciliators may decide today, jointly, individually, that it's the Health Science Centre tomorrow. I prefer to keep myself out of that and let them strategize in their own way. I really think all the key people are very qualified to establish the process which they want to follow. MR. PAWLEY: A further sup plementar y to the Minister of Labour.

Could the Minister of Labour advise whether or not to ensure that its options remain open in the event of simultaneous negotiations involving both rural and urban workers, whether or not he is prepared to make available in that type of case a second conciliator beyond the one which is presently performing duties? MR. MacMASTER: Mr. Speaker, I think that the CUPE organization, the Manitoba Health Centre, the MHO and for the sake of the members opposite and anybody else who wants to hear, there just is very little that our department would not do in assistance.

I know of nothing that we wouldn't do to help facilitate all the parties involved in this particular situation. So the answer to the question is that the Department of Labour in its entirety is prepared to assist parties in whatever way is deemed mutually agreeable and necessary by all parties concerned. MR. SPEAK ER: The Honour able Memb er for Transcona. 4487

Monday, 9 June, 1980 MR. WILSON PARASIUK: This is to the Minister of Labour, In view of his answer just now, I was wondering if he would look at the precedent est ablis hed in 19 76 when the th en Minister of Labour, Russ Paulley, called in the board of the Health Sciences Centre, called in the union, had them sit down informally in his office, discuss the positions outstanding between them, and that led directly to .a very quick settlement through collective bargaining. But the Minister was creative at that time and we were able to bring about a settlement.

I'm asking if the Minister would look into that particular precedent, which I'm sure departmental officials within his department know about it. MR. MacMASTER: Mr. Speaker, I have a great deal of personal admiration for who was the Minister of Labour at that particular time. I suppose I knew him personally as long as most of the members opposite, some of them maybe longer, and I would susp ect that what the Minister of Labour did at that particular time, without knowing or without talking to him, at that point he knew something that suggested to him that that was the precise thing to do at that time. Mr.

Speaker, there is absolutely no written formula on earth that tells you when you must do something in this particular world that we're talking about here in negotiat ing. There are different sets of circumstaces. It might be interesting for me to talk to Mr. Paulley about why, what triggered him to do that particular thing at that time, because I'm sure he sat by and watched things happen and didn't move on other sets of circu mstances. In his own go od judgement, he felt it wasn't necessary. I'm aware of what he did at that time, and I'm aware that there was the conclusion that was reached at that time. MR.

SPEAKER: The Ho nourable Memb er for Transcona. MR. PARASIUK: Yes. I'd like to inform the Minister that I have taken the initiative to in fact talk to Mr. Paulle y about these particular issues . . MR. SPEAKER: Order. Order please. MR. PARASIUK: I'd like to ask the Minister, since he wished that he might, or he speculated about doing it, I would like to ask the Minister if he has contacted Mr. Paulley; if he intends to contact Mr.

Paulley to look at that particular precedent; and in particular, is he prepared to appoint an industrial enquiry commission under The Labour Relations Act, which he can do, to try and provide some means of in fact aiding the collective bargaining process so that we can in fact have a settlement, rather than having this continued impasse where the Minister seems not to be on top of what's going on. MR. MacMASTER: Mr. Speaker, I respectfully suggest to you and to the Member for Transcona that it's not his place to suggest positions of strategy for either side in this particular set of negotiations.

I don't have any intention at this time of setting up an industrial enquiry into this particular incident. MR. SPEAKER: The Ho nourable Member for Transcona with a final supplementary. MR. PARASIUK: Yes, Mr. Speaker. I don't really want to debate whether in fact members on this side have any role to play in prov iding construct ive suggestions with respect to this impa sse which has continued now for 14 days.

I'd like to ask the Minister if he has anything specific at all to put forward to aid the collective bargaining process which has in fact broken down right now at the Health Sciences Centre and does not seem to be prog ressing very well with the Ma nitoba Health Organi zation. Does he have anything specific concrete to propose, or is he just going to sit and monitor a situation that's been here for 14 days now? MR. MacMASTER: Mr. Speaker, the Member for Transcona makes reference to the fact that he's making constructive suggestions.

That might not be considered the case by either CUPE or the other organization that's involved in these negotiations. So I'm not prepared to accept his suggestion as being constructive. It's a thought that he has and he's posed before and certainly there's nothing wrong with that - it's an opinion. Again, the Manitoba Health Organization and CUPE are meeting, I believe right now, Mr. Speaker, and I wish them the very best in their deliberations. MR. SPEAKER: The Ho nourable Member for Elmwood. MR. RUSSELL DOERN: Mr. Speaker, I'd like to direct a question to the Minister of Health.

Given the apparent inability of some medical doctors and psychiatrists to commit severely depr essed patients into some of our hospitals, has he been made aware that this is a problem? MR. SPEAKER: The Honourable Mini ster of Health. MR. SHER MAN: Yes, Mr . Speaker, most emphatically. We have been in hourly touch, and I use that term factually not rhetorically, with our Chiefs of Psychiatric Services, particularly at the He alth Scie nces Centre, and the other ur ban hospitals in Winnipeg and our mental health centres throughout the province. Psychiatry is a critical area in a situation such as this.

At the present time discussions are taking place under the designa ted essential worker agreement that was invoked at the time the strike at the Health Sciences Centre got under way between HSC Management and the CUPE to determine whether the agreement will permit designation of a number of psychiatric nurses as essential workers who can be brought in to reopen a portion of the psychiatric department at the Health Sciences Centre tomorrow. MR. DOERN: Mr.

Speaker, given the critical state of a severely dep ressed patient and the possibility of suicidal tendencies or suicide itself, is the Minister aware of any unfortunate incidents in that direction that have been caused, in fact, by this situation? 4488

Monday, 9 June, 1980 MR. SHERMAN: Not yet, Mr. Speaker, but the honourable member touches on a sensitive point and one that we are living with round the clock. At the present time there are four psychiatric beds available in Winnip eg; three at St. Bonif ace and one at Grace. Some psychiatric patients have been moved to the Brandon Mental Health Centre. I want to say for the benefit of all of us in the Hous e th at we and Manitobans generally owe a particular vote of thanks and commendation to Dr.

Mike Kovacs, the Chief Executiv e Officer at the Sel kirk Mental Health Centre, for the 24-hour round-the-clock watch that he has maintained on this situation. Up to this point in time I can reassure the Honourable Member for Elmwood that we're holding. MR. SPEAKER: The Honour able Memb er for Elmwood with a final supplementary. MR! DOERN: Mr. Speaker, a final question. Is it then possible for a psychiatrist or a medical doctor today to commit somebody to any of the institutions that are struck? MR. SHERMAN: Yes, Mr. Sp eaker, but th e situation is very tight.

There aren't that many beds available and there aren't that many nurses avai lable, but the answer is yes. MR. SPEAKER: The Honourable Leader of the Opposition. MR. PAWLEY: Mr. Speaker, reverting back to questions to the Minister of Health on the present work stoppage. Can the Minister of Health confirm that grants from the government are made from the Mental Health Services Commi ssion to · the hospitals, based upon a per diem per occupied bed basis? MR. SHERMAN: Yes, Mr. Speaker. MR.

PAWLEY: Could the Minister advise, in view of the present work stoppage and the fact that there are some 600 beds which are not occupied, what would be the amount that the Manitoba Health Services Commission is in fact saving for each day that the strike persists? MR. SPEAKER: Order please. I suggest that's proper information to be filled by an Order for Return. The Honourable Minister of Health. MR. SHERMAN: Mr. Sp eaker, with your permission, I'd like to respond because I don't want the implication to remain on the record. The answer is absolutely not, Mr. Speaker.

There may be an ap parent book keeping saving in terms of the question as the Honourable the Leader of the Opposition has put it at this moment, but I can assur e him th at the Ma nitoba Health Services Commission is making efforts as strenuous as those of the rest of us to resolve this dispute and there will be, becaus e of the ultima te conclusion of the dispute, there will be - and the length of the dispute - considerable additional costs are accruing each day as a consequence of the extra efforts that are being made by a number of persons and the budgets of the hospitals will be assessed and addressed in the light of their normal operations, not in the light of what's happened during enforced bed vacancies.

MR. PAWLEY: Mr. Speaker, further then to the Minister, if the hospitals are indeed losing money as a resu lt of the present work stoppa ge, is the government prepared to finance the deficit that is created as a result of the reduction in payments that will be made from the Health Services Commission to the hospitals? MR. SHERMAN: Mr.

Speaker, all I can do is reassure the Ho nourable the Leader of the Opposition of what I've said earlier, that the hospital budgets will be studied and evaluated individually as the ho spitals come to the He alth Services Commission and the hospitals will not lose money directly as a result of this work stoppage. The whole process of assessing and determining and finalizing the ho spitals' budgets will be developed and concluded now in the light of all the circumstances that have developed as a result of and resulting from the work stoppage. MR.

SPEAKER: The Honourable Leader of the Opposition with a fourth question. MR. PAWLEY: Mr. Speaker, just by way of final supplementary then, would the Minister confirm that by this pra ctice he is inde ed financing the management side of the strike? MR. SHERMAN: Absolutely not, Mr. Speaker, and I am somewhat surprised and in fact I am affected to the point of being somewhat shocked, Mr.

Speaker, th at th e Leader of the Op position would be concentrating and focussing upon a very crass and cynical aspect of the current situation, when what we are concerned with, and the hospitals are concerned with, and the He al th Services Commission is concerned with, is patient life and safety and patient care. That is the only point -(In terject ion)-. MR. SPEAKER: Order please. MR. SHERMAN: That is the only point that matters, Mr. Speaker. That is the only point that matters.

We are concerned at getting the strike over, sett ling the dispute, getting the workers back to work, in the meantime guaranteeing and reinforcing patient care and safety. We're not concerned about the hospital budgets, nor are they. Those will be addressed when the time comes and I suggest that the implication of the Honourable the Leader of the Opposition is not at all honourable, Sir. I think it's cynical, crass, shocking, and I think that a great many Manitobans will be repulsed and repelled by it. MR. SPEAKER: The Honourable Leader of the Opposition with a fifth question. MR. PAWLEY: Mr.

Speaker, then further to the Minister of Healths, in view of the Minister of Health's professed concern, then is the Minister of Health prepared to take some init iative, rather than to lecture the opposition, in order either to lift the present restrictions which have been opp osed budgetary-wise or to enter into negotiations in order 448 9

Monday, 9 June, 1980 to resolve what we recognize on this side of the Chamber to be a serious situation, involving all that are involved in the health field in Manitoba? Is the Minister prepared to practise deed, rather than to lecture members on this side of the House, with some concrete plan of strategy pertaining to the encouragement of a negotiated settlement of the present stoppage. MR. SHERMAN: Mr.

Speaker, it would take me half-an-hour to describe to the Honourable Leader of the Opposition the strategy that has been put in place, that has been invoked since 12 .01 a.m. on the day that the strike began, to ensure the extremely co-ope rative and the extraordinarily efficient network of support, one to another, that exists between different hospitals and health facilities in Manitoba to enable health care and patient life and safety to be guaranteed in these circumstances.

At the same time I want to assure my honourable friend that my colleagues and I have made strenuous, vigorous and unrelenting efforts in the past 13 and-a-half days to find a solution to this dispute, shor t of a solution that I think is not the first choice, either of everyone in this House or of every Manitoban. We had hoped tha t it could be solved through the coll ective bargaining process. We still hope such, Mr. Speaker, but time is running out. MR. SPEAKER: The Honourable Member for St. George. MR. BILLIE URUSKI: Thank you, Mr. Speaker. I have a question for the Minister of Agriculture.

I wonder if he could, Sir, give us a report on the drought situation in the province and what actions he and his department have taken to date and how he views the situation at the present time. MR. SPEAK ER: The Ho nourable Min ister of Agriculture. HON. JAMES E. DOWNEY (Arthur): Mr. Speaker, the drought situation throughout the province is still very serious as far as the livestock producers and the grain producers are concerned, particularly those people who would normally be in the process of, at this particular time, cutting or being prepared to cut feed reserves for the coming months, for next winter.

I would say that a lot of the later-seeded grain crops tha t have germina ted are still in a fairly safe condition, tha t they are not suffering at this particular time. However, earl ier-seeded crops are in desperate need of rain and in fact the rye crops in a lot of the province are now past the stage of being able to be helped by any amount of rainfall at all. But again, we are continuing on with the program of freight assistance to move feed in. We still have and are continuing to purchase alfalfa hays in Ontario and it's being trucked in.

We're negotiating with the railroads to make available railcars or the kind of equipment that would facilitate the movement of this hay out of Ontario. At this particular time we have not reached an agreement on what price would be charged for that kind of a service, but we are negotiating with them.

There appears to be an adequate supply of screening pellets that have been bought By Ule livestock producers for beef herds, but the more critical, as I said earlier, the more critical need for feed is probably the dairy industry which need alfalfa hays to get production out of their livestock or out of their cows and it's continuing to be serious and we are looking at what alternatives we may be able to introduce to further alleviate some of the problems. But, as I've indicated, it continues to be serious. MR. URUSKI: Thank you, Mr. Speaker.

Could I ask the Min ister - he's indicated that department personnel have purchased hay in Ontario. How much supply, a rough estimate that the Minister has it, has been purch ased for del ivery into Manitoba. And as well, the Minister during estimates indicated that they were in the process of purchasing screen ings at Thumder Bay. How much of those purchases have been made and have been brought into the province?

I'd also like to ask the Minister as to whether there's consideration being given to allow some assistance in terms for the purchase of feed, seeing as the cost of hay, I'm told, to be brought into Manitoba farms is something in the order of 2.65 for a 50-pound bale, whether the government is considering any assistance in terms of the actual feed costs? MR. DOWNEY: Mr. Speaker, on the quantity of hay that's available in Ontario, it's been ihdicated to me that there seems like sufficient supplies to meet the needs.

Again, when he refers to the cost of that hay as somewhat prohibitive of a lot of producers buying it to be of good economic sense, that in fact I don't think we will see that happen. But again, I want to say that on quantities or numbers that have been bought, I can get those figures. We're also in the process of trying to get some new crop alfalfa which is of far ,more value to the dairy industry than is last year's hay that has been carried over. However, there is a good supply of carry-over hay from last year plus the new crop is starting to come off.

As far as the programs of actually purchasing feed, we purchased an initial 1, 000 tons of scre ening pellets to assist the livestock producers in an initial way. Following on tha t we've had the private companies, Manitoba Pool Elevators, United Grain Growers and other people who normally would be exporting those pellets to foreign countries, have been moving them back and selling them to the farmers. We have actually not been involved in the buying and sel ling of the pellets as there was indication tha t the private sector, through the elevator companies, could handle it.

The feed trade assistance applies to the feed they buy from those elevator companies as well as the other types of feed tha t we were moving in. So there is a Feed Assistance or a Freight Assistance, I should say, on that. As far as a further policy or program to assist in the purchase of that particular feeds that they're buying, that's something that we are monitoring and as the season continues, if we don't receive rain then it will have to be addressed because of the fact that people are going to have to feed for a lot longer period than they normally would have to because of the drought conditions. 4490

Monday, 9 June, 1980 MR. SPEAKER: The Honourable Member for St. George with a final supplementary. MR. URUS KI: Thank you, Mr. Speaker.

I asked the Mini ster whether or not he has ma de any announc ement or is he prep ared to make any announcement with respect to the use of pastures by utilizing some of the Crown lands that may be now used for hay permits, that they can be used for grazing, or whether or not Wildli fe Management areas are being considered to be used, as we know now that community pastures are almo st to the point where cattle may have to be moved back in some areas, moved away from the community pastures, as they are being fully utilized, because it will take time to either fence the properties, the Crown lands, or is the Minister considering the use of herdsmen in terms of allowing the cattle to roam freely and to be herded around if the need so arises, Mr.

Speaker? MR. DOWNEY: Mr. Sp eaker, the question on Crown lands and Wildlife Management areas, we will in fact, be making an announc ement on the availabili ty. We are going to make some of them available to the agriculture community, where they can best serve the needs of th e farmers. It's unfortunate that when the land was bo ught for Wildlife Management, some of those farms that were bought by the last government, the fencing was removed. I guess that was to prohibit any further use by the agriculture community. It's unfortuna te that ·that took place.

So they really aren't as readily available as they may have been if those fences had of been left in place, to restrict the livestock on thos e particular properties.

I would like to say we are making some of them available and it's a matter of being able to manage tho se cattle and as he has indicated, just to move the cattle into one of those areas could, down the road if we don't receive moisture, you'd have the cattle in a different place with the same problem of feed supplies not being available to tho se cattle, which I'm sure will happen in community pastures, and the cattle may possibly have to be supplemented with additional feed supplies after being moved to those locations. MR. SPEAKER: The Ho nourable Memb er for Churchill. MR. JAY COWAN: Mr.

Speaker, my question is to the Minister of Labour and I'd ask the Minister, following up on questioning earlier in the question period, if he would be prepared now to commit either himself or his department to contact ing representatives of both management and the unions involved in the current health dispute to determine if they believe if his department can play a role in bringing the parties together on an informal basis, perhaps as a suggestion for talks in his office, and the reby not be com ing formally inv olved in negotiations, which is somet hing I know he wants to av oid, but using his good offices to pr ovide mechanisms for in formal advancement of the negotiations, if at all possi ble?

MR. SPEAKER: The question is repetitive. The Ho nourable Mem ber for Chur chill with another question. MR. COWAN: Mr. Speaker, I would think that the question is not repetitive, but perhaps I can rephrase it so as to ... MR. SPEAKER: Order. Order please. The question is repetitive. The Honourable Member for Churchill. MR. COWAN: Yes. I'd like to reph rase the question, Mr.

Speaker, and ask the Minister if he would be prepared to involve his office in an informal way in bringing the parties together for discussions - not for conci liation, which was the question previous, but for informal discussion so as to provide a mechanism for the parties to meet on a less tense basis so that perhaps his office can play a role in bringing the parties together in that informal way. MR. SPEAKER: The question is still repetitive. The Honourable Memb er for Churchill with a final supplementary. MR. COWAN: Mr. Speaker, I appreciate your advice.

I would then ask the Minister of Health, and perhaps try to phrase it in a non-repetit ive way. As he had mentioned earlier in the question period that time is running out, has he called upon the Minister of Labour to develop back-to-work legislation? Is back-to-work legislation now in the process of being drawn up, and by that I mean, the wording of such legislation, or has there been some indication that it has already been drawn up, as the Minister seems to indicate by his concern today, that time is running out and pressure is mounting upon the government? MR. SPEAKER: The Honourable Minister of Health. MR.

SHERMAN: Mr. Speaker, I'm not in a position to comment on that question, but I can assure the Honourable the Member for Churchill that I have certainly called upon the Minister of Labour. We have had many and recent intensive discussions on the entire situation. MR. SPEAKER: The Honourable Member for Wols eley. MR. ROBERT G. WILSON: Yes, Mr. Speaker. I have a question for the Attorney-General.

Would the Minister confirm that the Manitoba Bar Association continues to hold its conventions in the United States, and in the interests of the tourism industry in Manitoba, could the Minister talk to the convention organizers, if the answer is yes, about such places as Hecla Island, Clear Lake and Portage Ia Prairie? MR. SPEAKER: The Honourable Attorney-General. HON. GERALD W.J. MERCIER (Osborne): Mr. Speaker, the answer to the first question is yes; and the second question is, I have. MR.

WILSON: Would the Min ister be able to confirm whether the government supplies technical or financial help to the association in the holding of these conventions and is there any direct financial 4491

Monday, 9 June, 1980 influence that the government could use to attempt to get these conventions held in Canada? MR. MERCIER: Mr. Speaker, there certainly is no financial assistance to the Manitoba Bar Association through my department to hold their annual meeting. I have over the past two years discussed with officers of the association the possibility of holding their annual meeting in the province of Manitoba. There is apparently a problem of finding a facility outside the city of Winnip eg which would accommod ate the number of dele gates and members of their family that attend the annual meeting.

I'm hopeful that in the next few years, an annual meeting will be held in the province, Mr. Speaker. MR. SPEAKER: The Honourable Member for Lac du Bonnet. MR. SAMUEL USKIW: Mr. Speaker, I would like the Minister of Finance if, given the fact that in 19 77, when he was on this side of the House, he and the then Leader of the Opposition seemed to think at that time that there should have been budgetary provisions for a possible drought, given the fact that that debate took place in April.

I'm wondering whether, now that it's mid-June, whether the Minister of Finance has taken cognizance of the drought conditions and whether he is making some adjustments with respect to expected revenues and with respect to expected increased expenditures. MR. SPEAKER: The Ho nour able Min ister of Finance. HON. DONALD W. CRAIK (Riel): Mr. Speaker, we will I expect have to bring in a second supplementary supply with the present trend of events on the expenditure side. The revenue side is more difficult to predict. We have had studies done on the potential impact on the revenue side.

There is very little you can do about the revenue side, but on the expenditure side I expect that we will bring to the House before the finish of this session a second supplementary supply. MR. SPEAKER: The Ho nour able Mi nister of Highways. HON. DONALD ORCHARD (Pembina): Thank you, Mr. Speaker. Last week I took a question as notice from the Member for The Pas regarding the spraying of 2,4,5-T on northern roads. That spraying has been undertaken and is presently ongoing, Mr. Speaker. It has been comple ted on PTH 6; it may well be completed on PR 391 today or tomorrow and should be completed shortly on PR 327.

MR. SPEAKER: The Honourable Member for The Pas. MR. RONALD McBRYDE: Thank you, Mr. Speaker. I'd like to ask the Minister of Highways what method other than the announcement today in the House about spraying that's already done has the Minister used to inform people in northern Manitoba of the use of this potent ially or suspected dange rous chemical? MR. ORCHARD: The department informed CBC Northland that spraying was to be undertaken, Mr. Speaker. MR. SPEAKER: The Honourable Member for Fort Rouge. MRS. JUNE WESTBURY: Thank you, Mr. Speaker.

In the absence in Ottawa of the First Minister, I'll address my question to the Honourable Minister of Finance. I wonder when the House can expect to receive some of the promis ed reports on the chemical spraying of Winnipeg which took place in 1953, Mr. Speaker. MR. SPEAKER: The Ho nourable Min ister of Finance. MR. CRAIK: Mr. Speaker, I recall the Minister of Consumer and Corpor ate Affairs addressing this question about a week ago. Mr. Speaker, I think the best thing to do in this case is take the question as notice on behalf of the Minister of Consumer Affairs. MR. SPEAKER: The Honourable Member for Ste.

Rose. MR. A.R. (Pete) ADAM: Thank you, Mr. Speaker. My question is to the Minister of Agriculture. I would ask the Minister if he has received any complaints from truckers bringing hay and feed from Ontario of being stopped by the RCMP. MR. SPEAKER: The Ho nourable Min ister of Agriculture. MR. DOWNEY: No, Mr. Speaker. MR. ADAM: Mr.

Speaker, last week on the way home I noticed that some trucks had been stopped and were being interrogated by the RCMP, and I'm just wondering whether there has been quite a bit of this because some of these trucks are from Ontario and may not be familiar with our regulations in Manitoba as to width and so on. I just want to bring to the attention of the Minister that perhaps there should be some relaxation in this particular situation because of the urgency of getting the feed into Manitoba. MR. DOWNEY: Mr. Speaker, I found it difficult to decipher a question out of the member's comments.

If he is suggesting that there is more than normal regulations being applied to the truckers of hay in from Ontario, I can assure him that I will look into the situation and see if, in fact, there has been something taking place.

But let he assure him that we have had and been working hard to acquire trucks to bring hay into western Manitoba or into Manitoba, so that in fact there has been a continued dialogue with the Truckers' Association and I'm sure that if there had been difficulties that they would have related that to my department people who have been working with them, but I will further check on that particular issue. MR. SPEAKER: The Ho nour able Mem ber for Brandon East. 4492

Monday, 9 June, 1980 MR. LEON ARD S. EVANS: Thank you, Mr. Speaker. I'd like to addr ess a question to the Minister of Economic Development respecting the empty Swifts Canadian plant in St. Boniface. I wonder if the Min ister could advise the Ho use whether he and/or his departmental staff have been active in looking for some possible industrial usage of this particular building and whether he can advise 'what the pos sibilit ies are of provi ding some meaningful industrial operation for that particular facility. MR. SPEAKER: The Ho nour able Minister of Economic Development. HON. J.

FRANK JOHNSTON (Sturgeon Creek): Mr. Speaker, as the member knows, we don't own the building, but certainly anybody who would be interested in that building we would certainly make them available to the principals of the company that they should talk to if the particular industry they are looking at was suitable to that type of building. At the present time I haven't been informed of anybody by my department that is looking at it, but I will look into it and ask if there has been, Mr. Speaker. MR. EVANS: A supplementary question in the area of industrial development. Mr.

Speaker, about a month ago it was reported that 90 workers were to be laid off at Rivers, Ma nitoba, at the Edso n Manufacturing Company, and I'm wondering whether the Minister can advise the House whether the 90 people were laid off; and if this has occurred, whether his depa rtment ha s been able to do anything meaningful to assist that company and hopefully get it back to near maximum capacity production? MR. JOHNSTON: I'm not completely sure of the exact figures, but there were people laid at Edson in Rivers, Manitoba, Mr. Speaker.

I hear my colleague from Virden mentioning temporarily, we have been informed that it is temporary. Just as soon as the market for recreational vehicles picks up, they will start to manufacture again, Mr. Speaker. I think that's rather logical. If there are markets, they will make them. Is the honourable member suggesting that maybe we should buy their stock or their inventory, or encourage them to make them when they are not needed? MR. SPEAKER: Or der please. The time for question period having expired, we will proceed for Order for Return. ORDERS OF THE DAY ORDER FOR RETURN MR.

SPEAKER: The Ho nourable Member for Elmwood. MR. RU SSELL DOERN: Mr. Speaker, I move, seconded by the Honourable Member for Bu rrows that an Order of the House do issue for a Return of the following information: 1. The square feet and total cost of leased space for MPIC in the new Eaton's place and Highways Department in the Credit Uni on Cent ral of Manitoba building. 2. The allowance for leasehold improvements, if any, in each location. 3. The projected total cost for leasehold improvemwnts in each location. 4. The cost per month per stall for parking in each location and the total cost of same. 5.

Any additional costs incurred in the leasing of space in each location. MOTION presented. MR. SPEAKER: The Ho nourable Min ister of Economic Development. MR. JOHNSTON: Mr. Speaker, we will accept that Order for Return. MR. SPEAKER: We will proceed. The Honourable Government House Leader. MR. MERCIER: Mr. Speaker, I move, seconded by the Minister for Economic Devel opment, that Mr. Speaker do now leave the Chair and the House resolve itself into a committee to consider of the Supply to be granted to Her Majesty.

MOTION presented and carried, and the House resolved itself into a Committee of Supply with the Honourable Member for Radisson in the Chair for Department of Educa tion, and the Honour able Member for Virden in the Chair for Department of Finance. CONCURRENT COMM ITTEES OF SUPPLY SUPPLY - FINANCE MR. CHAIRMAN, Morris McGregor (Virden): I call the committee to order. We are on page 47, Finance, Resolution 61, and I will call on the Honourable Minister. HON. DONALD W. CRAIK (Riel): Thank you, Mr. Chairman. Maybe I could take a few minutes to make a brief introductory statement.

First of all I want to pass on my thanks at this opportunity to members of the Finance Department staff. We've had a very busy year in the past year and there have been some change s in the department, some changes in the role of the department, not major, but I'll go through them. In terms of the organization, the significant transfer was for the energy council appropriation to move from Finance to Energy and Mines. Page 46 of the Main Esti mates of Expenditur e contains a comparative

summary of finance program costs and a rec oncil iation statement. This reconciliation accounts for the difference between the 1979-80 finance total vote and the adjusted vote as shown on the left-hand side of this year's estimates. In terms of staffing, the Finance estimates for 19 80-81 include a total of 333.28 staff man years. This is made up of 323.26 permanent, and 10.02 term. This compares with 345.48 SMYs for 19 79-80, made up of 337.0 permanent and 8.48 term. This represents a decrease of 12 .2 SMYs for the year. 4493

Monday, 9 June, 1980 Last year members were interested in the actual number of persons on staff in the Department of Finance. I would advise that as of March 31, 1980, there were 296 employees on staff as compared with 305 on March 31 of 1979. As noted in the Provincial Auditor's Report for the fiscal year ended March 31, 1979, su bstantial progress has been made toward increasing the staffing levels within certain branches of the comptroller's division.

This has greatly facilited the increased emphasis which is now being place on enha nced financial systems and procedures throughout the government service, as well as on financial analysis and shared cost agreement control and claiming procedures. I believe that members of this committee are aware that the department lost the services of Mel Anderson, who was the comptroller, who left in January of 1980. I want to take this opportunity to record the thanks of myself and the government for his contribution over his period of time.

Mention should also be made at this time of the method of operation of the Treasury Board . Rather than having a top-he avy administrative organization as was the case with management committee of Cabinet, the Treasury Board now operates with a minimum of supp ort staff. Five Ministers comprise the Treasury Board with the Minister of Natural Resources, the Ho nourable Bria n Ransom, as Chairman; Mr. Charlie Curtis, the Deputy Minister of Finance, acts as Secretary to the Board ; staff sup port is provided as necessary by regular Department of Finance personnel.

I mention this as information to members of this committee in explanation of the fact that Treasury Board has not requested any separate spending authority for 1980- 81. As noted in the Provincial Auditor's Report for the fiscal year ended March 31, members of the House are aware that 15 6.3 million requested in the Main Estimates for tax credit payments does not represent the actual total for this purpose.

The Budget Address on May 13 th provided members with full details of proposed changes to Manitoba's Property and Cost­ of-Living Tax Credits and related programs as set out in the White Paper on Tax Credit Reform. In a full year, we estimate these reforms, together with the implementation of new programs, will provide an additional 29.6 million in provincial shelter and needs-related support to Manitobans.

The Suppleme ntary Finance Estimates include 28.6 million to meet the costs of these White Pape r initiatives in 1980-8 1, 17 .5 million of which is for property tax assistance; 2.5 for pensio ners school tax assistance; the other 8.6 is made up of 0.5 for shelter allo wance, 1.1 for increased Ma nitoba supplement to pensioners, 5 million for the child­ related income sup port program, the CRISP program, and 2.0 million for day care extenions. Now, Mr.

Chairman, I hasten to add that that's applied to various periods of the year because some come in at the second half, end of the third quarter and in the case of the CRISP, the 5.0 million applies for one quarter as it comes into force January 1 and will represent about a quarter of the amount that had been indicated for the total yearly cost. All of these provisions have been included in a 28.6 million enabling vote in Finance Suppleme ntary Estimates.

The Suppl ementary Appropriation Act of 19 80 will contain authority for the Minister of Finance to transfer as necessary all or any part of those funds to other de part ments of government for implementation. Included in my comments on tabling the Main Estimates of Expenditure on March 4, 1980 was a reference to the Canada-Manitoba enabling vote, which is appropriation 26- 1. This vote is utilized to ensure flexibility in the implementation of various cost-shared agreements with the federal Department of Regional Economic Expansion.

For existing agreements, 15 percent of approved projects amounts have been transferred from implementing departments to the enabling vote of the approved projects, I should say 15 percent of the approved projects amounts have been transferred from the implementing departments to the enabling vote and for new agreements and programs estimated 1980-81 requirements have been included in the enabling vote in total.

The enabling authority will be administered through the financial analysis and cost-shared agreements branch of the Comptrollers Division of Finance and allocated to implementing de partments on the basis of cash flow requirements. The estimates for Public Debt and Hydro Rates Stablization are both statut-0ry and do not require to be voted by the House, however the differences in the amounts provided for as compared to 19 79-80 are sufficient to warrant an explanation. Public Debt charges for 1980-'81 are estimated to increase 11 .8 million, or 17.3 percent.

The major components of this increase or a net increase in interest on general purpose debt of 16 .3 million, offset by an estimated increase of 4.2 million in sinking fund earnings and a decrease of 0.5 million as a result of forei gn exchange fluctuations. These three major variances equate to an increase of 11 .6 million in Public Debt charges. The 1980-81 estimates for Hydro rate stabilization of 14.1 million relates only to foreign currency exchange fluctuations for issues maturing during the current fiscal year.

The amount of 31. 3 million provided for in 19 79-80 was considerably higher because of the anticipated repayment of a large Swiss franc issue in June of 1979. Mr. Chairman, those are all the comments I have to make at this time and pass it along to the committee. MR. CHAIRMAN: All right. As you know we leave 1. (

a) till later so it will be 1. (b)(1) - the Member for Lac du Bonnet. MR. USKIW: Mr. Chairman, I wish to thank the Minister for his opening remarks, although I would have thought that he would have given us some idea or some elaboration on his answer to my question in the House this afternoon with respect to where he now expects to end up in overall expenditures and revenues as a result of changes in conditions that have occurred since the budget was introduced and since these estimates were prepared.

He has given us some indication as to variations, which are of course obvious at this stage, but he has not yet calculated what the - perhaps he has but we haven't the information - what the im pact is going to be on revenues of the climatic conditions in Manitoba that seem to be the crisis area at this 4494

Monday, 9 June, 1980 particular time. It seems to me that the Minister would have some idea at this stage as to what these conditions will mean in terms of revenue shortfall because of a much reduced level of eco nomic activity and what it will do to the expenditure side, unless of course the Minister is going to indicate to us that he does not plan any expenditures in order to alleviate the situation that is rapidly becoming a very severe crisis in rural Manitoba. I think, Mr.

Chairman, that it's obvious to all Man itobans - but cer tainly to people in the southern part of Manitoba - that there are going to be major reductions in business activity as a result of the climatic conditions that we have experienced and are continuing to experience.

A couple of weeks ago I suppose one could have put the argument forward that it's too soon to kno w but I believe the department, and I'm sure the Department of Agriculture is inde ed fully aware now as to where the ballpark is with respect to the expectations of production in Manitoba in terms of agriculture and what that will mean in terms of the economy of the province of Manitoba. I think that is something that can be gl eaned out through the efforts of the Min ister's department.

So perhaps the Min ister would want to elaborate more fully on his statement in the House, or his answer to my question this afternoon, as to just where he expects to find himself with respect to total expenditure at fiscal year-end and what his revenue position is going to be from what he had originally projected. MR. CRAIK: Mr. Chairman, the Member for Lac du Bonnet is correct in saying that I mentioned in the House that we would be addressing the question of increased expenditure.

I indicated that we were likely looking at a second supplementary supply bill in order to cover the increased costs and it's still too soon to start naming a figure because it's still a moving target and that picture is still changing, day by day and week by week. So it would be premature at this point to start naming a figure, because it would probably be highly inaccurate.

We are currently gathering all the information from all of the departments and by the end of the next couple of weeks, well certainly before the end of the session, we will be in a position to indicate but there appears to be very little doubt about the requirement for second supp lementary supply to be taken into account. So I suppose that's really the answer, Mr. Chairman. MR. USKIW: Well, Mr. Chairman, I don't want to make much of it other than to recognize that we expect there will have to be change s to the Minis ter's expenditures and indeed his revenue figures for the year.

The only point I make of it is that the actions of the government of today are somewhat quite different than what the actions were of the Opposition in 1977 on this very question. In 1977 the Leader of the Opposition, who is now the Premier, belabour ed the point that when we introduced our budge t in April there was no provision made for potential drought conditions, which may affect revenues and which may affect expenditures - something that was not realized by the time we got into the season; something that we did not have to allocate funds for.

It turned out to be, as a matter of fact, a fairly reasonable year. But in April, on April 5th, the then Leader of the Opp osition made a big point about the fact that we were misleading the House by not including the consequences of a major drought that he thought might happen, even though it was then only the 5th of April.

And somehow we are now at the - this is what, the 8th or 9th June - and the Minister of Finance tells us that he's really not in a position to indicate at this stage, after having had numerous reports from his department, I'm sure, and from the Department of Agriculture, as to what the intensity of the conditions are that he is not yet in a position to give us some answers as to how much revenue loss he will experience because of the conditions and how much extra expenditur es we might have to face.

You know, it really leaves open the question of whether or not the government is intending to bring about any kind of major relief measures to rural Manitoba by way of subsidy programs or support programs or loan programs or whatever before the end of this year. I don't kno w whether the government has in mind that all they are going to provide is what has already been agreed to, federally-provincially that is, some several millions of dollars in transportation assistance, feed supplies and so on.

Because the economic impact of the conditions in rural Manitoba are such that we are probably looking at a reduction of hundr eds of millions of dollars in revenue to Manitoba agriculture, and because of that reduction to agriculture, there will be a spin-off effect, a negative effect, on all of the business communities that service agriculture in Manitoba, including the city of Winnipeg. Obviously, we're dealing with something here that is quite significant in terms of proportionality and that it's at least amusing to me, Mr.

Ch airman, that the government is not in a position to say very much about it on June 9, after having been so expert on it on April 5 ·in 19 77. For whatever that's worth, Mr. Chairman. MR. CHAIRMAN: (1) - the Member for St. Johns. MR. SAUL CHERNIACK: Thank you, Mr. Chairman. In the light of what the Member for Lac du Bonnet was saying about revised estimates, I'm wondering if the Minister could give us revisions to the estimates of which he is now aware.

I'll give an example of some 4 million which apparently the Minister has found in his own estimates relating to interest payments which he says will be used in order to finance the advanced payments being made to school divisions of school grants. In view of the fact that he was able to find 4 million so early in the year, I'm wondering if he could give us revisions in the estimates of the major items so that we can have an up-to-date view of what is being requested. MR. CHAIRMAN: The Member for Brandon East. I believe he was looking for . . . MR.

EVANS: I'd like to ask a question regarding the possible removal of indexing. I did ask the qu est ion in the Hous e the other day, but I'm wondering whether the Minister can advise whether there has been any discussion at the staff level 4495

Monday, 9 June, 1980 between his staff and the staff of the Department of Finance in Ottawa on a possible removal of the index on income tax and/or some modification of that system. Also, if the Minister has any idea as to how much additional reve nue may be acquired if such a system were to be abolished or modified. It seems to me that abolition of the index could amount to many tens of millions of doll ars for the pr ovince of Manitoba. Putting it another way, it means many tens of millions of dolla rs in taxation for the people. I'm not taking a position on it, Mr. Chairman, I'm simply seeking information.

There is no question that the Prime Minister has made a clear indication that they are pondering removal of the index in Ottawa for the simpl e purpose that they have a huge deficit in Ottawa and they are looking for ways and means to abolish or reduce the deficit at least. This has been indicated as one of the possible means that the government in Ottawa will utilize, because we are tied in with the income tax system. This therefore has an implication for Manitoba.

As I said, from my quick look at the numbers, it means many tens of millions of dollars, and perhaps the Minister's staff could give us some idea of what it does imply. What is the implication in this respect? MR. CRAIK: Mr. Chairman , on the two major que stions, on the 4 millio n referred to by the Member for St. Johns, at the time the estimates were drawn up we went on the figures for total debt service. We're calculated about the end of 19 79, towards the end of 1979, when those figures were drawn up.

There was a substantial shift in the 19 79- 80 deficit picture from the time they were drawn up until the end of that fiscal year. The difference at that point represented at current interest rates the amount of money we would have had to borrow additionally in 19 80-8 1 to service what originally appeared to be the deficit at that point in time, the carrying charge on that debt that we would have thought we were going to have to borrow in 19 80-81 amounted to around the 4 million. This didn't become evident until closer on past the point where our original estimates were made up.

Now, when we brought in the other programs we found that it was just about the same amount as the other program the Member for St. Johns referred. So, as a result, we didn't have to provide for it because we knew that we had picked up roughly the amount it would have cost us for carrying charges on what we expected to be the financing of last year's debt. It turned out to be that much lower. It shifted by that much in about six months, five months.

On the second question, the Member for Brandon East on the indexing, we haven't had any indications from the federal go vernment as to what their intentions might be on indexing. With regard to figures on that, at this point just to give him some frame of reference to work from, my underst anding is that if there had not been indexing over the number of years since it came in, that we would have through our provincial income tax this year brought in a revenue of about 23 million higher than what we have brought in. MR. EVANS: Mr. Chairman, 23 million, was that for the calendar year, 1979? MR. CRAIK: 1980-8 1. MR.

EVANS: 1980-8 1. MR. CRAIK: That's just looking at it in terms of where would we be if there hadn't been indexing and from a provincial revenue point of view it would have netted on the provincial income tax about 23 million additional. Now, it would have, of course, made a MR. EVANS: I don't have the figures with me, Mr. Chairman, but there was a statement in the paper as to how much federal income tax would have been foregone in the year 19 79, the calendar year of 1979, if the index had not applied in that year. It seemed to me it was in the billions of dollars. MR. CRAIK: Yes, federal. MR.

EVANS: Yes, federal. I beg your pardon? MR. CRAIK: The figures that were listed in the newspaper were something in the order of 1.8 billion. MR. EVANS: So I suppose one could make some sort of an approximation based on our population or our percentage take that usually occurs and calculate it that way. But as I unde rstand the Minister, your estimate is 23 million for the year '80- '81. MR. CRAIK: Yes. MR. EVANS: There was no indexing applied for that year. MR. CRAIK: If it hadn't applied up to this point it would have accumulated to this year, about an additional 23 million for this one year. MR.

EVANS: Just to make sure I'm not confused on this. You talked about accumulation. There would be an accumlated figure, it seems to me, and I'm not really seeking that, if you have it that's fine, but there would be an accumulated figure that you would estimate from the day or the year that this system was put in place and then there's another figure which is precisely how much revenue was forgone, let's say, because of the indexing system. That was really my question and I guess your answer is 23 million. MR. CRAIK: 23 million in the one year. MR. EVANS: In the one year, yes. MR. CHAIRMAN: The Member for Ste.

Rose. MR. ADAM: Thank you, Mr. Chairman. A few comments to the Minister. I'm just wondering what programs the Minister intends to, in view of the serious drought that we're going through at the present time, what programs, if any, the Minister and this government intend to come up with to try and alle viate the deflated situation, the depre ssed situation that is now existing in rural areas of this province which I think eventually will affect the urban centres as well, because of the fact that Winnipeg, 4496

Monday, 9 June, 1980 Brandon are the major sup ply centres for the rural areas? I, over the weeke nd, was asked by some ranchers in my area to come out and spend an evening with them and I went over Saturday night and I listened to a three-hour sad commentary, Mr. Chairman, in regard to the situation in the beef industry and the agriculture situation. Even though they've had, in the Mcc reary area, not so much in Ste. Rose but in the Mccreary area, there was a fairly good rainfall, maybe not sufficient as what they really required, but more than anywhere else, I believe, in Manitoba.

For instance, the ranchers are extremely concerned about the fact that the drought has already affected the price of livestockj. I was talking to some of the ranchers there Saturday, some of them were encouraged to invest in Crown lands at high interest rates and are now faced with payments on land as well as trying to keep the ship afloat along with depressed prices. I passed into one town on the way home and I was told by one of the businessmen that half of the town was for sale. I just drove around a few of the streets and I saw five For Sale notices on bus inesses.

I started to ponder this a bit and I said to myself, now what would happen if we took the public involvement out of this town? If we took education; if we took the Highways Department, the hospitals, the health del ivery service and the hig hways, hydro and telephone and if the RCMP took off, it would be a pretty sad commentary in town after town after town, su rviving mainly on public service, public funds being funnelled into the economy through that way and it's really sad. It se ems to me tha t with what is happening now in rural Manitoba, that there is going to be a great shortfall in revenue s.

The money has been invested. The inputs have already been put in but the revenues are not going to be there. In speaking to some of the ranchers I said, now what's the situation? Well, they said, many of us are going to have to cut down by about 50 percent. Some will have to go out entirely because of the hay situ ation.

It seems to me that under the circumstances - and here we are in June as the Member for Lac du Bonnet has brought out and the Minister is sitting there and can't give us an idea of what's going to happen, the sh ortfall or what programs - it seems to me that the Minister should be coming in with another Budget right now, a su pple mentary Budget to try and overcome what's going to happen. Now the United States, we know what's going on there, they're going through a major recession and this is going to spill over into Canada, there's no doubt about that, on top of what we're facing here now.

I say that the Minister better sharpen up and ask his department to sharpen up their pencils and come up with something very soon because we're going to be in a very very bad situation in rural Manitoba and that's going to come into Winnipeg as well because Winnipeg depends on the rural community to survive as well. It's not just Winnipeg that su rvives on itself.

I would ask the Minister to ponder that very carefully because if all we've seen in the Budget, those small transfers of moneys from one sector to the other sector to help the lower income groups and so on, is not going to solve the problem in rural Ma nitoba. MR. CHAIRMAN: The Member for Lac du Bonnet. MR. USKIW: Mr. Chairman, there are two areas that I want to deal with. One area has to do with whether the Minister can give us the dollar figure on how much money is recovered - we're talking about recovery of money or redu ction of expend itures beyond which was anticipated when the estimates were prepared.

Can the Minister tell the committee just how many dolla rs are going to be recovered from how many people because of the change in the method of calculating tax rebates? Obviously there's a figure that had to be used in order for the Minister to come up with his total estimate figure and if he didn't use it then, then th ere has to be a su pplementary figure somewhere, because what was payable under the old tax credit system is no longer payable. There are massive recoveries there and that money is being shifted elsewhere.

So I would like to know from the Minister just how many millions of dol lars are going to be recovered th rough the change in the tax credit program. Perhaps we'll do one at a time then I'll introduce my other point later. I think this is a very significant area of change in terms of government policy and perhaps we should deal with it one at a time, Mr. Chairman. MR. CRAIK: Mr. Chairman, I was going to sug gest that the Member for Lac du Bonnet may want to leave that until we get to that item because we'll probably go through the whole . . .. MR. USKIW: All right. Okay. Then let me get back MR.

CHERNIACK: I didn't hear a word that was said the last total exchange, I wonder if it could be repeated. I have a little interference here. MR. CHAIRMAN: I guess if I'd ask every member to have his mouth a little closer to the mike, I think everyone is· speaking clear enoug h, but it's probably too much ... . MR. CHERNIACK: That's right. I didn't hear the Minister's last reply at all. MR. CRAIK: Mr. Chairman, I think there was mutual agreement here, that on the tax rebate item we'd leave those quest ions until we got to that item in our estimates. MR. CHERNIACK: All right, yes, thank you. MR.

CHAIRMAN: (1) - the Member for Lac du Bonnet. MR. USKIW: Mr.

Chairman, then I would get back to the main pol icy area and I presume this is where we should be discu ssing this, and that is what the government's policy is on the whole quest ion of equ alization, given the fact that the Premier is in Ottawa today discussing the new Constitution; given the fact tha t there is a tug-of-war on between different provinces on what should take place with respect to central government control and provincial control and how that is going to affect equalization has to be a very important area of our consideration; given the fact that Ma nitoba is such a heavy 4497

Monday, 9 June, 1980 recipient of equalization payments. And it would seem to me that the Minister ought to give us some idea as to the government's thinking as to their position that is, at these conferences on where we stand on equalization on where we stand with equalization with respect to oil being part of the formula or not part of the formula, or all of energy for that matter, Mr. Chairman.

That's an area, I think, that has to be debated most fully and I would have thought that perhaps the Minister could have given us some insight in his opening remarks on just what Manitoba's position is going to be on that whole question. MR. CHAIRMAN: 1. (b)(1)-p ass - the Honourable Minister. MR. CRAIK: Mr. Chairman, since this is a general topic, I should deal with that under this item. The present formula expires at the end of the fiscal year 19 81- 82 and the negotiations on redefining the formula are just starting to get under way at the present time. Again, the specifics have not been dealt with yet.

There has been, I think, one meeting, the first meeting took place at the officials level in Ottawa last week and it's just starting to get into the discussion stage. The western provinces have struck a committee of the four Finance Ministers for western Canada and the Finance Minister of Manitoba is chairing that committee, so that will be dealt with on that regional basis as well as the discussions which will go on at the national basis.

I understand that when this was done in 1976 that the position of the western provinces was fairly seriously taken and dominated and I think maybe the recommendations that came out of those discussions and hopefully the same thing will happen again. MR. USKIW: Mr. Chairman, I am pleased to know that Manitoba is going to play a fairly significant role at those particular meetings. Given the fact that this Minis ter is going to chair the position and the meetings for the western group, could the Minister explain for the benefit of our committee just wherein there is common purpose between Manitoba and Alberta?

I'm trying to find in my own mind just how we are compatible in the sense that Alberta is a major oil produc er and certainly wants to extract as much as they can from their oil resource, Manitoba is deficient in oil production and must import its oil from Al ber ta, and therefore how can we find common cause and common purpose with respect to a new formula, that is as between Manitoba and Alberta?

And how can this Minister then speak for the four western provinces, given the fact that we have have provinces and have not provinces, or at least Manitoba being the have not province, it would seem to me to be somewhat presumptuous on our part to want to speak for Premiers Lougheed and Blakeney and Bennett, when they are on the other side of the coin on this issue. Perhaps the Minister would be in a position to tell us how he intends to handle the problem that he finds himself in. It is a numbers game, and he's the odd man out. MR. CRAIK: Mr. Chairman, I think the member is a little bit mistaken on that issue.

He's confusing the equal ization issue with the royalties from resources issue. They are two separate matters. The only province west of Manitoba that has taken exception to equalization principles, is the province of British Columbia, and the others have been involved and have supported the idea; they still support it. In fact, I think Alberta chaired the committee in 1976 when the present equalization formula was hammered out. -(Int erjec tion)- No, your Crown leases and other things . . . oil plays a very major part, the royalties from the resources play a very major

part in affecting the equalization formula to the point where a lot of the increases that we were able to achieve in the last couple of years were as a result of that. So those provinces have not taken exception to the principle of equal ization - in fact I'm a little surpris ed to hear you suggest that Saskatchewan takes exception to it. My understanding is that it's quite the opposite. Saskatchewan is in the position where they're going to rapidly move out of the receiving end of equal ization and they have shown every indication of supporting it, just as Alberta has supported it over the years.

I, to repeat again, chaired the western Finance Ministers Committee, the last time it was done in 1976, and came up with a fairly satisfactory formula, so I think the member is confusing the negotiations on the equali zation formula, as opposed to negotiations on rights to taxation through royalty on resources. MR. CHAIRMAN: The Member for St Johns. MR. CHE RNIACK: Just on this point I'd like clarification, I'm really out of date and I don't claim my memory serves me that well.

My impression is that ther e is a limit pl aced on the amount of revenues from oil resources as far as the equalization is concerned and I am satisfied that the previous government opposed it and I want to know whether this government is in agreement with that reduced amount of revenue being used for equalization purposes, assuming I'm right in my recollection. MR. CRAIK: Mr. Chairman, now you're getting into unfamiliar territory as far as I'm concerned. MR.

CHERNIACK: Well, let me, just to be more precise, that when there was the sharp increase taking place in oil revenue benefits to the producing provinces, the then Minister of Finance, federally, John Turner, I think it was, imposed a variation to the equal ization formula by limiting the amount that would be used for equalization purp oses on his stated reason that that would break the federal government.

Therefore, we of the non-producing provinces were losers to the extent that we did not get full equalization of revenues from oil and we opp osed that and I think, I'm not even sure, I think all the provi nces oppo sed it because all the provinces thought, well, let the feds produce the money. But to that extent we were suppor tive of the need for the federal government to get additional revenues which could be used to make the equalization formula more realistic and in principle, consistent.

Therefore, we lost that battle and I think the question asked by the Member for Lac du Bon net is, is the Minister and this government fighting for the status quo, or is it trying to go back 4498

Monday, 9 June, 1980 in principle to the, as John Turner said, the integrity of the equalization system and the integrity of the formula? Which way is he going on this as one of the participants and app arently a leader in the discussions? MR. CRAIK: Mr. Chairman, the discussions have not really started yet, but what I was asking the member was as to what position he was refe rring to, the non-inclusion or the ceiling limit to resources in the formula, or to where we stood on the principle of resource royalty taxation.

My underst anding is that we are just now really getting to the limit on the inclusion, the ceiling limit on the effects of royalties in the formula, and that's going to have to change, if you were going to allow that to come into the formula from hereon in an added and greater amount. But at the present time, we have been getting increases regularly through the, I guess it's more the Crown land lease sales than it is through the direct royalties.

It's at this point in time, it has brought about, we've had increases over the last two years which weren 't fully expected as a result of the increased revenues coming from that MR. CHERNIACK: Mr. Chairman, I don't remember the formula, I don't remember the ceiling, but the Minister said we are reaching it and I think we passed it a long time ago. My impression is that had the equali zation formula been cons istently maintained , we would have been su bstantial beneficiaries of the windfall royalty revenues by the producing provinces and we've been denied that. So I don't think we're just reaching it.

I think that when it was imposed it was already way beyond the equalization formula. So now I'm confused by the Minister, and frankly, I don't know the difference between royalties and lease insofar as the equalization formula is concerned. MR. CRAIK: Mr. Chairman, I gather that we're talking about now a second ceiling which is based on the Crown land lease sales? On all resource revenues. We're now reaching that ceiling. And the first ceiling?

I think we're going to have to ask some help in to reply to the rest of it. -(lnterjec tion)­ The point of it is tha t we haven 't started to renegotiate because the present formula locks us into the end of 1981- 82, April of 1982. We have not yet started on the process of renegotiation. Staff people got started on it last week and I expect in the next few months that the other committee of western Ministers will also be starting on it as well. That's where we stand.

If you want to get further clarification on the old formula as opposed to direct revenues as oppo sed to Crown land lease sales, other things related to resources, I'm going to have to get in some additional su ppor t on that. There is also, Mr. Chairman, I think, 20-odd items that go into that equalization formula and this is one of them. MR. CHERNIACK: Mr. Chairman, that one, that one of them is a very very large item, as we can well understand, knowing what happened to oil in the last number of years. I believe that, well, I would guess that the producing provinces were quite happy with the federal position.

I don't remember. I don't think Ontario was that happy with it, and certainly we were not at all happy with it. I think it's good that the point was raised at this stage so that the Minister will be looking into it and developing a policy position, because I think it's crucial, especially today. Apparently the y're discu ssing, amongst other things in Ottawa, they are discussing the benefits from natural resources.

And we claim that the equalization formula was designed to protect the provinces, the receiving provinces, in order to create a federal system that worked, and we also claim that the arbitrary - I think it was arbitrary - imposed condition by the federal government that they would negate that feature in equalization has proven very costly to us and beneficial to the federal treasury or federal revenues.

Of course, that then ties into the other question of taxation of windfall and excess profits, but to the extent that the Minister is not familiar with it and he said they are just starting the conversations, that he is certainly now aware of the position that had been taken in the past and I am sure that he will update himself on that and then take a position.

I hope the position will be cons istent with the previous go ve rnment's position on this que stion of equalization, and if not, that we find out the reason for any change because I do think that of the four provinces in the west we are the most adversely affected by this ceiling in equal ization. I don't know if the Member for Lac du Bon net wants to pursue it further, but I feel that it's very important that the Minister acquaint himself fully with it and make this a major discussion, because one is inclined sometimes to start from where you are now and not go back to where you were.

I have other questions but I realize the Mem ber for Lac du Bon net had a series. I just want to inject the question of indexation that was raised, whether the Minister has a stated policy on whether or not indexation �hould continue. That's sort of related to the federal-provi ncial tax scene, but maybe the Minister wants to separate it from the other question. MR. CHAIRMAN: The Member for Brandon East MR. EVANS: don't know whether the Minister was going to answer that last question. MR.

CHAIRMAN: The pause is lost He may have the floor if he wants it at any time, but he sort of signals me and he didn't, so unless I'm ... MR. EVANS: The Member for St. Johns asked specifically whether the government has any position on indexing in so many words. My question is, although I unde rstand negotiations have not yet begun on the matter of equalization, negotiations are about to begin, preparations are being made, has Manitoba yet evolved a position on equalization?

Can the Minister enlighten the committee as to what position Manitoba will be moving towards or will take in the discussions on equal ization? I had a supp lementary question which was, is there a western position or can there be really a western position on the question of equalization, because I think as the Member for Lac du Bonnet indicated, there could be some serious differences of opinion. 4499

Monday, 9 June, 1980 But more importantly, have we evolved the position on equalization? MR. CRAIK: Mr. Chairman, maybe I can deal with those two items. As I said, we're just started into the discussions at the federal level, at the officials level now, to get some of the background information available. Obviously we have a very strong vested interest in the equalization principle and so we will be taking a position to fortify the equalization concept as much as possible.

The inclusion of resource reve nues is going to have to be a very important part of that, but as far as the details of the inclusion or the opening positions of the various participants in the discussions are concerned, I'm not not aware what they might be, mainly because, as I repeat, it has been just set up and I don't supp ose we'll probably get to it for several months yet. Perhaps we won't have a meeting until sometime in the late summer or fall at the Minister's level.

But Manitoba has to take a very strong position with regard to the principle of equalization to maximize the amount of return in distribution. Where B.C. and Alb erta don't receive the equalization payments, now Saskatchewan still is a recipient.

You would wonder under the formula about the formula itself because Saskatchewan, in addition to putting as I recall somewhere up close to 100 million in a heritage fund last year, was also the recipient of 60 million of equalization, and something has to rationalize itself in our system when you have that occurring if you believe and administer the equali zation principle right to the nth deg ree. Manitoba is a recipient at about the same level as the province of Quebec. Ontario of course doesn't, although under the formula, Ontario has now without change become eligible.

They said as a matter of pride and principle they would not accept it. So the government of Canada had no difficulty in putting a small change through that was able to accommodate Ontario because I think the change that it affected was that any money higher than the average national, the average of the national income scale of the province that was higher than that would not receive it. Ontario is, of course, higher. So there are starting to be things show up in the present formula that are not compatible because of the changes that have taken place in the last few years.

Quebec receives at about the same level as we do. We're just under 300 per capita per year in both provinces, somewhere between 250 and 300 per capita, and the Maritime provinces in general receive higher amounts under equalization. So Manitoba's position is becoming somewhat unique in the west and we have a very strong vested interest in, of course, maintaining and retaining an equalization principle and fortifying it if possible. As far as the indexing is concerned, as a matter of policy we have not had occasion to deal with this argument at any great depth.

I think in general I'd have to say at this point that Manitoba would not support the idea of dropping indexing, but I have to hasten to add that we haven't addressed it in light of anything that has happened recently. I think maybe we do have to start looking at it in relation to resource taxation, equalization and the whole picture. MR. CHAIJQlllAN: The Member for Lac du Bonnet. MR. USKIW: Mr.

Chairman, the Minister of course I hope by now appreciates the point I was trying to make, and that is that there is obviously, at least logically so, there appears to be a conflict of interest between Alberta and Saskatchewan governments versus Manitoba on this issue. That's why I raise the question, how can this Minister chair a meeting that is suppo sed to arrive at a concensus position, that is, the four western provinces on this issue?

It could very well be that Manitoba could not go along with what is desired in Alb erta and Saskatchewan in particular, perhaps even British Columbia, but I would hope that the Minister, if he finds himself being cornered in that way, is going to be strong enough to withdraw from such an alliance and not subject Manitoba to the power plays that are going to take place, obviously, at subsequent meeting which will indeed determine whether we gain or benefit from any revisions of present formula. But qu ite frankly there is more than that to concern ourselves with, Mr.

Chairman, in that the meeting that the Minister is talking about, the expiry date of our present agreement, is the end of the fiscal year 1981- 82. Now it seems to me that what we are really in danger of at the moment is that this Minister may be pre-empted by what happens at the Constitutional Conference where there is a tremendous amount of pressure for more provincialism and less federalism.

If those pressures, sort of, win their day, I don't what value a conference on the new equalization agreement, what value there will be to such a conference having been pre-empted presumably by a constitutional arrangement that is now under way. It seems to me that Manitoba should be taking a strong position at the Constitutional Conference for more federalism in order to ensure its position with respect to its equalization rights. I say rights, Mr.

Chairman, because it seems to me that we should look at it as a right, that is, the idea of transfers of wealth from one region to another in order to have some reasonable equity of income and standards of living and benefits across Canada from coast to coast. If we foresake that, Mr. Chairman, I think that we run the risk of virtually abolishing most national progr ams tha t are funde d jointly between the national and provincial governments. That's the true danger in this whole exercise that it seems to me that a province like Manitoba should be guarding against.

Really, the policy position of the Manitoba government should be known today, given the fact that we are now involved in constitutional dialogue, and given the fact that there is a very hard push on the part of the Prime Minister for a new constitution to be developed and that likely will result - perhaps this is optimistic, Mr. Chairman - in some decisions having been made before our Minister of Finance is even in a position to have his first meeting on the question of equalization.

So it seems to me it might be a bit late to say we've got till 19 82 to develop a position, I think we have to have a position developed now and we ought to say what it is. I don't think we should we wait till 1982, because at least the Premier should certainly have this in his mind in dealing with constitutional questions. What is concerning me, Mr. Chairman, is the fact that the statements that have so far been made by the Premier and other members of the 4500

Monday, 9 June, 1980 government tend to go along with the idea that we have to reduce federalism or the power of the federal govern ment. That is a bothersome part, Mr. Chairman. It seems to me that is the opposite direction to what Manitoba should be taking and that we ought to make sure that we have sufficient federal authority in order that we continue and improve and develop national programs for the benefit of all Canadians, rather than to breaking up into regions. I don't recall which

article it was, but there was one in one of the major newspapers not so long ago comparing Queb ec separat ism with what other jurisdictions or other provinces want and really there isn't much difference between them, Mr. Chairman. One is on the economic side, the other is perhaps on the cultural side, the language question and so on. But they are both the same and they both have the same impact and it seems that what's shaping up is an alliance between the two which may result in quite a substantial reduction of federal authority and redistributive powers, in which case, Mr.

Chairman, we will have a Canada much less worth living in than we have at the present time. I think it's worthwhile for this Minister to participate much earlier in the game in order to buy a little bit of insurance when it comes down to where we fit in and to the redistributive process of wealth in Canada. MR. CHAIRMAN: The Mem ber for Seven Oaks. MR. SAUL A. MILLER: Mr. Chairman, a few words on this qu estion of equal ization. The Min ister indicated that in 19 76, I think he said, that Alberta chaired the western provinces' position and I think put forward the position of the western provinces.

I believe this is correct. However, what I want to caution the Minister on is this, certainly Alberta and Saskatchewan and probably even B.C. will, as they did in 19 76, will call for full equalization, knowing full well though that when the crunch comes, the federal government will say, as it did in 1976, the re is no way the federal government has the funds to continue on the old formula. So they shuffle that formula around. I think the re are 29 different components in it; there is something like that. They put a ceiling on windfall revenues for oil.

The result is that they unilaterally said, well, if you all agree, we can't do it because we haven't got the funds. The reason they didn't have the funds is we go back to this whole question of this constitution and the taxing powers of the federal government. If the federal government is denied the full taxing powers on resources that it is se eking, and if provinces take the position as Alberta has that there is a limit to federal taxation on Alberta resources, then again the federal government will be in a position where it may theoretically agree with the Minister that there should be full equalization.

But they will say to him, we can't do it. Now what I am saying, Mr. Chairman, is that you cannot separate the two issues. You can't say, we 'll di scuss equalization in 1981 and today we'll talk about the taxing powers of the federal government under the constitution. The two are very much bound together because one will affect the other.

If the federal government hasn't got the funds for full equalization as it did maybe years ago where it was based on the income of, I think, the highest income in the province, the one province, if they haven't got the funds they are not going to be able to accept it no matter how many provinces may agree to that approach, because they just haven't got the funds for it. They won't have the funds if Manitoba supports Al berta and maybe Saskatchewan, but B.C., in saying that the federal powers on resources such as oil have to be limited. The bulk of the incomes, the windfall profits, will remain with the province.

If that continues then the federal government will not be able to maintain the kind of equalization which I think they should maintain in Canada so that we can inde ed have a countr y which benefits from all resourses, everyw here, no matter where they are. I'm just making these comments to indicate to the Min ister th at it's not enough to get the other provi nces along side. They will go along side knowing full well that when the crunch comes the federal government is going to say, well, we're sorry, we haven't got the funds.

That, I think, is something that I hope the Minister keeps this in mind when he meets with his colleagues and when he discusses with them the position paper with regard to equalization, but recognizing that included in that has to be their position vis-a-vis federal access to taxation from resources. MR. CHAIRMAN: The Honourable Minister. MR. CRAIK: Mr. Chairman, I appreciate the comments of the Member for Seven Oaks and I can see that problem shaping up already and I suspect that he went through it in 1976 at the time, the last time this go-around occurred.

But, no doubt, that's the case, that there's less resistance to the idea of equal ization and there's more resistance when it comes to extracting the national dolla rs to finance it. On the earlier question on federal ism, Manitoba's position with regard, the Member for Lac du Bonnet raises. There will be much discussion on this over the next few weeks, as long as the Legislature is sitting, I presume. I think I'd better to hasten to add that Manitoba will likely take a very strong pro­ federalist position. It may not appear to be in the eyes of the Memb er for Lac du Bon net but nevertheless will be.

I would point out to him though, on the item that's here before us, which is equalization, there has been agreement really to the point of enshrining it in the constitution, perhaps the member hasn't picked that up but the only one that is hesitant about enshrining the equalization principle into a constitution is the province of British Columbia and ther e's no indication that they're solidly entrenched in their opposition to it, so it's not a problem as far as the principle is concerned in Canada when you have it to the point of enshrining it in the constitution. MR.

USKIW: As long as they don't take the dollars away. One other policy area that I would like the Minister to deal with at this stage, Mr. Chairman, has to do with the, I believe they are current negotiations with the government of Canada, with respect to the off-reserve status Ind ians and the cost-sharing or otherwise of services to that group. I know it's an old one but I gather th ere has been some recent 4501

Monday, 9 June, 1980 negotiations or there are some coming up. I'm wondering whether the Minister is in a position to indicate just what is happening in that whole area. MR. CRAIK: Mr.

Chairman, there is a three party committee, tripartite committee as it is commonly referred to, made up of the Ma nitoba Indi an Brotherhood , the federal government Department of Indian Affairs and the Manitoba government to try and tie down more accurately the amount of transfer of costs that have taken place from the federal government to the provincial government as a result of shifts in location of people who have moved off reserves, dr opping of pr ograms by the federal government, institution of new programs, at the provincial level, that are being picked up by the people who have moved off reserve or on reserve even.

The provincial government has financed in the past year some manpower for the Indi an Brotherh ood , so that they could do their own research and check the figures that have been coming out of the provincial government in this regard.

Those studies are ongoing, there's nothing new and different recently but it appears to be moving along but it's certainly not very fast, there's some estimate from the provincial point of view as to what these transfers are costing the province and we would like to have it verified and agreed upon by at least the Manitoba Indian Brotherhood and this is why we have assisted them in their research work. MR. USKIW: I wonder if the Minister can indicate just what figures he has with respect to the cost of these transfers that have been taking place. Can he quantify that at all? MR.

CRAIK: The very rough figure is in the order of 30 million to 35 million. MR. USKIW: Per annum? MR. CRAIK: Per annum. MR. USKIW: Can the Minister indicate whether or not he has comparable figures over a period of time to indicate just how fast this expenditure is growing with respect to provincial obligations. Like is it going up at 1 million a year or 2 or 3 or 10 , just what is the pattern? How dramatic in other words. MR. CRAIK: As the population shifts take place from the reserves into the urban areas, you do see a growth there that is probably greater than the normal inflation rate.

There have been some preliminary estimates, I guess, undertaken to try and determine what the pattern might be over a period of years and decades in this regard and I don't think we've tried to tie it at this point to this figure. In other words if its 35 million this year what will be . MR. USKIW: Yes, next year. MR. CRAIK: On the other hand I think there may be some figures available and if there are I'll attempt to get them for the member. MR. USKIW: Just on that figure that the Minister used.

Is he talking about an additional 35 million or is it 35 milli pn and then less what is recovered from Ottawa under normal cost-sharing agreements. Is that a net additional cost of 35 million or a gross in other words? MR. CRAIK: No, Mr. Chairman, it would be the net cost. MR. USKIW: It would be the net additional cost to the province. MR. CRAIK: Yes. MR. CHAIRMAN: The Member for Brandon East. MR. EVANS: just wanted to make a comment, Mr. Chairman, that I'm pleased to hear that the Minister has stated that the province generally will take a fe deral ist position.

I think that in this forthcoming Constitutional Conference that one of the basic issues will be provincial rights, so called, versus federal powers and I suppose it's a question that has plagued political leaders, statesmen, over the years, ever since confederation and that is to what extent the provincial jurisdiction should have, whatever authority as op posed to the federal jurisdiction.

But in a country such as ours with such vast geography and certai nly serious regional disparities, economic disparities, there's no question in my mind that a strong, central government, hopefully sensitive to regional interests, is better, particularly for tho se pr ovinces that are, unfortunately perhaps, not up to the level of the average Canadian income. Manitoba for various reaso ns seems to have sli pped vis-a-vis other provinces in terms of our economic wealth and these are some pretty fundamental reasons that go beyond parties. So I say that this is obviously a basic issue.

My own concern has always been, when we talk about adding powers to Ottawa or to ensuring that ther e is a strong central govern ment, my own concern has been that that government be sensitive to all areas of the country and not be overly concerned with the two central provinces which has the bulk of the population. This is the problem in any system where you have a strong central control. The dilemma that's posed or the challenge that's posed by the vastness of the country and the differences that exist and the need to be sensitive to people in all areas.

My experience in politics is that th e federal government has not been as sensitive to the needs of Manitoba as they should have been over the years. I'm thinking particularly in the area of OREE, the Department of Regional Economic Expansion, those moneys, I don't know how you calculate fair share and I don't believe we've had our fair share in assistance from that department of the federal government.

OREE has done a lot of work, has spent a lot of money in Quebec, has spent a lot of money in the Maritimes and I think in Nova Scotia, which has come a long way to a large extent because of federal assistance through that department and I am a bit concerned that over the years we haven't had the same, I believe, the same sensitivity by the federal government towards Manitoba and some of the problems that we face. For example, in the area of unemployment, quite often the federal government makes a decision on the basis of the amount of unemployment. Well, traditionally Manitoba has been 4502

Monday, 9 June, 1980 among the three provinces that have the lowest rates of unemployment in Canada. In some years we used to be lowest, some months we used to be lowest and in some months second lowest, now we intend to mainly third lowest but we were always among the lowest three. But one reason for that is, of course, that we've been losing people for some years;

whereas in the Maritimes people seem to be more stable, there doesn't seem to be the same amount of mobility and it shows up in higher levels of unemployment and the federal government acts on the basis of the amount of unemployment. It seems to me that there is a case to be made with Ottawa that in terms of economic assistance to Manitoba, that other factors should be looked at apart from the rate of unemployment because the prairies, including Manitoba, has a very mobile population. We have a population that traditionally moves.

Before Alberta developed its oil there was a lot of people who left Alberta to go to Ontario, to B.C., United States and so on and we're seeing a considerable amount of rural depopulation as well in all areas, but we do have a very mobile population and so our economic woes do not show up in high levels of unemployment and yet the federal government seems to use that as a basic criteria when dishing out certain moneys through different programs.

At any rate I think there should be all-p arty sup port for this federalist position, keeping in mind the reservat ions one has and I know there'll be, I think, general sup port by the people of Manitoba with that particular position. Perhaps it's our historic position, I'm not sure, but at times I wonder whether we're too influenced by the voices coming out of Alberta and B.C. where there is a very strong feeling of provincial rights. MR. CHAIRMAN: for Ste. Rose. 1. (b)(1) -p ass; - the Member MR. ADAM: Mr.

Chairman, I brought some concerns to the Minister's attention that are of great concern to people in my area, both from the producers and the business people that I ran into over the weekend and I don't know if the Minister has made any comments - if he has any intentions. If he did while I was out I'll read it in Hansard and leave it at that but if the Minister didn't reply to my concerns I would sure like to hear what he intends to do in that regard. MR. CRAIK: I think it was perhaps before the Member for Ste. Rose came in, Mr.

Chairman, that I indicated that we would be bringing in second su pplementary sup ply with regard to the drought costs that we foresee at the time that we bring it in.

As far as the details of the programs are concerned I would have to ask the member to address those quest ions, in the agricultural field, more appropriately to the Minister of Agriculture, but from a finance point of view, we recognize that there are going to be additional program costs, whether it's fire fighting or drought fighting in general in the agricultural area and it will be significant enough that we'll have to add ress it by way of additional su pply. In other words, I think the member referred to a second budget but it really all refers to additional supply money. MR.

CH AIRMAN: 1. (b)(1) -p ass; 1. (b)(2)-pass; 1. (c)(1 )(a) - the Member for Seven Oaks. MR. MILLER: Mr. Chairman, I'm just wondering. Is there any increase in staff here or is it the same staff that ... MR. CRAIK: Under Administration? MR. MILLER: Under Administration Services. MR. CRAIK: Well, there's may be one decrease. No there's no change. MR. CHAIRMAN: 1. (c)(1) (a)- pass; 1. (c)(1) (b)­ pass; 1. (c)(2)(a)-pass - the Member for Seven Oaks. MR. MILLER: Mr.

Chairman, looking at last year's estimates and comparing them to this year, this Administrative Policy Br anch, under Salaries, it showed 85.5 thousand, this year in the print is shows 108.7 for last year. What would account for that difference between the print last year and the print this year, in fact with the left-hand side? MR. CRAIK: Mr. Chairman, there was one position transferred out of Administrative Policy and into another branch and that accounts for the reduction that's here. MR. MILLER: Mr. Chairman, it's not the reduction this year, it's the fact that the printover print.

Last year it was estimated the salaries woul d be 85.5; in printing this year's book, 1980, it's shown as 108.7, you know, a considerable increase. So I'm wondering why the discrepancy between last year's estimate and this year's figure. MR. CRAIK: I must correct my former comment. The transfer was from another branch into here last year ... MR. MILLER: So there is an increase in staff. MR. CRAIK: . . . which caused the increase. MR. MILLER: An increase of one? MR. CRAIK: The increase last year, Mr. Chairman, over the print last year was a transfer of a person into that branch from another. MR.

MILLER: Is he now leaving the branch again because I notice there is quite a drop? Did he go in and out? MR. CRAIK: Mr. Chairman, apparently, now the position has been vacant and we don't anticipate filling it. MR. MILLER: Oh, I see. MR. CHAIRMAN: 2.(a)- pass; 2.(b)- pass; 1. (d) - the Member for Lac du Bonnet. 4503

Monday, 9 June, 1980 MR. USKIW: I wonder if the Minister would explain to us what he intends to eo with Special Studies 350,000, which is an increase of 340,000 over last year. MR. CR AIK: Mr. Ch airman, the Manitoba Assessment Review Commission is funded out of Finance Department. We have budgeted 200,000 for it and the studies that we've had done on ManFor we are estimating 100,000 and on Flyer Industries Studies, 50,000, for a total of 350,000.00. MR. USKIW: Mr.

Chairman, I presume then that this is properly the place for discussing the current activities of the Assessment Review Commission, since this is the area that is funding the program. The other day in the Com mittee of Municipal Affairs, the Minister of Muni cipal Affairs indicated that legislation was already being drafted as a result of an interim report having been file d with the government. And given that is so, I am wanting to find out from the govern ment, or the Minister, just what the purpose of continuing hearings are at this stage if legislation is already drafted or in the midst of being drafted.

Why are we still allocating funds for continued public hearings? MR. CRAIK: Mr. Chairman, I didn't hear the exchange referred to by the Mem ber for Lac du Bonnet. My guess would be that it is probably legislation dealing with interim recommendations from the Commission because there have been some interim recommendations and perhaps it's based on that rather than the full report. MR. USKIW: Mr. Chairman, I appreciate that's the case.

The only thing that bothers me is it seems to me that interim report should have been made available to the members of the Assembly before the Minister talked about legislation emanating from that report. But, in any event, I would like to ask the Minister then what kind of studies are under way with respect to ManFor and Flyer? What is the government wanting to discover or find from those studies? MR.

CRAIK: In the case of ManFor, it has involved, first of all, the engagement of an accounting firm to look at the current operations and they in turn expanded their examination by a look at engineering studies and then finall y to advise us on what opportunities there may be to diversify, expa nd, protect, the position of the operation at The Pas; potential people tha t may be ava ilable in the business now in the private sector primarily that we could engage to become involved in the project to bring about an enhancement of its operation.

In the case of Flyer Industries, much the same, except to a lesser degree, there was less required in terms of technical study in that case. MR. USKIW: Mr. Chairman, I'm very intriqued by the Minister's statement. He is suggesting that some 150 ,000 is being allocated for studies to determine private sector involvement in ManFor and Flyer. Is he suggesting tt\at he has delega ted to this consulting firm, or firms, the respo nsibility of putting together a proposal, or in the assisting of putting together proposals, for the sale of these two public assets? MR. CRAIK: Mr.

Chairman, I guess it's perhaps a matter of semantics. I'm not sure of the exact words the Member for Lac du Bonnet used. The firm engaged in both cases is the Woods Gordon firm and they are putting together essentially, first of all, reco mmendations to the government that they feel should be looked at. Secondly, they are attempting to advise the government on whether there are opportunities in the marketplace for the involvement of the private sector in the operation of both these industries. MR. USKIW: Could the Minister indicate just when he anticipates these reports to be tabled with the go vern ment?

Wh at is the time-frame on th ese studies? MR. CRAIK: Mr. Chairman, I think probably before the end of 1980. MR. CHAIRMAN: 1. (d) - the Member for Ste. Rose. MR. ADAD: Mr . Chairman, when we were in Municipal Affairs committee, I was attempting to get some information on the Special Municipal Loan Fund, and the Minister indicated that wasn't in his department.

He said it was being administered by the Department of Labour but since the Minister is the Minister who is in charge of signing all the cheques, I am just wondering if the Minister has any information on this particular operation, since there is mentioned here of the municipalities. MR. CRAIK: It's not in Finance Estimates, Mr. Chairman. I don't think I can give you anything meaningful on it unless it's in overall terms, that we just have to get it from the Labour Estimates that appear. MR. 1. (d) -pass. Resolution 62, 2.(a) - the Member for Lac du Bonnet. MR. USKIW: Mr.

Ch airman, I would ask the Minister to give us a brief outline of the role of this particular division. MR. CRAIK: Money in, Mr. Chairman, money out, government agencies, and the investment of funds, the borrowing of funds, the entir e cash flow operation of the government eventually ends up through here. MR. USKIW: Would the Min ister describe the operation, not only the administrative part, the methodical aspect of it, but is it also a polic y advisory area?

Does this division advise the Minister on when to borrow, where to borrow, how to borrow, or whatever, or is it simply following the directive of the Minister with respect to inflow and outflow of capital? MR. CRAIK: Mr. Chairman, I think perhaps there is some of both involved like there is in many aspects of government. 4504

Monday, 9 June, 1980 MR. USKIW: Mr. Chairman, more specifically then, if the government is in need of 100 million or 200 million for a particular purpose, is it this division that looks at th ose needs and reco mmends to the Minister as to how best to acquire that sum of money in terms of where to borrow, in terms of the interest rate, in terms of the time frame, or refinancing, from to time, as the case may be? !s this the division that is sort of the Minister's right hand or first reference point with respect to those questions? MR. CRAIK: I think it's safe to say, Mr.

Chairman, this branch is primarily charged with providing the governmen t with the research capabil ity and background that is available. They would be aware of different market potentials, if one were going to go into the market, but as far as the final decision is concerned about where to borrow and when and at what rate, you would also integrate into that the advice of the retained advisors, the fiscal agents, that we retain in the community at large.

In other words, you would take your research information from here along with the advice from the fiscal agents that the province has generally and come up with your decision on where to borrow and when. MR. CHAIRMAN: 2.(a) - the Member for Lac du Bonnet. MR. USKIW: Mr. Chairman, essentially though, the Minister is indicating that he relies to quite an extent on this division on sort of advising him on the direction th at th e government should take with respect to its borrowing needs or refinancing needs and so on. Is that correct?

This division provides adv ice and information to the Min ister on the question of borrowings and refinancing? MR. CRAIK: Mr. Chairman, it would provide the research information that would be required to go into the decision and technically it reports to the Deputy Minis tr and , in fact, does, on the final decision-making process on issues and so on, that's primarily made as a result of that information to the Deputy Min ister and the fiscal agents and the Minister. MR. USKIW: Mr.

Chairman, I would like to ask the Min ister whether he has full confidence in the division and in the advice that he has been receiving from this division and through his Deputy Minister, whether he has any reason to lack confidence with respect to the operations of this division? MR. CRAIK: No, Mr. Chairman, not at all. MR. USKIW: Mr.

Chairman, then I would follow through in asking the Minister whether in retrospect, given the fact that the Minister made a big point in his Budget Speech about borrowing activities over the last several years, whether in retrospect he would say that the government received bad advice from this division and from the Deputy Minister, advice in which certain capital was acquired throughout the world and over which the Minister made much ado about the current cost of that capital, if it had to be retired today in time with the foreign borrowings.

Is he suggesting that there was something wrong with the advice that was given by this division at that particular time? MR . CRAIK: Yes. Mr. Chairman, I can only presume that those decisions were made primarily at the Ministerial level, the types of decisions referred to. What market areas you go into, what currencies you go into, when you go, I think probably in the final analysis, boils down pretty much to a digestion of the information you get from your fiscal agents, others, the market in general and pretty well become, in the final analysis, a decision by the Minister and his Deputy. MR.

USKIW: Yes, I'm pleased to know that the Minister confirms what I had thought all along, and that was that ultimately the Minister, using the best advice that he has available to him, has to make the decision. That's why I wanted to know whether, in his opinion, the fact that these decisions were made based on such advice, whether he had some reason to lack confide nce in the advisor y arm of the Department of Finance, given the kind of comments and given the kind of do cument ation that he supplied to members of the Assembly in his Budget Add ress.

I thought perhaps there should have been almost a wholesale firing of the department, given the fact that the Minister belaboured the fact that there were some 592 million of added costs to the people of Manitoba because of foreign borrowings. But the Minister now confirms that he is using the same people that were used before for the receipt of advice and information on which he would make his decisions. So it seems to me, Mr.

Chairman, that there wasn't much substance in fact to the Minister's allegations that somehow there was some mismanagement involved during those years when the government went into the foreign market, over that period of time, given the fact that they were using the best research material information that was supplied to them at that time by this particular talented group of people. MR. CHAIRMAN: The hour of 4:30 having arrived, I'll leave the Chair for Private Mem bers' Hour and will return at 8:00 o'clock. Committee rise. SUPPLY - EDUCATION MR.

CHAIRMAN, Abe Kovnats (Radisson): This committee will come to order. I would direct the honourable members' attention to page 40 of the Main Estimates, Department of Education, Resolution No. 53, Clause 4. Program Development and Supp ort Services, item (

a) Division Administration,

(1) Salaries- pass. The Honourable Member for Rossmere. MR. VIC SCHROEDER: Thank you, Mr. Chairman. Could the Minister advise as to what, if anything, the department has done with respect to the program Building The Pieces Together? That is, has there been an assessment of that program in the last year? MR. CHAIRMAN: The Honourable Minister. 4505

Monday, 9 June, 1980 HON. KEITH A. COSENS (Gimli): Mr. Chairman, we could deal with that more properly, I suppose, under (

c) Curriculum Services, but I can address it at this time. That particular program falls under the jurisdiction of the Minister of Health. I can advise the honourable member that a committee has been struck to study this particular program. It includes members of my department as well as the .Minister of Health's department and we have not received the final report from that committee as yet. MR.

SCHROEDER: Can the Minister advise as to when this committee began its deli berations and also as to whether there are any school divisions remaining in the province which are providing that particular program and if so, which divisions are they? MR. COSENS: I cannot give the honourable member the exact date that the committe started its deliberations, some months ago now. Yes, there are some school divisions that are still utilizing part of the program. If he requires the names of those school divisions, I can get them for him. I don't have them, again, at my fingertips. MR.

SCHROEDER: Can the Min ister give the committee some assurance that the delay is not just simply a matter of a slow strangulation, a slow death of this program? Last year he repeatedly indicated to the Committee ol Supply that something would be done, there would be an assessment. The Health Department Estimates had already been over and therefore everything would be moving and it sounded as though there was going to be something done. We have now passed another 12 months.

There have been another bunch of school divisions, I am sure the Minister would agree, have dropped out of this program because of pressure from people like Renaissance Manitoba, and we're back here again today with nothin g having happened. Sur ely it doesn't take that long to make a decision as to whether that program is viable for our school system. MR. COSENS: Mr.

Chairman, I unde rstand the honourable member's frustration, but I all I can assure him at this time is that the committee has been struck, it has been studying the whole problem of alcohol and drug education and that particular program that he refers to is just part of their general study. I would hope that the results of their study are forthcoming very soon. MR. SCHROEDER: Could the Minister indicate what the term Division Administration, that is in 4.(a), what is the Division Administration and could he explain the function of those people? MR.

COSENS: This particular Division Administration has the responsibility to provide the planning, the supervision, the co-ordination, and all aspects of the department's activities which relate to the instructional programs in Manitoba schools and also, of course, to the accompanying services, to teachers, to children, necessary to achieve the kind of quality and appropr iateness of programs and eq ual ity of educ ational op portunities, suppo rt services, that we see as necessary. This division also has administrative responsibility for post-secondary career development programs and for student aid. MR.

SCHROEDER: Is this the group which would, for instance, be developing educational programs for children with special needs and if so, what are they doing? MR. COSENS: That particular branch of the department comes under this particular heading but we're talking in 4.(

a) about the administration of the complete Program Dev elopment and Supp ort Services unit in the de partment which, as the honourable member can see, covers several sub­ un its de aling with Curriculum Dev elopment, Curriculum Services, Native Education, Vocational Education, Child Development Support Services, which is the particular area that the member is referring to as far as special needs is concerned. In 4.(

a) we are looking just at the administrative component. MR. CHAIRMAN: The Honourable Member for Rossmere. MR. SCHROEDER: Thank you, Mr. Chairman. Yes, I'm just looking at the chart now from the Annual Report of the Minister which indicates what he's just finished saying. I apologize. I've been away at the Municipal Affairs Committee for a while and I'm just coming in here and trying to get my feet on the ground with this one. Could the Minister advise as to where this entire department, the Program Devel opment and Suppo rt Services Division, is heading in terms of funding, say over the last three or four years?

Is its amount of funding going up in percentage terms, in terms of the entire Department of Education, or is it sort of staying stable, or is it an area which is receiving less funding percentagewise than the other areas? MR. COSENS: Mr. Chairman, I think it becomes obvious if one looks at the estimates to see that the funding is increasing from year to year in this particular area. Some components of the whole area are increasing more than others. Certain years there are initiatives taken that require the expenditure of more money.

The honourable member will notice as we move through this particular grouping within Program Development and Support Services that there are new initiatives being taken that require additional funding as I mentioned before, from year to year. On a percentage basis I must tell him that I haven 't computed what percentage increase has taken place from year to year. I notice last year that we were looking at some 17.9 million in total in this area; this year we're looking at 18 .7. I suppose it wouldn't be too difficult to work out that particular percentage increase.

But it does vary from one component to another under that heading. MR. SCHROEDER: Thank you, Mr. Chairman. Yes, I've just noticed with my own figures here, as the Minister says, that last year it was 17 ,965,000 and the year before that it was 17 ,035,000 and I've just done an ap proxi mate cal cula tion. From th at particular year it has only gone up - that is in the last several years - it's only gone up by a total of 4506

Monday, 9 June, 1980 10 percent. Are there areas within this entire division of Program Development and Su pport Services, which have had a decrease in funding and a decrease in staffing and if so, which ones are they? MR. COSENS: I suppose the first one that comes to mind, Mr. Chairman, would be 4.(d), Native Education, where the honourable member will notice that there is some dimunition in the amount of money allotted for salaries. MR. SCHROEDER: I'm sorry. MR. CHAIRMAN: (a)(1)- pass; (a)(2)-pass; (a)­ pass. (

b) Curriculum Deve lopment

(1) Salaries-pass - the Honourable Member for Rossmere. MR. SCHROEDER: Thank you, Mr. Chairman. Last year the Minister had indicated that this particular group was proposing to develop a clear and comprehensive core curriculum statement for K to 12 and I'm just wondering how you're getting along with that curriculum development statement. MR. COSENS: Mr. Chairman, that's very close to completion. I have seen some drafts of it and I would expect the completion very soon. MR. SCHROEDER: Has it been done for some grades, and if so, is any of this available or are you waiting to have the entire statement available?

MR. COSENS: It covers fro m K to 12, Mr. Chairman, the comple te program, and I'm waiting until we have the final draft before I would release it, and of course I will forward a copy of it as soon as it's completed to the honourable member. MR. SCHROEDER: Yes, Mr. Chairman. Would this be the appropriate area in which to deal with children with learning disabilities? MR. COSENS: Mr. Chairman, that I think naturally falls under 4.(j), Child Development and Suppo rt Services, and that deals specifically with the services that are provided to special needs children. MR. SCHROEDER: Yes.

Could the Minister then advise as to what the curriculum development people have been doing in the last 12 months? MR. COSENS: Mr. Chairman, they have been carrying on an ongoing revision of curriculum guides and I can be specific in this regard. They have new curriculum guides that have been published and distributed for use in the following areas: science, K-6; mathematics, 7-9; Ukrainian, K-6; science, 7-9; music, 7-9; German, 10 - 12.

And they have also produced a guide called Education for Independents and this is a program to enhance the quality of community life of trainab le and our multip ly­ handicapped mentally retarded persons. In addition they have also produced a resource book on early childhood and it's been distributed to all elementar y schools. Those are the basic curriculum directions that have been taken in the past year. MR. CHAIRMAN: The Honourable Member for Fort Rouge. MRS. WESTBURY: I thank you, Mr. Chairperson. Is this the

section under which we can ask the Minister about specific curricula in the department? Yes, he's nodding. So I would like to ask, I'm most concerned about some of the reading I've been doing about what they call values education and I'm wondering, apparently this is being taught - if that's the word - in Ontario and other p