First Session - Thirty- Third Legislature of the Legislative Assembly of Manitoba DEBATES and PROCEEDINGS (HANSARD) 35 Elizabeth 11 Published under the authority of The Honourable Myrna A. Phi/lips Speaker VOL. XXXIV No. 41A - 2:00p.m., TUESDA Y, 8 JULY, 1986. Printed by the Office of the Queens Printer, Province of Manitoba ISSN 0542-5492

MANITOBA LEGISLATIVE ASSEMBLY Thirty- Third Legislature Mem,bers, Constituencies and Political Affiliation NAME ASHTON, Sieve �AJCER, Clare11ce QffiT, Charle• T. BJ..AKE, David R. (Dave) BROWN , Arnold Jitl!CJCLASCHUK, Hon. John M. CARSTAIRS, Sharon CaNNERY, Edward J. �OWAN, Jioll· Jay CUIIIIMINGS, J. Glen DE�!CACH, Lef'! DI;SJARDit.IS, Hon. Laureot L. DOER, Hoo. Gary DOLIN, Marty DOWNEY, James E. DRIEDGER, Alberl DUCHARME,Gerry ENNS, Harry J. ERNST, Jim EVANS, Hon. Leonard S. FILMON, Qary FINDLAY, Glen M. HAMMOND, Gerrie HARAPIAK, Hon. Harry M. HARAPIAK, Hon. Leonard E. HARPER, Hon. Elijah HEMPHILL, Hon.

Maureen JOHNSTON, J. Frank KOSTYRA,Hon. Eugene KOVNATS, Abe LECUYER, Hon. Gerard MACKLING, Q.C., Hon. AI MALOWAY, Jim MANNESS, Clayton McCRAE, James C. MERCIER, Q.C., G.M.J. (Gerry) MITCHELSON, Bonnie NORDMAN, Rurik (Ric) OLESON, Charlotte L. ORCHARD, Donald W. PANKRATZ, Helmut PARASIUK, Wilson PAWLEY, Q.C., Hon. Howard R. PENNER, Q.C., Hon. Roland PHILLIPS, Hon. Myrna A. PLOHMAN, Hon. John ROCAN, C. Denis ROCH, Gilles (Gil) SANTOS, Conrad SCHROEDER, Q.C., Hon. Victor SCOTT, Don SMITH, Harvey SMITH, Hon. Muriel STORIE, Hon. Jerry T. URUSKI, Hon. Bill WALDING, D. James WASYLYCIA-LEIS, Hon.

Judy CONSTITUE"'CY Thompson Lac du Bonn�at Fort Garry Minnedosa flhineland Gimli River Heights Portage la Prairie Churchill Ste. Rp:>e �oblin-Ru�ell St. Boniface Concordia Kildonan Arthur Emerson Aiel Lakeside Charleswood Brandon East Tuxedo Virden Kirkfield Park The Pas Swan River Rupertsland Logan Sturgeon Creek Seven Oaks Niakwa Radisson St. James Elm wood Morris Brandon West St. Norbert River East Assiniboia Gladstone Pembina La Verendrye Transcona Selkirk Fort Rouge Wolseley Dauphin Turtle Mountain Springfield Burrows Rossmere lnkster El lice Os borne Flin Flon lnterlake St. Vital St.

Johns PARTY NDP NDP PC PC PC NDP LIBERAL PC NDP PC PC NDP NDP NDP PC PC PC PC PC NDP PC PC PC NDP NDP NDP NDP PC NDP PC NDP NDP NDP PC PC PC PC PC PC PC PC NDP NDP NDP NDP NDP PC PC NDP NDP NDP NDP NDP NDP NDP NDP NDP

LEGISLATIVE ASSEMBLY OF MANITOBA Tuesday, 8 July, 1986. Time - 2:00 p.m. OPENING PRAYER by Madam Speaker. MADAM SPEAKER, Hon. M. Phillips: Presenting Petitions . . . Reading and Receivi ng Petitions . . . PRESENTING REPORTS BY STANDING AND SPECIAL COM MITTE ES MADAM SPEAKER: The Honourable Member for Kildonan. MR. M. DOLIN: Madam Speaker, the Committee of Supply has considered certain resolutions, directs me to report same and asks leave to sit again. Ma dam Speaker , I mo ve, sec onded by the Hon ourable Memb er for Ellice, that the report of com mittee be received . MOTION presented and carried.

MINISTERIAL STATEMEN TS AND TABL ING OF REPORTS MADAM SPEAKER: The Honourable Attorney-General. HON. R. PENNER: Madam Speaker, I have a statement. I am today announcing our Government's policy with respect to compensation for wrongfully convicted and imprisoned persons. Despite the many safeguards in Canada's criminal justice system, innocent persons are occasionally conv icted and im prisoned. Recently three cases (Marshal!, Truscott, and Fox) have focussed public attention on the issue of compensation for persons who have been wrongfully convicted and imprisoned.

In appropriate cases compensation should be awarded in an effort to relieve the consequences of wrongful conviction and imprisonment. On May 19, 1976, Canada acceded to the International Covenant on Civil and Political rights.

Article 14(6) of the Covenant provides as follows: When a person has, by a final decision, been convicted of a crimi nal offence, and when subsequently his conviction has been reversed or he has been pardoned on the ground that a new or newly discovered fact shows conclusively that there has been a miscarriage of justice, the person who has suffered punishment as a result of such conviction shall be comp ensa ted according to law, unless it is proved that the non-disclosure of an unk nown fact, or the unk nown fact, in time is wholly or partly attributable to him.

As I have advised the House from time to time senior officials in my department have been working with their counterparts in other jurisdictions to develop a uniform set of guidelines to deal with issue. The guidelines which I am tabling in the House today are in line with the proposed national policy which has been developed to this point. I should point out that, in fact, Manitoba will be the first province to formally adopt these guidelines. lt is anticipated, however, that some other provinces and the Federal Gover nment will be adopting such guidelines in due course.

Without reading all of the guidelines into the record at this time - since the guidelines, as such, Madam Speaker, are being tabled as an attachment to this statement - I wish to stress the following principles which underline those guidelines: In my view, compensation should only be granted to those persons whose innocence has been conclusive proved, as opposed to persons who were found not guilty.

In the Fox, Truscott and Marshal! cases all three were found to be innocent. lt follows from that principle that the actual innocence of a convicted person should be established independently, e.g., by the processes provided in the Criminal Code for the granting of a free pardon, or for seeking a declaration to that effect by an appellate court.

In no case should a declaration of the innocence of an accused and a decision to grant compensation be a political decision. lt will be seen that the application of the criteria being announced today to the case of Thomas Sophonow does not result in any payment of compensation to him at this time.

The final decision of the Court of Appeal of Manitoba overturning his conviction and directing that a verdict of acquittal be entered was not a finding that he was innocent. lt was a finding that, in the view of the Court of Appeal, there were sufficient errors made by the trial judge during the third trial to warrant overturning that conviction. The Manitoba Court of Appeal further held that, since there had already been three trials, it would not be in the interests of justice to direct yet a new trial or fourth trial. In coming to the conclusion that there should not be a new trial, Mr.

Justice Twaddle, speaking for the majority of the Court of Appeal, was concerned that in view of the notoriety the case had occasioned, following three trials, it would be difficult to find a jury of twelve citizens totally uninfluenced by what they had already seen or heard. In his judgment, Mr. Justice Twaddle confined himself to saying that on the basis of the evidence placed before the jury at the third trial, he would not have convicted the accused had he been trying the matter. However, and this is crucial, Mr.

Justice Twaddle was not prepared to say that a properly directed jury could not or would not convict the accused. Indeed, further note should be taken of the record in this case, namely, that two juries did, in fact, convict the accused. Furthermore, following the first trial - at which a jury was unable to reach a verdict - the Cour t of Appeal itself deni ed Mr. Soph onow's application for bail as not being in the public interest. At that time, in ordering a new trial, Mr. Justice Philp of the Court of Appeal, with Mr. Justice Matas 1556

Tuesday, 8 July, 1986 concurring, stated: "There is evidence pointing to the guilt of the .a�cused (and) the evidence may well have supported the ccmviction of the accused." , Tl')ere has been a form�;tl request from Mr.

Sophonow through his counsel, not only for compensation, but for . . the. appointment of a commission of . inquiry . to examine the. conduct. of. the police in the investigation �nd the production of evidence in theSophonow case. l!i my considered view, Madam Speaker, the�e is no n�Q f()r Sl!Cil an. inquiry. lt should be remembered that !��re tiave been thr� P,ublic Wais during :-v��ch dii pplice offic�rs connected with the investigation have 9!ven evide;;.ce arid have been subjected to vigorous crp�s-examinMion by experienced counsel.

The very public nature of the trials has resulted in intense scrutiny of every step of tl'le investigation and, in my view, has uncovered nothing that wouid war�ant.a further incjul�y1 There i� nothing to suggest that legal standards and requirements have not been met .. lt is hard to en;visa.ge an inquiry tt)at couid dei �riytt)ing ·Elf se .�x,e;:�m try, .th.El matter forye� a follrt�. �irre� t�e.very t�!!l9. the, ,Cou�t of Appeal thought would Qot be i!l fhe public;; interest This is su,rely rot . warr�jjjed. Un�ei:.thej>c:iiicy being a.n11ounced today it woul,d be open for Mr.

Sophonow if he has i>rocif of his innocencE! to come fortti. with that pi:oot Whether an inquiry would then ,be directed would, of course, depend on ttie nature of the evidence to be adduced.

Members sh0uid be mindful of the need, both io compensate those whose inno c;;ence has been independerjUy established and, at.ttie sametlme, to avoid shackling the timely and. thorough irivesti�ation of crime and the need to charge persons where evidence at the tin)e warrants the laying qf sucti. a 9harge, A subsequent verdict of acquittal does not mean that either the laying of the charge origiluilly, ,or the inciu ceration of t!Je accused subsequently was wrongful, nor does, it mean that an accused has t:Jeen proven innocent. lt means, simply, that in the minds of the jury or, as in this case, the Court of Appeal, ttie Crown has not satisfied the burden placed on it to pro11e the guilt on the accused beyond a reasonable doubt. . .

I conclucle. Madam Speaker, by emptJasizing that the policy we are announcing today, which requires proving the actual innocence of an accused betore compensation is paid, is one which, I am sure, will .be supported by the vast majority of Ma!Jitobans .. This policy is consistent with our legal traditions and with our international undertakings. MADAM SPEAKER: The Honourable Member for St. Norbert. MR. G. MERCIER:. Thank you, Madam Speak er. I thank the Attorney-General for providing this statement to the House and to the people of Manitoba.

As we're all aware, Madam Speaker,. we live in a society where one of our most important principles is that a person is presumed to be innocent until he is proven guilty. In the establishment of this policy, Madam Speaker, that an accused person would only be granted compensation. wtiere he has conclusively proven his innocence. I must say, Madam Speak er, without getting into the particular case that the Attorney-General has referred to, some concern over the establishment of a principle that much in favour, as it were, Madam Speak er, in the favour of the state.

I wou.ld simply raise some questions - and that I would like to pursue, Madam Speaker, in the Estimates of the Attorney-General - what safeguards are there in such a clear position against compensation; safeguards with respect to people acting in the administration of justice, proceeding on skimpy evidence, Madam Speaker.

Under this policy, taken literally, the oil us is then shifted to the accused to prove his. iri.nocence. lt may very well be, Madam Speaker, as we examine the policy that has been announced by the .Attorney-General, that we will have to examine it f�d h�r in order to enst,�re that individual.fre,edoms and li.bertles are adequately safeguarded, and that police arid law enforcement authorities are not allowed, Madam Speaker, to proceed without sufficient regard f.or, the rights of members of our society. lt's a very d(fticult question, I grant, Madam Speaker, to the Attorney-GeneraL I congratulate him and other officials across Canada for even trying to deal with this vexing probler;,. ! think, however, it is one that we would like to deal with in Estimates of the Attorney-General, and E)Xamine this policy that he has announced somewhat further. !\IIAQA,M SPEAKER: The Honourable Minister of Health.

HQN. L. DESJARDINS: M11dam Speak er, I'd like t� table the Annual Report of the Alcoholism Foundation of Manitoba for the year 1984-85, and the Annual Report of the Manitoba Health Services Commission for the year 1985-86. MADAM SPEAKER: The Honourable Minister of the Environment. HOIII. G. LECUVER: Thank you, Madam Speaker. I would like to table Supplementary Information for the. Legislative Review of the Estimates of the Department of Environment, Workplace Safety and Heaith. MADAM SPEAKER: The Honourable Government House Leader. HON. J. COWAN: Thank you, Madam Speaker.

I'd like to table the Supplementary Information for the Legislative Review of the Department of Cooperative Development for the year 1986-87. MADAM SPEAKER: Notices of Motion .. . Introduction of Bills. Before we move to Oral Questions, I have a brief statement to make. SPEAK ER'S RULING M4DAM SPEAKER: On July 3, I agreed to take two matters under advisement: (1) whether the Honourable Member for Emerson is required to table the particular 1557

Tuesday, 8 July, 1986 pieces of information to which he referred , whatever they happen to be; and (2) the rule in respect to tabling of documents generally.

First Rule 29(1), as members know, states: "29( 1) Where in a debate a Member quotes from a private letter, any other Member may require the Member who quoted from the letter to table the letter from which he quoted but this rule does not alter any rule or practice of the House relating to the tabling of documents other than private letters." The Deputy Speaker in his ruling on July 3 correctly interpreted this Rule as meaning that a Member who has quoted from a private letter must table it and that where a document in debate is not a private letter it may be tabled.

The Honourable Member for Emerson did, voluntarily on July 4, table a number of documents to which he had referred in debate on July 3. Second, the portion of Rule 29. 1 relating to private letters is clear and precise. lt leaves no doubt about the requirement where a Member quotes from such letters. However, the absence in the rule of any definition of "private letter" or "document," and any differentiation between the two, does cloud the issue and cause difficulties with

interpretation of this rule. For example, the Honourable Member for Emerson on July 3 referred to directives, documents, information, legal opinions and letters. I will, therefore, place the general question of tabling of do cuments, and the mor e specific one of the

interpretation and application of Rule 29.1 before the Standing Comm ittee on Rules of the House. Oral Questions. The Honourable Member for St. Norbert. MR. G. MERCIER: Madam Speaker , prior to Oral Questions, I wish to raise a Matter of Privilege, and I have a motion.

I raise this matter, Madam Speaker , having given prior notice of my concern to the Government House Leader with respect to Members of the Treasury Bench issuing press releases or holding press conferences prior to introducing bills for second reading in the House, and it has been a long-established tradition and parliamentary practice that such conduct should not occur prior to the second reading of a bill, because it is of utmost importance that all Members of the House, all elected representatives of the people of Manitoba, should receive this information first so that they are in a position to examine it and to comment on it.

I raise this issue, Madam Speaker , with respect to the holding of a press conference yesterday by the Minister of Consumer and Corporate Affairs, and the issuance of a press release on amendments to The Trade Practices Inquiry Act, a bill which was just distributed, but not yet introduced for second reading. I raise it, and I wish to assure the Min ister of Consumer and Corporate Affairs, Madam Speaker , that I am not raising this issue in any personal way involving him. lt has been done by other members, but having given notice of my concern to the Government House Leader, I raise it now.

I know, Madam Speaker, that this has sometimes been a difficult issue for many Ministers to deal with, because they feel they have a bill of utmost importance that they wish to deal with the press on, but I want to point out to members opposite that there is a way of dealing with it. Ministers in the previous government dealt with it under Rule 85, which allows the mover of a bill on first reading to give a short explanation to the House, so that the House can understand the purport of the bill; that has been used, in fact, Madam Speaker, by some Ministers in the previous govern ment.

So the vehicle in the Rules is there if the Minister feels it is of utmost importance that he make a public statement prior to introducing a bill for second reading. In view of the fact, Madam Speaker, that having given prior notice to the Government House Leader, this occurred once again by Ministers opposite, I move, seconded, by the Member for Sturgeon Creek that the Mi nister of Consumer and Corporate Affairs be requested to apologize to the House for holding a press conference and issuing a press release prior to introducing, for second reading, amendments to The Trade Practices Inquiry Act.

MADAM SPEAKER: it has been moved by the Honourable Member for St. Norbert, seconded by the Ho nourabl e Memb er for Sturgeon Creek - the Honourable Member for Sturgeon Creek. SOME HONOURABLE MEMBERS: Oh, oh! MADAM SPEAKER: The Honourable Government House Leader. HON. J. COWAN: Yes, Madam Speaker, I would like to speak briefly to the Matter of Privilege and indic ate to you that the matter, which the Member for St.

Norbert and the Opposition House Leader has raised, is a matter that has caught the attention of this House, both during terms when this particular group sat on this side of the House, and during terms when that particular group sat on this side of the House, as to how to deal with a difficult situation where bills are distributed two days previous to second reading and, in fact, they are made comment upon by mem bers of the opposition; sometimes by members on this side; certainly by members of the press, because they have those bills distributed to them; and what happens is that a bill becomes known to the public in such a way so as to not provide the focal point, or the explanation, of the government or the Minister who is introducing it In the past different government have attempted different ways of dealing with that particular situation.

The Opposition House Leader, the Member for St. Norbert, did indicate to me earlier, we did have a conversation that this was a concern of theirs, and I think that at that time we indicated that the practice in the past had differed and that there might be problems in the future and we should attempt to resolve those problems.

I'm not certain that a Matter of Privilege is the correct procedure in which to follow to resolve those problems and, for that reason, would suggest that there may be other options that could be reviewed by the Opposition House Leader, and myself, in regard to the practice that now exists and how to make certain 1558

Tuesday, 8 July, 1986 that matters are presented to Mem bers of the House at the same time that they're presented to mem bers outside of this House. We have just had a recent example of a problem where we did not, in fact, introduce into the press comments about a particular bill, The Family Farm Act; yet we had members opposite discussing with the media that particular bill while the Minister of Agriculture, the Minister responsible for introducing the bill, did not speak to the press . . . MR. J. DOWNEY: That's his problem. HON. J.

COWAN: . . . and we did not - well, the Member for Arthur says, "That's his problem ", meaning that that's a problem of the Minister of Agriculture. No, that's not his problem, that is our problem, because unless we have on both sides an assurance that nobody is going to speak to the media and give press interviews on a bill until we have had an opportunity to discuss it in this House, we all have a problem.

We attempted to deal with that problem in this particular instance on the basis of advice, which I gave to the Minister of Consumer and Corporate Affairs, in regard to that press conference, by having a press conference, at which time he could explain to the people of Manitoba, to whom we have a duty to serve as well, the details or the general parameters of that bill.

I understand that a copy of the press release, which he distributed to the press, was distributed simultaneously - that's my understanding - simultaneously to members opposite, so that they had the opportunity to review that particular press release at the same time that the press did.

If that is not a workable system, in the opinion of the Opposition House Leader and members opposite, I would be prepared to sit down with them and discuss how we can make this system work better, but we cannot allow a situation to continue to exist where members from their side can comment freely on a bill, while mem bers from this side do not comment upon a particular bill, and the Member for Arthur says that's our problem. That's unacceptable.

So what I would suggest, if there if no prima facie case, that the Rules have been broken or that the member's privilege has in any way been affected by this particular practice - it is a practice that, I think, if they reflect back upon, they will recall having used when they were in government; it is a practice that has been used on this side of the House during the last term of this government, and it is a practice, which we believe, well serves the public - and that is our prime duty - because it allows them an opportunity to understand what the bill purports to do and how it purports to do it at the time that it is being distributed and dealt with by members of the press and dealt with by members of the opposition.

MADAM SPEAKER: The Honourable Leader of the Opposition. MR. G. FILMON: Madam Speaker , are you permitting debate on the motion? MADAM SPEAKER: I'm permitting comments as to whether this is a Matter of Privilege, advice. 1559 MR. G. FILMON: Speaking to that, I believe that the matter that's been raised by the Member for St. Norbert is a valid one, one that should be considered as a matter of privilege in the House. lt is a matter that I say to you Madam Speaker, has been raised before.

The Government House leader refered to the fact that during the time in which we were in government the point was raised, and I can recall, on at least two occasions, that the former member for St. Johns raised issue, not only Madam Speaker with having a news conference prior to second reading introduction in this House on a bill, and also on even making a major public statement outside the House without making it in the House. In both those instances the former memb er for St.

John's took issue with the then admin istration on a matter of privilege and said that he believed we were breaching the practices and traditions of this house. He said that this House was the highe st authority in the province; that in the public order of events this House deserved to be informed on major issues and indeed on the introduction of bills, prior to any public announcement.

He believed that this House took precedence over any media relations or pu blic rela tions, and Ma dam Speaker , the Govermnent of the Day acceded to his concerns and wishes and changed the practice to ensure that those announcements came only after second reading in the House. I say to you, Madam Speaker, that this is indeed a matter of privilege because it breachs the privi leges of members here who, as members of this House, have the right to know, before anybody else, about the principal of the bill and the intent and the proport of it. I say to you Madam Speaker, that the member for St.

Norbert has gone so far as to give, I believe, very good direction by suggesting what the alternative is in terms of giving brief explanatory comments with first reading of the bill, and I believe that it should be treated in this vein. He suggested, I think, a very workable and reas onable solution, that the memb er need only apologize to the House for this breach and the matter will be done with. There need be no further debate, there need be no other consideration of the matter and indeed, Madam Speaker, the lesson can be properly learned and passed along to all members of the Treasury Bench.

So, I say to you , with those brief comments, Madam Spea ker, that I believe that this is indeed a matter of privi lege and that the Min ister of Consumer and Corporate Affairs can address it very swiftly and very simply. MADAM SPEAKER: The Honourable Mi nister of Consumer and Corporate Affairs. HON. A. MACKLING: Madam Speaker, I just want to add to what our House leader has put on the record, provide you with the full information and all members of the House.

There had been concerns as to the responses that would be given after distribution of the bill because there was anticipated media interest in this legislation. I had already received a call from one of the media concerned to discuss the provisions of the bill. I was advised that past practice and precedent had established a vehicle to permit resolution of that

Tuesday, 8 July, 1986 problem. The practice was that a copy of the news release that would be furnished to the media would be supplied to the Opposition, the Opposition critic. I follo wed that practice to the letter.

I delivered a copy of the press release to my critic at 2:30 p.m. yesterday afternoon, and then I indicated to him personally that likely the press would be asking questions of him, or others, because they've already - I don't know whether I had indicated they had already approached me - and I didn't meet - (I nterjection) - The Honourable Member for Sturgeon Creek doesn't want me to provide information. SOME HONOURABLE MEMBERS: Oh, oh! MADAM SPEAKER: Order please. Order please. SOME HONOURABLE MEMBERS: Oh, oh! MADAM SPEAKER: Order please! Order please!

Will the Honourable Member for Lakeside please come to order and allow the Honourable Minister to finish his advice to the Speaker? The Honourable Minister of Consumer and Corporate Affairs. HON. A. MACKLING: So to put it in context, Madam Speaker, at 2:30 p.m.

I did speak to the Opposition critic, I did not meet with the press until 4:00 p.m. that afternoon, and dealt with the questions that the press put to me then. lt wasn't in the term of a press conference per se, it wasn 't a media exposition, I was there to answ er qu estions in respect to the bill, questions that were already extent with the media, because they had the bill and were asking questions. Therefore, I was following the advice that past practice and precedent in this House accommodated the concerns of the media and the general public into an explanation of the contents of the bill.

I suggest, Madam Spea ker, that you consider the past practice of this House, past rulings of former Speakers on this question, and take any decision in respect to the question as to whether or not this is a prima facie motion, or a valid grievance motion, under advisement. MADAM SPEAKER: Thank you very much. SOME HONOURABLE MEMBERS: Oh, oh! MADAM SPEAKER: Order please. The motion for an apology is not yet before the House. I will consider the advice that honourable members have given and report back to the House at the earliest convenience as to whether debate should proceed on the honourable member's motion.

OR AL QU ESTIO NS Flyer Industries - den Oudsten takeover - Wally Fox-Decent MADAM SPEAKER: The Honourable Leader of the Opposition. MR. G. FILMON: Madam Spea ker, my question is to the Minister responsible for Flyer Industries. Has he received a report from Professor Fox-Decent, the mediator who was appointed to mediate the disputes between the union and den Oudsten with respect to Flyer Industries? MADAM SPEAKER: The Honoura ble Mini ster of Finance. HON. E. KOSTYRA: Thank you, Madam Speaker. I have not received a report from Mr.

Wally Fox-Decent with respect to the mediation of the dispute between Flyer Industries, New Flyer, and the union, and that report would be filed with the Minister of Labour, rather than with myself as Minister responsible for Flyer Industries. I did receive a report and was in fairly constant communication with the mediator over the last week. I did receive a report on the weekend that there was a successful conclusion to the negotiations that he was involved in between the union and den Oudsten and the Manitoba Development Corporation.

I have been further advised that, as of last evening, the membership of the union has ratified the terms of agreement between den Oudsten and their union negotiation committee, so there is now a settlement to the concerns that were expressed with regard to the changes needed for the training program with the union. MR. G. FILMON: Ma da m Speak er, did the recommendations and the agreement solely involve the un ion and den Oud sten, or was the go ve rnme nt required, in any way, to change any aspects of its agreement with den Oudsten? HON. E.

KOSTYRA: There will be some changes as a result of the agreement that was reached, as it relates to the share-purchase agree ment, none of which impact on the Manitoba Development Corporation. I believe one of the changes, and I have not seen all of the details yet, one of the changes relate to the provision that was in the share-purchase agreement for a profit­ sharing plan. As a result of negotiations that was removed by the company and something else instituted for the empl oyees, so there are some changes that will be made to the share-purchase agreement in terms of the results of that agreement.

I think it's certainly quite believable, Madam Speaker, that in the context of the labour relations act in the Province of Mani toba that provides for rights on succession of a business, a law that members opposite criticized and suggested that would not work in the best interests of Manitoba has clearly, in this case, worked in the best interests of the Province of Manitoba, the best interests of the employees and the new company that is taking over the New Flyer. MR. G.

FILMON: Madam Speaker, will the Minister table the cha nges that ha ve been made to the agreement between den Oudsten and MDC or the Province of Manitoba? HON. E. KOSTYRA: Most certainly, Madam Speaker. The changes that are being made will be tabled once 1560

Tuesday, 8 July, 1986 they have been put to writing. Flyer Industries is still before committee and I would certainly intend to ensure that information is provided to members prior to the next sitting of the Standing Commi ttee on Economic Develop ment, prior to it reviewing that, but I will provide that information to members of the Cham ber. Flyer Industries - new contracts MR. G. FILMON: I wonder if the Minister can indicate whether or not Flyer is at present continuing to bid on any new bus construction contracts. HON. E.

KOSTYRA: I don't believe that the present Flyer Industries is bidding at this moment on any contracts, or has, over the last short period of time. MR. G. FILMON: When will Flyer Industries resume bidding on new contracts? Presuma bly, without any new contracts, there won't be any opportunity to continue the business. When is it anticipated that they will resume bidding on new bus construction contracts? HON. E.

KOSTYRA: Madam Speaker, as was explained in comm ittee when we were reviewing this matter, there will be work in progress for the new company well into this year, and I would anticipate that at some point after July 15, once the new owners take ownership of Flyer, that they will resume, based on their business plan, biddin g and actively looking at furthe r opportunities for contracts for Flyer Industries. I do know, in the interim, that the principals of the company have visi ted with a numb er of transit authorities throughout Canada, in the Uni ted States.

Indeed I know that one transit authority in Eastern Canada travelled to meet them in Holland, so I would expect that they would very quickly be working on additional work for the factory. MR. G. FILMON: I wonder if the Minister could indicate when was the last time that Flyer Industries bid on a new bus construction contract. A MEMBER: A long time ago. HON. E.

KOSTYRA: I would have to take that specific question as notice just to confirm what I understand, but I believe the last bid was with respect to the Toronto Transit Commission contract which is presently in the latter stages of completion in the factory right now. Tourism in Manitoba - loss to Manitoba MADAM SPEAKER: The Honourable Mem ber for Portage la Prairie. MR. E. CONNERY: Thank you, Madam Speaker, to the Minister of Tourism. Tourism is our third largest industry in Manitoba. lt contributes many needed jobs to Manitobans and, in the summer, especially for students.

The Minister's officials are baffled by the 10 percent drop in tourism for May. Is the Minister also baffled or can she explain the drop in tourism? 1561 MADAM SPEAKER: The Honourable Minister of Small Business and Tourism. HON. M. HEMPHILL: Thank you, Madam Speaker. No, I'm actually very pleased to be able to talk a little bit about . . . SOME HONOURABLE MEMBERS: Oh, oh! HON. M. HEMPHILL: Madam Speaker, I'm pleased to be able to explain that the figures that are co mm un icated in the paper are not an accurate reflection of the strength of the tourist industry in Manitoba.

We are still expecting a record year for tourists overall in the Province of Manitoba. Every indicator that we have still indicates, whether you're talking to the hotels, the people in the field, the information requests, the people dropping in on their way back from Expo, every indicator shows that we're still going to have a boom year. However, there is a 10 percent drop in foreign travel in the month of May, but one month does not a tourist season make. There are some explanations for the 10 percent and I think that's what the Member for Portage la Prairie was asking for.

First of all, it is compared to a record increase in tourism in the previous month of May, a 23 percent increase, compared to the Province of Saskatchewan at 4 percent; so we had a record year in the month of May last year, a 23 percent, and the 10 percent decrease is compared to that. We had a couple of additional problems and one was the measles outbreak, Madam Speaker, which I'm sure ... SOME HONOURABLE MEMBERS: Oh, oh! HON. M.

HEMPHILL: The measles outbreak and the lateness of the farmers being able to get on the land, which all members opposite will be able to understand MADAM SPEAKER: Order please, order please. HON. M. HEMPHILL: . . . and this has had an effect MADAM SPEAKER: Can the Honourable Member for Portage la Prairie ask a suppleme ntary out of that. MR. E. CONNERY: Yes, after that unbelievable first answer, I'll ask another question. Can the Minister now give us any indication as to the economic loss of this 10 percent drop in tourism to Manitoba? HON. M.

HEMPHILL: Madam Speaker, we are still expecting overall about a $25 million increase in the tourism industry in the Province of Manitoba and we'll have to wait till the end of the season to confirm those figures, because they're not based on travel in the month of May, which is incidental travel, people coming from other provinc es and from the U.S. markets, but is based on overall travel, not just the foreign market;

Tuesday, 8 July, 1986 so we are still expecting about a $25 million increase overall in all travel, and I think that's good news for Mani toba. Expo '86 office - staffing of MR. E. CONNERY: A new question to the same Minister. Can the Minister tell us what is the cost of faring emp loyees to Expo every three weeks to man a 15 by 30 ft. booth that is attracting less than 15 0 people per day, while the office in this building attracts over 300 people per day? MADAM SPEA KER: The Hono urable Min ister of Ind ustry, Trade and Technology. HON. V. SCHROEDER: Thank you, Madam Speake r.

I had partially answered those questions previously. I'd like to inform the member in the House that we're doing the same thing other provinc es are doing. We find that is the least expensive way of providing that service at Expo. lt is costing us approximately $56 per day, room and board, for our people at Expo and that is way below what it's costing Saskatchewan or Alberta. Saskatchewan is using the three-week system in the same way Manitoba is. Alberta is using the one-week system, and what we're doing is the least expensive method of doing it possible.

As indicated, we are having about 15 0 visitors a day and that goes up to 450-500 on the weekend, and we've had about the success that we expected with that pavilion so far. MR. E. CONNERY: Madam Speaker, is the Minister then saying, along with the other provinces, we are giving a lot of civil servants a holiday on taxpayers' money? HON. V. SCHROEDER: Ma dam Speake r, the ho nourable mem ber should unde rstand that the province invests in product development, in product sales, in assisting our manufacturers to sell products. Madam Speake r, not all our expenditures have to be in the agriculture related area.

We are also looking at - and this happens to be a transportation exposition. We have employers there from Manitoba as well who are presenting their products. We're doing our best to help them and it is not a holiday. The apartments we're renting, as an example, are about $505 a month, compared to about $2,000 a month for the Alberta people. We have calculated what we can do.

We're sending, at different times, those particular people who are expert in the fields that are being featured at given times of the summer, and those people are working 12-hour days at the site; they're putting in probably longer hours than they would if they were here in Manitoba and they're there on business for Manitobans. They're doing the same thing, Madam Speaker, that people from other provinces represented there are doing and that costs some money. 1562 Highway construction - four-laning of Highway 75 MADAM SPEAKER: The Hon ourable Mem ber for Lakeside. MR. H. ENNS: Thank you, Madam Speaker.

Getting back to those 10 percent fewer tourists arriving in this province, Madam Speaker, I direct a question to the First Minister because very often the first and lasting impressions of a visitor's or tourist's impressions of the place that he or she has visited is the condition of our roads and highways in that community or in that province. And, Madam Speaker, the Premier ought to become very concerned about the condition of our roads. They are deteriorating, Sir, rapidly by the action of your gove rnme nt in reducing the Min ister of Highways's budget by $12 million.

MADAM SPEAKER: Does the honourable member have a question? MR. H. ENNS: I have a specific question, Madam Spea ker. After that lengthy answer that I got from the Minister responsible for Tourism, I do believe I detected the fact that it was principally the foreign, and I assume American visitors, that were not coming to this province or the drop was 10 percent. Now my specific question to the Minister is, when will he direct his Ministry of Transportation to get on with the four laning of Highway No. 75 and perhaps do something about that 10 percent reduction in tourism? HON. H.

PAWLEY: Madam Speaker, as we've indicated on different occasions there requires a balance insofar as economic, insofar as spending, insofar as the deficit is concerned, and that means that one has to use prudence, sometimes unpopular decisions obviously have to be made in order to ensure that one restrains spending, at the same time concentrating on those areas of highest importance, recog nizing that 75 and road construction, and all the other programs that honourable members would like us to spend money on - some $10 0 million to $15 0 million during the course of this Session.

They're all good suggestions but they all cost money, and it's the government that has to make some pretty difficult decisions. MR. H. ENNS: Madam Speaker, the First Minister makes a valid point. it's easy for us to suggest where money ought to be spent; we ought to at least be able to suggest where it could come from. This morning at comm ittee, Madam Speaker, we have learned that we, as Manitobans, have invested $6 million into ManOil so that we could loose $1 6,000.00. We could take the $6 million and build some roads with it. MADAM SPEAKER: Order, order please.

I presume the honourable member was rising on a supplementary, (

a) which needs no

preamble, and (

b) may I remind the honourable member that question period is not a time for debate, but a time to seek information, not give it. The Hono urable Mem ber for Lakeside with a supplementary to the First Minister.

Tuesday, 8 July, 1986 MR. H. ENNS: Supplementa ry que stion, Ma dam Speake r, to the First Minister. Would the First Minister seriously consider redirecting some of the funds currently in place that are not providing any particular social service to the province, and in fact are simply a public hemorrhage on public funds, in ManF or or in ManOil, and redirect them to areas that are in need today, including the Faculty of Engineering at the Un iversity of Manitoba. HON. H.

PAWLEY: Madam Speaker, we are fortunate in the Province of Manitoba to have a diversified economy, to have an economy where there's forestry resources, mineral resources, agricultural resources, tourism, manufacturing base, a resource base that we intend to encourage the development of. I know a resource base that Manitobans have confidence in, insofar as its future growth and development in.

And, Madam Speaker, we will put our effort toward the development of the oil resources of this province, despite opposition from memb ers across the way; development of potash resources, despite opposition by members across the way; devel opment of hydro and energy resources despite opposition from honourable members across the way. Because what we are doing, Madam Speaker, is developing an economic base to ensure that we bring about the gradual develo pment and improvement of the economy and finances of the province as a whole.

Indian Affairs - audit of Manitoba Branch MADAM SPEAKER: The Honourable Memb er for Burrows. MR. C. SANTOS: I woul d like to direct a question to the Minister responsible for Native Affairs. In view of the federal shuffle in Cabinet, the federal level in government, would the Honourable Minis ter make representation to his federal counterpart in order to act quickly and promptly on the audit of the Manitoba Branch of the Department of Indian Affairs. MADAM SPEAKER: The Ho nourable Mini ster responsible for Native Affairs. HON. E. HARPER: Thank you, Madam Speaker.

Yes, I will be representing the interests of the Native people, the Indian people in Manitoba, in respect to the audits that were done in Manitoba. I might say that I'm disappointed in the transfer of Mr. Crom bie to another department.

I believe that he had a lot of tasks that he had to fulfil!. lt seems to me that after a hundred years of Indian Affairs we seem to have a changeover of Indian Affairs every couple of years, and we give a pair of moccasins to the Ministers and they don't seem to complete their mile walk before the end of their term. lt seems a waste of time that we're educating the Ministers and I hope this Minister will come to understand the issues of the Indian people more quickly. MR. C. SANTOS: A supplementary, Madam Speaker.

Will the Honourable Minister also be meeting with Indian chiefs and Native band organizations in order to discuss the implications of this audit for the Native people of Manitoba? HON. E. HARPER: As you know, the chiefs have put themselves on the line for exposing, the I guess administration of the Department of Indian Affairs and I have met with some of the chiefs already regarding this issue and I expect to meet with some chiefs. Worker s Compensation - appeal claim delays MRS. S. CARSTAIRS: Thank you, Madam Speake r. My question is to the Minister responsible for the Workers Com pensation Board.

Individuals who are denied benefits or who have had their benefits reduced under the Workers Compensation Board presently have no other recourse but to return to welfare. Can the Minister tell the House why the appeal process is presently taking four to six months on appeal claims? MADAM SPEAKER: The Honourable Minister of Workpla ce, Health and Safety. HON. G. LECUYER: Thank you, Madam Speaker. This is indeed one of the problems that troubles me as much as anybody else. In this Cham ber, Ma dam Speaker, and in the ongoing meetings I have with mem bers of the board I try to discuss this issue.

I have discussed this issue with them many times up to this point, Ma dam Speake r, with a view of trying to streamline and speed up this process. And at various times of the year we've come down to a period of time where it has been narrowed down to sixty days. On the other hand, there are periods where it does back up and the period of time is long er. But I have to say, Madam Speaker, that from that standpoint, although I would like to see it much shorter, it compares very favourably when you consider that in British Columbia it takes two years. MRS. S. CARSTAIRS: A supplementary question.

If it is possi ble for a simila r progr am, such as, the Unemployment Insurance Com mission to hold appeals within 30 days, is it not possible for this Minister to assure claimants that the Workers Compensation Board will provide speedier service in the future. MADAM SPEAKER: The Honourable Minister of Workpla ce Health and Safety. HON. G. LECUYER: Madam Speaker, before a claim goes to the board appeal level, it goes through adjudication; it goes through the committee review. If there is a medical review required, that is another step that a claim has to go through.

That doesn't always happen, but it does in certain instances. it's only after those steps have been covered that an appeal that go to the board level. As far as the latter part of that question, Madam Speaker, indeed, to speed up the process is what we try to do on an ongoing basis, and one of the methods we have resorted to is for a complete review of the Act, which is presently under way. 1563

Tuesday, 8 July, 1986 Motive fuel rebate for farmers MADAM SPEAKER: The Hon ourable Member for Virden. MR. G. FINDLA Y: Thank you, Madam Speaker. My question is to the Minister of Finance about the motive fuel rebate tax system for farmers. In his Ma y 22 Budget, the Min ister of Finance introduced a proposal to replace the current system of purple dyed fuel with a new Manitoba Farm Fuel Tax Credit to be adminis tered through the income tax return in 1986. The Minister requested the Income Tax Department federally for concurrence by June 30, 1986. I would ask the Minister if that concurrence has been obtained.

MADAM SPEAKER: The Honourable Min ister of Finance. HON. E. KOSTYRA: Thank you, Madam Speaker. Unfortunately, no. The initial response from the Federal Min ister of Finance was to reject the proposal that Manitoba made on behalf of Manitoba farmers, and agreed to by Manitoba farm organizations, with respect to the method of ensuring that Manitoba farmers get the full benefit of the tax reduction, or the withdrawal of the tax on farm fuels. I have again written to the Federal Government asking them to reconsider their decision in light of the position of Manitoba farmers.

In addition, I have written to Mani toba farm organizations, outlining to them the problem and asking them for their advice in terms of whether or not we should consider to pursue that particular path or look at other options. MR. G. FINDLAY: Thank you for that comment. We all agree that the system is not working the way it is, and I would ask the Minister if he's prepared to consider the resolution that we introduction, Resolution No. 9, on June 19, with an alternative system to get this motive fuel tax rebate directly to the farmer. MADAM SPEAKER: Order please.

I believe that that resolution has not been voted on and is still before the House for debate. A question should not refer to issues on the Order Paper. The Honourable Member for Charleswood. Manitoba Lotteries Foundation - review of operations MR. J. ERNST: Thank you, Madam Speake r. Through you to the Min ister responsible for the Mani toba Lotteries Foundation, is the Minister in a position now to table the report of the review of the operations of the Manitoba Lotteries Foundation, done by Mr. AI Mille r, which was, I understand, submitted in April of this year?

MADAM SPEAKER: The Honoura ble Mi nister of Culture, Heritage and Recreation. HON. J. WASYLYCIA-LEIS: Thank you, Ma dam Spe aker. As I've indicated to the Mem ber for Charleswood and to several of his other colleagues in respone to questions about the Miller Review of the umbrella system, it's my job to ensure that that report is reviewed by the umbrella groups themselves. Madam Speaker, we are at the stage in the process of receiving comments from each of those umbrella groups. I'm in the process of having in-depth meetings with each of those groups.

Once that process has been completed, I will be taking recommendations to my colleagues in Cabinet and, at that time, we will be looking to release the report to members opposite and to the public. MR. J. ERNST: Does the Minister have an estimated time when that would be completed and when the report would be released to other members of the House and to the public? HON. J. WASYLYCIA-LEIS: As the member opposite knows, the umbrella system is a complex system and those groups involved would like the time to be able to comment in-depth and for this government to take their recommendations very seriously.

I want to ensure that that process is given all the time that is necessary in order to arrive at the best conclusion to the issues raised by AI Miller in his report. MR. J. ERNST: Madam Speaker, through you again to the Minister responsible, can she advise the House why there needs to be such great confidentiality in this particular matter? Madam Speaker, I think it would be wise that all memb ers of the House, all members of the public, have the opportunity to put their input into that system so that the best system is derived as the end result, not after it's fait accompli by the government. HON. J.

WASYLYCIA-LEIS: As I' ve indicated in one of my previous answers to the member's question, there will be ample opportunity for members opposite to comment on the report and to give me their suggestions. But I think it is only courteous to allow those groups who are mentioned in the report, and affected by any possible changes, to have the time to comment on the report and to give me their advice before proceeding and before releasing this report to the public. Core Area Initiative Renewal Agreement - tabling of MR. J. ERNST: Madam Speaker, I have a new question, to the Minister of Urban Affairs.

I had the opportunity to attend this morning with my leader and several of my House colle agues, the announcement of the Core Area Initiative Renewal Agreemment, in which the Minister participated. Could the Minister advise the House when he expects to be able to table the Core Area Initiative Agreement entered into with the Federal Government and the City of Winnipeg? MADAM SPEAKER: The Honourable Minister of Urban Affairs. HON. G. DOER: Thank you, Madam Speaker, and thank you to the member opposite for the question. 1564

Tuesday, 8 July, 1986 As the information has been made public and all three parties, I'm pleased to anno unce, are recommending it to their principals, I will be preparing a fact sheet to release, not the 15 0-page document, for the House, for all mem bers' attention and, if the members opposite want the whole document, then I will also make that available to them. MADAM SPEAKER: The Honourable Mem ber for Charleswood with a supplementary. MR. J. ERNST: Madam Spea ker, could the Minister then ind icate approximately when that would be forthcoming? HON. G.

DOER: Madam Speake r, I'll attempt to obtain copies from the Core Area office of the printed document that the member opposite received this morning, that has all the details of the tentative Core Area Agreement, with the word "proposed" on it. Of course, when the three gove rnme nts ratify the agreement, the word "proposed" hopefully will come off. So I'll attempt to get copies of those forthwith, to save the Manitoba taxpayers the amount of money for duplicating that effort.

I'm pleased to say, Ma dam Spea ker, that this government is very pleased that the renewed Core Agreement includes the balance between the social and physical aspects, as was in the previous Core Agreement, and we are very pleased that the balance will be maintained as a model, and the Core Area revitalization as a model for urban planning. I believe the last Core Agreement had some $37 million for social services programs.

This Core Area has $39 million and, contrary to the advice of the mem ber opposite in his previous vocation, it will have money in the Core Agreement for training and employment, which we believe is very, very critical in the new program . Flyer Industries - new contracts MADAM SPEAKER: The Honourable Mini ster of Finance. HON. E. KOSTRYA: Thank you, Madam Spea ker. Earl ier, in question period, I took as notice a question from the Honourable Leader of the Opp osition with respect to Flyer Industries. He asked a question if there were any other contracts entered into.

I can confirm the last contract entered into by Flyer Industries was the Toronto Transit contract, which was entered into in January of this year. The Pas ag rep - loss of MADAM SPEAKER: The Honourable Mem ber for Arthur. MR. J. DOWNEY: Thank you, Madam Speaker. I have a question, through you, to the Minister of Agriculture. Madam Speake r, historically the Progressive Conservative Party have made major inroads in support of development of The Pas area, particularly dealing with the agricultural commu nity.

Can the Minister of Agriculture tell this House and the people of The Pas, Manitoba why he stripped them of their agricultural representative and the position for the agricultural representative in that community . . . HON. B. URUSKI: Madam Speaker, I wish to indicate to my honourabl e friend that the services our department have been providing to that part of the province will continue to be provided in a form, other than the direct form that we've had in the past.

However, Madam Speaker, historically, during the development years, it was felt that additional services of an ag rep should be provided; and, in fact, when you consider the services provided to The Pas, in terms of the number of farmers both part-time and full-time in an area, the services - as provided in other parts of the province - the extension staff service is approximately five-to-six times the number of farmers in other parts of the province as they've done in The Pas.

But we will be providing services to The Pas area in a form of direct comprehensive assistance through our extension staff in the specialty fields, through direct telephone contact, through - (I nterjection) - Madam Speake r, the honourable memb ers have raised a question and I'm trying to answer it. There's no doubt that the direct contact by many would be the preferable method but in - (I nterjection) - Madam Speaker, the ag rep position was vacant for a number of months for that area and we were able to provide that service.

In times of budgets and services that we provide to other people, we felt this area, in terms of its development, could handle the services in conjunction with the producers there in the way that we are proposing. MR. J. DOWNEY: Madam Speaker, in view of the fact that The Pas - with the Manfor losses, with the problems in agriculture - is a failing community under the New Dem ocratic Party; will he reconsider his decision and replace the ag rep to give the farm commun ity the support they need? HON. B.

URUSKI: Ma dam Speak er, I find the honourable mem ber's question slightly amusing in the sense that du ring my Estimates, many of their colleagues criticized the services and said that we may have had too much professional staff in the field. Now when we've reallocated and provided our services in a less expensive method, Madam Speaker, they are objecting to those provisions. Ma dam Speake r, that's the am using sense. I recognize that many of the farm people have grown to rely on some of the services that our staff provide.

We will attempt to continue to provide those services in a more economical way, so that those services will be provided to the people of The Pas area. Signing authorities - senior civil servants MADAM SPEAKER: The Honourable Mem ber for Pembina. MR. D. ORCHARD: Thank you, Madam Speake r. Madam Speaker, my question is to the Minister of Finance. 1565

Tuesday, 8 July, 1986 On June 5th the Minister of Finance took as notice a question as to when the $500,000 signing authority was granted to the Executive Director of the Manitoba Energy Authority, Marc Eliesen, by the Board of the Manitoba Energy Authority, chaired by Marc Eliesen. Could the Minister provide that information to the House now, as to when that signing authority of $500,000 was granted? SOME HONOURABLE MEMBERS: Oh, oh! MADAM SPEAKER: Order please. Order please. The Honourable Minister of Finance. HON. E. KOSTYRA: Thank you, Madam Speaker.

I'll have to review that particular question and consult with my colleague, the Minister responsible for the Manitoba Energy Authority. MR. D. ORCHARD: Madam Speaker, I have a new question for the Minister of Finance. The $500,000 signing authority granted to the Executive Director by the Board of the Manitoba Energy Authority provided contract approval without Treasury Board approval; there was no perusal by Treasury Board or approval required by Treasury Board of any contract signed up to $500,000.00.

Can the Minister of Finance indicate to the House whether that exemption from Treasury Board approval was made at the behest of Treasury Board or did Mr. Eliesen ask for that exemption from Treasury Board authority? HON. E. KOSTYRA: Madam Speake r, that decision was made as it is in the case of all Crown corporations; a practice that is in place for all Crown corporations of the Province of Manitoba. Manitoba Energy Authority Board - access to board meeting minutes MADAM SPEAKER: The Memb er for Pembina. MR. D. ORCHARD: Madam Speake r, a question to the Minister of Energy and Mines.

He took as notice last Friday a question I posed to him of providing access to the Manitoba Energy Authority Board Minutes with - even at his own request - the exemption of any Minutes which might inv olve confidential deals involving energy sales by Manitoba Energy Authority. Would the Minister now be able to provide access to those Minutes with those exemptions in place, so that we can untangle the tangled web that is in place involving signing authorities, attendance at meetings, decisions made, etc.? MADAM SPEAKER: The Ho nourable Minis ter of Energy and Mines. HON. V.

SCHROEDER: Madam Speaker, I indicated previously that the signing authority, in that particular instance, is not as large as in a number of other Crown corporations in government. lt's not something that is unusual. Bloodvein Reserve - housing needs MADAM SPEAKER: The Hono urable Memb er for Roblin-Russell. 1566 MR. L. DERKACH: Madam Speaker, I have a question for the Minister of Northern Affairs.

In view of the fact that some 93 Metis people are presently or very shortly going to be forced from their condemned MHRC housing on the Bloodvein Indian Reserve, will the Minister of Northern Affairs indicate to the House what plans or programs he has in place to deal with the urgent housing and employment needs of these non-status Native people? MADAM SPEAKER: The Honourable Min ister of Northern Affairs. HON. H. HARAPIAK: Madam Speaker, the group that the member for Roblin-Russell is referring to are the Metis people from the Bloodvein Reserve.

They did come to see me on the 12 th of May, asking for a community to be established because they had received notice to get off the reserve. At that time, we told them to go through the normal process, that it would take approximately two years to establish a new community. They said that was not acceptable, so we said we would try and get a permit for them to locate along the Long Body Creek, where they had chosen a site to live. We told them there was no funding for infrastructure and they said, at that time, they did not want any infrastructure.

As long as they had a location, they would look after their own accommodations. So the Department of Northern Affairs has taken out a permit for them and now we have had them come back and fill out the occasional or occupational permits. We received occupational permits just yesterday and now there is CMHC standing there talking to the people from the Bloodvein commun ity at this time. MADAM SPEAKER: The time for Oral Questions has expired. NON-POLITICAL STATEMENT MADAM SPEAKER: The Honourable Member for Thompson. MR. S. ASHTON: Madam Speaker, I would like to ask for leave to make a non-political statement.

MADAM SPEAKER: Does the honourable member have leave? (Agreed) The Honourable Member for Thompson. MR. S. ASHTON: Thank you, Madam Speaker. This past weekend, as members of this House will be aware, Thompson hosted our annual Nickel Days celebration. The highlight of that celebration, Madam Speake r, is the National King Miner Contest.

I'm sure I speak for all members of this House in congratulating the National King Miner, AI Meston, a 15 -year resident of Thompson for his success in that event; and also in congratulating Cliff Morton, the Honourary King Miner; Bob Lowery, the Hono urary Driller, who were recognized for their contribution to the King Miner event and Nickel Days event.

Tuesday, 8 July, 1986 Thank you, Madam Speake r. MR. L. DERKACH: Madam Speaker, I would like to ask for leave to make a non-political statement. MADAM SPEAKER: Does the honourable mem ber have leave? (Agreed) The Honourable Member for Roblin-Russell. NON-POLITICAL STATEMENT MR. L. DERKACH: Thank you, Madam Speaker. In early June of this year, a resident of Manitoba, and specifically of my constituency, embarked on an expedition around the world in a small aircraft. I would like to ask all members of the House to join with me today to pay tribute to one of these constituents, Mr.

Gerald Keating of Russell, who together with a former Winnipegg er, Mr. Dave McCullough, have just returned from a successful trip around the world in a Cessna 41 4. I think that this is a very noteworthy achievement, and I'm very proud to have a resident of my constituency, and particularly of Russell, return from a 24,000 mile expedition around the globe and having returned home safely. Thank you. ORDERS OF THE DAY MADAM SPEAKER: The Honourable Gove rnme nt House Leader. HON. J.

COWAN: Madam Spea ker, before moving the House into Committee of Supply, I'd like to confirm that it's my understanding that the review of ManOil and Manitoba Mineral Resources was comple ted by the comm ittee this morning and, therefore, we will be dealing with the Report of the Manitoba Telephone System in the Comm ittee of Public Utilities on Thursday at 10 o'clock. MADAM SPEAKER: The Honourable Opposition House Leader. MR. G. MERCIER: Thank you, Madam Speaker. I wonder if the House Leader could indicate when he will be calling Interim Supply again. HON. J.

COWAN: I would like to have an opportunity, perhaps with the Minister of Finance, to sit down with the Opposition Ho use Leader and the Opposition Finance Critic to determine the timing of calling it and the order of finishing the consideration of Interim Supply. Perhaps we could do that some time within the next couple of days, and I'd be able to report to the House at that time as to when exactly it would be called. SOME HONOURABLE MEMBERS: Oh, oh! MADAM SPEAKER: The Honourable Gove rnme nt House Leader. HON. J. COWAN: Thank you, Madam Speaker. I will igno re the comments from the Member for Pembina.

I don't believe they are sha red by his colleagues, and I don't want to put them in the position of having to disassociate themselves from those comments as well. I move, Madam Speaker, that Madam Speaker do now leave the Chair and the House resolve itself into a Comm ittee to consider of the Supply to be granted to Her Majesty , seconded by the Minister of Finance.

MOTION presented and carried and the Ho use resolved itself into a Comm ittee to consider of the Supply to be granted to Her Ma jesty with the Honourable Memb er for Burrows in the Chair for the Department of Finance; and the Honourable Member for Kildonan in the Chair for the Department of Industry, Trade and Technologyf CONCU RRENT COM MITTEES OF SUP PLY SUPP LY - INDUST RY, TRADE AND TECHNO LOGY MR. CHAIRMAN, M. Dolin: Comm ittee come to order. We are considering the Estima tes of Industry, Trade and Technology, Page 104.

Before we begin, we have an introductory statement from the Minister of Industry, Trade and Technology. HON. V. SCHROEDER: Thank you, Mr. Chairman. In the Throne Speech in the 19 86 Manitoba Budget Address, the Lieutenant-Governor and my colleague the Mi nis ter of Fina nce, set out some of our gove rnment's economic objectives.

They pointed to the need for government to focus its energies on the areas of greatest concern to Manitobans through job creation and economic development and for sustained economic development to provide jobs, economic security and increased opportunities for women and men throughout the province. In introducing the Estima tes of Industry, Trade and Technology , I intend to demonstrate our response to these needs. On the basis of most economic indicators, it's fair to say that Manitobans can take some considerable satisfaction in the economic performance of this province over the past four and one-half years.

This is not to say that we see no room for further improvement. Canada faced a severe international recession in 1981-82. Interest rates continue to be well above the historic norm. Nevertheless, Manitobans can be proud of the fact that the Manitoba economy has out-performed the national average over this period. Job creation is our most important goal and therefore the most important measure of our success. At present, the total number of people employed in Manitoba is greater by some 30,000 than when we took office in November of 19 81.

This represents a percentage increase of 6.5 percent which compares favourably with the increase for all of Canada, of only 5. 7 percent. Investment is another key indicator. Admittedly, during the recession Manitoba experienced one of the largest declines in total investment, but over the last three years the average increase in total investment was a very healthy 13.5 percent as compared to a mere 2.4 1567

Tuesday, 8 July, 1986 percent for all of Canada. According to the most recent Statistics Canada survey of investment intentions, Manitoba will again surpass the national average by a large margin in 1986. If we exclude the public sector and look only at private capital investment, the record of the past three years is almost the same. The average increase in Manitoba was 13 .9 percent as compared to only 4.6 percent for Canada as a whole. The latest investment intentions survey indicated that private investment in Manitoba will also surpass the national average in 1986.

Overall, private investors clearly consider Manitoba a sound place to invest. I believe one of the best indicators of economic health is found in the statistics of interprovincial migration. Canadians are a highly mobile people and they readily mov e to those provi nces in which the economic opportunities are greatest at any given time. Interprovincial migration data indicate that in every year from 19 61, when the statistics were first collected, to 19 81, Manitoba suffered a net loss to other provinces.

However, for the three years 19 82-84, Manitoba enjoyed a net in-migration from other provi nces because employment and investment opportunities were better here than in most other provinces. In 1985, there was again a net outflow, but it was one of the smallest ever, less than 1, 000 people, and it is accounted for by the strong resurgence of the Ontario econo my. Nevertheless, Manitoba continued to gain people from Saskatchewan and Alberta in 1985. The 1986-87 Estima tes allocation of 8.9 million to Industry, Trade and Technology is comparable to last year.

We've held the line on expenditures in keeping with this admin istration's commitment to a responsible and balanced fiscal policy. This allocation will continue to allow a flexible and diversified package of economic development progr amming. As in the year just past, the department's overall mission will be to foster steady, stable growth in a div ersified economic structure in keeping with the employment, income and human development aspirations of Man itobans. Technological development remains an area of high priority.

The government recogniz es the vital role that technology has to play in sustaining and expanding the di verse ec onomic foundations of our prov inc es. Manitoba, of course, is not going to compete with the likes of Silicon Valley. When it comes to the development and creation of new technology, we must look at those areas where we have a relative advantage. What Manitoba must look toward is the adaptation of technology, the applying, adopting and refining of the fruits of technology creation.

Unde r the Jobs Fund, a number of technology related programs have been success fully launched to broaden the opportunities for businesses and entrepreneurs to gain access to specific technologies. These programs provide a continuum of assistance at different stages of development: assisting research and development, encouraging spin off busi nesses which stem from research and development, providing start-up financing, helping entrepreneurs to develop promising ideas which are appropriate to our resources and location, and promoting awareness and cooperation.

The programs are del ivered by the staff within the Technology Division of Industry, Trade and Technology and include the Technology Com mercialization Program, 1568 the Technology Discovery Program, the Strategic Research Support Program, the Graduate Scholarship Program. The Information Technology Program with support of the Jobs Fund was inaugurated in September of 1985. This industry-government initiative has received in its short life positive reviews locally and internationally as an effective vehicle to advance the understanding and use of information technology.

The program has also been instrumental in identifying and pursuing several inve stment opportunitie s toward the development of an information technology industry. The orientation of these programs is consistent with the long-term approach toward economic development that has been adopted by our government and that is the main mission of the Department of Industry, Trade and Technology. Grant assistance to the MRC supports about half of total Ma nitoba Research Council technology transfers to Ma nitoba indus try.

This is sign ificant in that the majority of costs associated with technology program delivery are offset by contract revenue from private enterprise which obviously values and makes good use of the department's technological capabilities. Industrial development: six development agreements under the Mani toba In vestment Program were negotiated by Industry, Trade and Technology, and financed through the Jobs Fund in 19 85-86, generating $35.4 million of investment and creating or preserving 480 jobs in Manitoba. Objectives for 19 86-87 are to at least repeat this level of activity.

The depa rtment's Hong Kong office will soo n comple te its first full year of operat ion. Actual investment in Manitoba from Hong Kong last year totalled $4.3 million, resulting in 160 new jobs from business immigration activity. The office is currently working on an additional 60 business immigration proposals which, if they materialize, would represent $10 million in investment for Manitoba. Special initiatives have been implemented to attract companies from Minneapolis and Chicago to invest in Manitoba.

Other specific initiatives include a focus on energy-intensive industries and small growth-oriented companies in the Un ited States. Contacts are also being established with selected companies in Israel. In total, including development agreements, the Industry Branch has directly assisted with the creation of over 1,100 new jobs and over $92 million in capital investment in the manufacturing and processing sectors in 19 85-86. Our goal is to attain and surpass this target in 1986-87.

As an example of efforts to refocus existing spending to create viable new investment and permanent high­ value employment opportunities in Manitoba, I would refer you to the department's new Health Industry Development Initiative. Over the long term, we will encourage existing health-related manufacturers to explore new product development opportunities, based on health spending, promote Manitoba as a health industry location, and investigate means by which to improve the quality and productivity of provincial health care services.

In the trade area: Support for export development is an ongoing priority for the department. Resources allocated to the Trade Branch will be maintained in 19 86-87 to support an extensive program of group trade

Tuesday, 8 July, 1986 show exhibits, missions, and cost-shared assistance to Manitoba exporters. Canada, the U.S., Australia, Europe, and Asia are markets where we will continue to be active in support of our diverse manufacturing and service sector. While the majority of these initiatives are organized and managed by the Trade Branch, some are joint projects with Manitoba Agriculture, lnfoTech Manitoba, or the Federal Gove rnment.

With further liberalization of trade anticipated as a result of ongoing negotiations, it is most essential that we continue to strengthen Manitoba's export base and capitalize on the opportunities of world markets. In the area of bilaterial trade negotiations, the department has played a lead role in developing the gover nment's policy with respect to the present trade negotiations between Canada and the United States. We have prepared and released a number of trade­ related impact studies and policy papers to date. These have been used extensively in our consultations with non-governmental interests.

Drawing on research and working in cooperation with other departments, numerous, more detailed sectoral studies are presently under way. We intend to continue our extensive consultations with Manitobans, expecially on detailed issues, as they arise during the negotiation process. One or two members of department staff have been present at every meeting of the Federal-Provincial Continuing Committee on Trade Negotiations, which is chaired by Amba ssador Reisman.

We have used, and will continue to use this forum to ensure that the Canadian negotiating team is as well informed as we can make them of Manitoba's interests. In the area of strategic planning: the Strategic Planning Division is expected to play a key role in conjunction with the Trade Branch and with other departments in the ongoing development of Manitoba's position with respect to the bilateral trade discussions. Since we're beginning to move into a more detailed ph ase of the negotiati ons, this will necessitate increasingly intensive activity over the forthcoming year.

Manitoba has a clear, definite interest in enhancing economic union within Canada as well. lt is expected that the Strategic Planning Division in the department will contribute impo rtantly to the ongoing intergovernmental efforts to promote balanced regional economic devel opment across Canada, to rationalize interprovincial trade barriers, and to improve economic relations between the provinces and territories of Canada.

The Strategic Planning Division will also continue to seek new and improved ways of maximizing the effective and efficient use of the human and financial resources available to gover nment for economic development and employment creation. Opportu nities for new and improved programs or for the redirection of existing programs will continue to be assessed. Additional effort will be applied to the evaluation of both programs and projects in terms of their economic and social impacts.

A development strategy and policy for Manitoba regarding the service sector is in the process of being for mu lated and is expected to mo ve into an implementation phase this fiscal year. As in the past, the Strategic Planning Division will continue to be responsible for administering a number of long -term strategic studies which will be undertaken in support of policy decis ion-making related to economic development. We will also be continuing and extending special initiatives aimed at strengthening gove rnment's relationships with key elements in the bus iness commu nity.

In tabling the 19 86-87 Estimates of Industry, Trade and Technology, I want to conclude by re-emphasizing our commit ment to flexible, long-term economic development prog ramming. Like most jurisdictions in North America, the Manitoba economy is currently undergoing a fundamental restructuring. We're all experiencing an extended phase of accelerated technological change and of shifting patterns of international trade. This is posing a very real challenge for all Manitobans. Furthermore, this is not a challenge that can be expected to dissipate within the next year or even within the next five years.

The main job of Manitoba Industry, Trade and Technology over the remainder of this decade will be to keep this long-term economic challenge in clear focus and to facilitate a smooth transition to a renewed, dynamic and balanced economic structure in Manitoba. This will require both the understanding and the dedication of all components of the Manitoba economy.

Our commitment as a department is to keep our expenditures in line while we work with all Manitobans to ensure that we jointly meet this long-term challenge and create the meaningful employment opportunities desired by men and women throughout this province. MR. CHAIRMAN: Thank you. The Mem ber for Sturgeon Creek. MR. F. JOHNSTON: Thank you, Mr. Chairman. The Minister paints a rosy picture when he speaks about the capital investment in the Province of Manitoba.

We're all aware of the figures showing that the increase in capital investment is there, but it's an increase over probably some of the worst years or bad years that we've had. Although we find ourselves improving at a percentage rate as good as anybody in Canada or better, we also find ourselves lagging behind in man ufacturing investment in this country. This department can take very little credit for the private investment in apartment blocks, housing and things of that nature and, as a matter of fact, not too much credit for the investment in the service industry.

Business, to small business and business development, is probably in the forefr ont of that particular area. The statistics show for June 13 , 1986, from the Manitoba Bureau of Statistics, and has shown this figure all year long, that new capital inve stment in manufacturing in the Province of Manitoba is estimated to be down in 1986 by 4.3 percent.

This department is strictly responsible for investment and manufacturing jobs in this province, which is really the base of the economy of the province because manufacturing jobs are the ones that create the service industries which are the department stores, the clothing industries, etc. Manufacturing is on the base, first of all, with your renewable resources first, which is our 1569

Tuesday, 8 July, 1986 agricultural community; then there are resources, which is our mining commu nity. Then, of course, we want to work to have the manufacturing of those resources done in this province. Then we want to have an attraction of people coming to this province with manufacturing that suits this province's econo my, that suits the labour force of the Province of Manitoba. We have an experience of losing some very good ones, such as Pratt and Whitney, when we are the third­ largest aerospace industry in Canada.

Nova Scotia, not having any aerospace industry whatsoever, was able to attract Pratt and Whitney, with Manitoba coming second. it's obvious that the payroll tax was the reason for that. it's obvious that the labour - (I nterjection) - well, if the Mem ber for lnkster wants to figure the actual payroll tax on a $30 million payroll and how much more business you've got to do in Manitoba to make the same profit as somewhere else, he'd find that they'd have to do about $10 million more a year if they'd been here in Manitoba. Companies don't certainly become attracted to provinces that have that type of a tax.

Labour legislation which is ce rtainly unfair to emp loyers from the point of view of giving the larger union halls more power than they should have. We're finding out, at the present time, that Flyer Industries can't be sold by the government unless a union boss says it can be. We're also finding out that the deficit of the Province of Manitoba is climbing continually, and business people in this country just as late as two days ago were concerned about the Federal Gove rnment's tremendous deficit and who was going to have to pay it.

If the Minister doesn't believe that business takes a look at a profit and looks at their deficit and says to themselves, who's going to pay it, and business is usua lly the first one to be taxed, ma nufac turing especial ly, they say we ll, maybe we 'd better go some where else because we don't want to pay a debt that we didn't have any part of creating. This department with its strategic planning, etc., commu nications, industry trade division, trade division, and technology division, basically, and I repeat as I said before, is there to create manufacturing jobs with new companies or expanded companies.

That, obviously, according to the Manitoba Bureau of Statistics is not going to happen in Manitoba as good as it happened in other years because they show that new capital investment in manufacturing will be down 4.3 percent. The strategic planning, I would say, is a good system and we will probably need it while we're dealing with the free trade. I don't know that the strategic planning has to spend all that much time deciding what the free trade policy was going to be.

I think with Canada and United States, that's a place where the Ministers and the deputies would be more involved than anybody, but they should be working on the strategy of, if there is free trade, what are the best businesses to have in the Province of Manitoba.

I don't see any reports or I haven't seen any strategy put forward since last year or any increase in strategies of this department that is doing anything to attract businesses other than go on the policy that the Minister once criticized, that we take every individual company that we are dealing with and work with them on the basis of whether they're good for Manitoba or not good for Manitoba, and a submission is made to Treasury Board and Cabinet as to whether the gove rnment would do anything to attract the business or not. I don't see any change in that policy whatsoever.

I don't see any funds set up to attract industry. I don't see any books that say anything about tax relief or anything of that nature. I don't see a policy set across the country the same as you will find from some of the states in the United States and some of the provinces in Canada. So it seems to be that the department is sort of groping. What are we going to do next on the basis of what somebody else may or may not do?

We have been losing in Manitoba an industry that is without doubt one of our major ones, and that is the manufacturing industry to supply the farm industry of this province and other provinces. Mani toba was the leader in manufacturing in Western Canada, or at least in the Prairie Provinces, because we were the supplier to the agricultural industry, and through that we grew into being man ufacturing suppliers to many other parts of Western Canada and manufacturing suppliers to parts of the United States. We are gradually losing our manufacturing resource to other provinces.

I see advertisements from Saskatchewan and Alberta saying we're open for business. I only see payroll taxes and unfair legislation and high deficits, etc., which are there to scare off businesses. I see in Saska tchewan programs where there's so much allowed per employee. I take a look at the Ontario programs to attract industry and Ontario and because of the recession, we're going to do something to get it back, and they're doing it.

We had it; we're not getting it back. it's all very well to say that the government is spending more money and private investment is up mainly because interest rates are down for housing, etc. This department is obviously responsible, or would have been responsible, for having a representation or a pavilion at Expo. I know that's a gove rnment decision, but it's turning out to be one that is very bad. Here we are sitting with a small cubby hole - (Interjection) A MEMBER: 15 by 30 feet. MR. F. JOHNSTON: . . . compared to other provinces having people stand around talking to somebody that goes by and comes in.

As we heard today, 15 0 people a day, maybe 300-400 on the weeke nd. That's a tremendous average when you've got 300,000 people going through Expo every day. Why would they stop? Why would they stop when they can stop at the Alberta and Saskatchewan pavilions and go in and see what they manufacture?

Why wouldn't we have gone to a place which was going to be one of the largest trade exhibitions in the world that was designed to attract people from the Pacific Rim to look at what Canada can make, and here we are in Western Canada in a position to take tremendous benefit of those particular purchasers and we're in a little cubby hole of a closet. I've had people come back from Expo and one of them said to me, I was rather ashamed. Several of them, awfully disappointed that we weren't there. My daughter said to me yesterday, dad, I didn't think the fuss that was made about Manitoba not having a 1570

Tuesday, 8 July, 1986 pavilion with Expo was really that much to be concerned about until I was there, until I walked out of Expo ashamed of the fact that Manitoba wasn't able to do what all other provinc es in Canada, except one, was able to do. That's the feeling of the young people of this province that we weren't capable of being up there with the rest of the people in this country.

I sometimes think we might be better off not to have anything there than a cubby hole of a place with a few colours and what have you that says Manitoba on it, not an awful lot better than the displays we put up at exhibitions here in Manitoba or anywhere else across this country. I would wonder if the Minister would want to go out and stand in that booth. Maybe if he did, he'd find out that he would be rather embarrassed when he looked at the other pavilions around the Expo. The Techno logy Division, I don't know what technology is being developed in Manitoba. We played around with the computer industry.

We still have the place out on Ness Avenue and Linwood Street. I'm not quite sure what is coming out of that. I've visited it. lt probably looks to me as if it's a great display centre for manufacturers to display their wares. I don't know the benefit that the Manitobans are getting out of it. Here we were, we were going to move into the computer industry in great leaps and bounds, but it doesn't seem to be happening either.

So this department is just groping around, having fun playing with figures and books and strategies, taking up hours of time writing reports with nothing basic bei ng acco mplished, and that's acc ording to the Mani toba Bur eau of Statistics. Ma nufac turing is expected to be down in Manitoba by 4.3 percent because that is the main job of this department, and to create a situation and work with the industries that they work with to help them sell their products. That doesn't seem to be happening either. So, Mr. Chairman, this department does not take a lot of time to go through the Estimates.

This department is a working department, basically to report on what they have been doing. They don't have any large out­ rea ching situations such as some of the other departments. They don't build hig hways. They don't purchase for the province. They don't do any of those things. They're just there to work to create jobs, and they haven't been doing it in the most important area that they should be doing it. That's all I have to say, Mr. Chairman, except that I say that the statistics that we have from the Manitoba Bureau of Statistics employed in 1981 was 461 ,000 people and, in 1985, there were 480,000.

That's up 19,000. I don't know whether we emplo yed 11 ,000 people between Janua ry 1 and now or not, but it's very doubtful. But I'm sure the Minister has figures and we have figures, but we know that ours come from the Manitoba Bureau of Statistics. So the figures on the employment are doubtful. Thank you very much. MR. CHAIRMAN: Thank you. If staff would like to come forward, we will defer Item 1. (a), Minister's Salary, and begin on Resolution 103, 1. (

b) Executive Support. 1. (b)(1) - the Member for Portage. MR. E. CONNERY: Mr. Chairman, I think when we're starting in right at the very beginning, this would be the area that we would discuss it, the report of the Auditor. The report of the Auditor on Page 36, if you have the Auditor's report, I want to quote from it because I think it's very important that Industry, Trade and Technology is supposed to be the department that is going to help business succeed.

I want to read into the record their own record in their own department. lt says: "We did note some examples of ineffective management information systems this year. We noted that two departments experienced difficulty with the preparation of their expe nditure es timates. The Department of Business Deve lopment and Tourism and the Department of Industry, Trade and Technology have not submitted satisfactory expenditure Estimates data for both 198 4-85 and 19 85-86.

This necessitated Treasury Board support staff in the Department of Finance having to spend considerably more time pulling together sufficient information to enable the Estima tes review process to proceed ." I'd like the Minister to explain how they are going to help industry thrive in the Province of Manitoba when they can't even make their own departments run satisfactorily. HON. V. SCHROEDER: Mr. Chairman, I'm told that the department has worked with the Department of Finance for qu ite some time to resolve the problem.

The department is satisfied that it has resolved the problem, and we believe the Auditor will confirm that. MR. CHAIRMAN: The Member for Portage. Just as a matter of procedure, could the Minister and members please indicate by just raising your hand so I know you're prepared to speak? The Member for Portage. MR. E. CONNERY: The Departments of Industry , Trade and Technology and Business Development and Tourism use a common Finance and Admini stration Branch for both departments. Obviously , I guess that is why both departments have been poor in their Estimates. Is there a change there? Are they separating them?

Are they leaving them together? What's going to happen? HON. V. SCHROEDER: They're remaining as they are. There's just a better reporting mechanism, as agreed to between them and Finance. MR. E. CONNERY: Has this just taken place because, in our discussions with the Auditor and his report, he still wasn't all that happy with what had happened after 19 85-86? HON. V. SCHROEDER: I'm told that it is something that has been evolving right up until very recently, and is continuing to evolve. MR. CHAIRMAN: The Member for Sturgeon Creek. MR. F.

JOHNSTON: I believe this would be the area, because it's not listed, but where are the salaries of the personnel that are at Expo? Are they just different people who are through the different parts of the department who are picked out, or what's happening? HON. V. SCHROEDER: Yes, Mr. Chairman. Those salaries will show for those individuals in their usual area. 1571

Tuesday, 8 July, 1986 MR. F. JOHNSTON: Are all of the people who are working out at Expo from this department? HON. V. SCHROEDER: No, Mr. Chairman. About half of them are from Business Development and Tourism. MR. F. JOHNSTON: The Minister, I know, gave it to us in the House yesterday and some today. That's a rotating situation of so many weeks there and . . . HON. V. SCHROEDER: Yes, Mr. Chairman, there are two permanent officers there at all times and those are the two positions that rotate. There's one STEP student who is there for the whole period. We hired, I believe, a second year or third year law student.

The shift rotation is 4 days on, 2 off, 12 hours a day, 7 days a week for the full 6 months. The showcase is open 10:00 a.m. to 10:00 p.m. seven days a week. They work overlapping eight-hour shifts. What we try to do, given the particular exhibits we have in there at a specific time, we try to ensure that we have the people there from the departments who know those particular industries. MR. F. JOHNSTON: You mentioned there are business people from Manitoba there. Are they there on their own or are they being supported by the gove rnment? HON. V.

SCHROEDER: We have companies such as Bristol, Canadian Bronze, Manitoba Rolling Mills. I believe Versatile was there recently; there are others. I'm just checking to see whether we provided any funding. I'm told that they are there on their own although they're using our facilities. I am told as well that they're paying something for being in our facility. MR. CHAIRMAN: The Memb er for Portage la Prairie. MR. E. CONNERY: The Minister said the exhibits were being changed on a regular basis. On what kind of basis are the exhibits being changed? HON. V. SCHROEDER: Mr.

Chairman, there are themes at different times of the fair. If it happens to be buses, we try to have our bus manufacturers; if it's agricultural, we have some of our agricultural people and so on. We have, just quickly going through the people who are going to be there, Bristol Aerospace, Brandon Ind ustrial Commission, Im perial Clevite, Canadian Bronze Co. Ltd., Indian Crafts and Arts Manitoba lncorpated, Robonics International, Manitoba Rolling Mills, Winnipeg Business Development Corpora tion, Manitoba Energy Authority, den Oudsten, Pembina Val ley Devel opment Corporat ion, Urban Bus Suba greement. MR. E.

CONNERY: What is the size of the booth? HON. V. SCHROEDER: it's about 300 square feet. MR. E. CONNERY: What does that break down to in by what by what? HON. V. SCHROEDER: Is the battery out of your comp uter? I'm sure you can figure that out. MR. E. CONNERY: I converted it. To me, it seems something like 15 by 30 feet is the size of our booth. Is that right? HON. V. SCHROEDER: That sounds fairly big. That's 450 feet. MR. F. JOHNSTON: it's half the size of our caucus room. MR. E. CONNERY: it's awfully small. MR. F. JOHNSTON: Our caucus room is small, yes. MR. E. CONNERY: Yes.

These people go there; now you've got to have some shelving in there, you've got to have a desk, you'v e got to have some chairs. Where is there room for an exhibit in the room? HON. V. SCHROEDER: I suggest you go there and take a look. In the walls there are television sets running a variety of programs, depending on what is being featured, obviousl y. The Rolling Mills exhibit comes along another wall when it happens to be there. This is not a place for people to come and sit down. it's a place to look at the exhibit. If they want to talk, they can talk with the officers on duty.

There's no table there; it might be a nice convenient thing, but keep in mind there are tables all over the place in the building. MR. E. CONNERY: So you're saying, then, the exhibits are video exhibits rather than a physical exhibit because there just wouldn't be room for a Versatile tractor in the room. HON. V. SCHROEDER: Mr. Chairman, having one of those tractors in that room would be, I think, a terrible - it would certainly put a squeeze on the living space of the other exhibits. But there are different ways of exhibiting. The Rolling Mills, as an example, were showing rails.

They had a number of rails in that place and they had set them up in such a way that they were not inconveniencing either officers, passersby or visitors. MR. E. CONNERY: If I read the report right, the people are going down to Expo three weeks at a time and then returning. You're having different exhibits there so you're going to somebody from your department that would correspond with the particular exhibit.

That being the case, how do we get the people going to Expo that are going to be interested in that exhibit at one time, at that time that they're down there, without the space of having a multi-exhibit thing? People wanting to look at a given sector of industry will be going for the full six months. HON. V. SCHROEDER: Mr. Chairman, we basically regard it as a trade show and people are going to be there at different times when a particular theme is on.

If business is intending to come for that particular theme, we will be there with the kinds of Manitoba perspectives that would be appropriate for those particular times. If they come at a different time, in all likelihood, they would not find anything specifically appropriate to their 1572

Tuesday, 8 July, 1986 fields in those other - I shouldn't say anything, but they wouldn't find an awful lot. We have, as an example, a specialized period for urban transit, June 16 to June 30. I understand that's an Expo program proposal so that people interested in that area could program ahead and know that's the time to come. Transportation for recreation happens to be August 25 to 31 so that if we have anything in that area that's when we would be there. You just go through that calendar and it only makes sense to do it in that fashion. MR. E. CONNERY: The last question.

The figures were given that there's less than 150 people per day going through the booth. Our little display office or tourism office right in this Legislature puts through over 300 people a day so that gives you some idea of the traffic. I'm also told that some of the pavilions are having as high as 18,000 people a day, so you can see what a percentage of the traffic that Manitoba is getting. We're down 10 percent in tourism.

While that's not in this department, the industries will also be affected because we're not getting the traffic through so we're not going to be luring the interest and, if we're not interested in business, why would business be interested in us? HON. V. SCHROEDER: Well, that's a pretty cheap shot and something that could be expected.

But quite frankly the exhibitors in that particular building all feel that they are not getting what they had bargained for, none of them, and that includes the other provinces. lt includes all of the exhibitors in that building and they are working with Expo people to solve the problem. Organizers of the World Business Showcase estimated that there were 3,000 to 5,000 people to go through that particular building and we're not talking about the Expo site - this isn't on the Expo site, it's at Canada Place - 3,000 to 5,000 people a day - it's not happening, it's not happening for anybody there.

And what we're doing, we're sitting down with Expo officials and working out better communications, better signage and that sort of thing, so people know that the building is there. As it happens our location is right on top of a staircase where it is much more highly visible than many of the other showcases there. lt is true that it is not one of the largest ones, but it is also true that you don't have to wend your way through a whole number of corridors to find it. And so, if we're having problems, you can be assured other people are having problems too.

There is nothing visually wrong with our showcase and people who go by do tend to pop in to take a look to see whether there is something that interests them. But quite frankly I don't know how many tourists walking by a rail exhibit are going to spend an awful lot of time looking at different railway rails; it's not the most exciting thing. The people who will stop by are the people who are interested in that and who may have some interest in doing business. And you don't have 40 million railway companies in North America; you happen to have very few.

You can count them - they number in the tens on this continent or for that matter on the planet. MR. E. CONNERY: Not having been to Expo, is our office in Canada Place separate from the other pavilions, the other provincial pavilions? HON. V. SCHROEDER: No, our pavilion happens to be within a few feet of walking to Saskatchewan (Pavilion). The only difference is that you don't see the Saska tchewan Pavilion when you come up to the head of the stairs, and you do see the Manitoba Pavilion. MR. CHAIRMAN: (1 )(b)(1) - the Member for Sturgeon Creek. MR. F. JOHNSTON: Mr.

Chairman, when the Minister says it's a cheap shot to say to the people that if we're not interested in business why should they be interested in us. I suggest that it isn't that cheap a shot or that bad a shot because we don't show all of the world in this particular case - and I say the world because 1 sat in the audience at a First Ministers' meeting in Regina.

When the discussion of Expo came up and the Premier of B.C. stated that he hoped everybody would be in, the Prime Minister of Canada excelled on this was going to be one of the best trade shows and start the ball rolling, so to speak, tor Canada and all of Canada, to be selling products to the world that would keep Canadians working. At that time he said to the Premier of B.C. that he'd hoped everybody would be there but he would have to have discussions with the Premier of the Province of Manitoba.

With all of the research, you've got this planning group studying the effects of having a good pavilion at Expo for Manitoba products, estimating the amount of business that would come in. I'm told some of the pavilions are paying, they're not losing; they're going to end up break ing even after the expenditure because they went to the trouble of doing something to attract the people to look at their products.

Why would Manitoba, and I fully realize that the Premier said that it was $6 million that he didn't want to spend, and that's two years ago, but since he said that all of the studying and everything that has been put forward as to the success and the amount of people who were going to go through Expo were obviously disregarded by the government and decided that we would not have Manitobans hold their head high. If the Minister thinks that's a cheap shot - hold their head high when they go through Expo because they have a pavilion there.

What are the costs of this pavilion for the time of Expo with the people who are going to man it, etc. going to be? HON. V. SCHROEDER: Mr. Chairman, I understand the cost to us will be in the range of $200,000.00. I think that those comments by the mem ber, where he refers to the trade show, make a good deal of sense, and that's where we are. But we'r e not on the fairgrounds. You'r e catching people who are out there to have a good time, maybe see a little of the more exciting pavilions, and you're in there competing with pavilions that are in the tens of millions of dolla rs.

And a pavilion for $6 million from Manitoba, we were told by our staff, when we were considering this issue, would be something we would not get a return on our investment for, and we looked at it strictly on the basis of whether we were going to get a return on our investment for Manitoba or not. The area where we felt there was a potential was specifically in that trade show area where we would 1573

Tuesday, 8 July, 1986 get a larger proportion of business people, people coming for the various themes that are up at given times. And that is the area where we feel we can get a return on our investment.

We decided instead of putting money into Expo and into the glitz in British Columbia, that if we're going to have that kind of thing and encourage tourism and so on we would be looking at things in Manitoba, like the IMAX, which I think in the long run is going to be an investment which will be far better for the people of Manitoba, in terms of tourism, in terms of business, in terms of our population, than anything we would have put up there on a short­ term basis for a six-month fair in British Columbia. MR. F. JOHNSTON: $200,000, the cost of the booth.

You're saying that all of these people can be there, you can rent the apartments. We'd have airplane fares. What is Expo going to cost? I think the Minister gave me maybe the rental of the booth, but the rental of the booth is one thing, but then there's the cost of the booth and the cost of operation, etc. What is the cost of Expo? HON. V. SCHROEDER: There is one additional expense that isn't shown here, but I had indicated previously that the salaries of the individuals who are going to be on-site are shown within their department. But I will give him the numbers.

Accommodation for these people for that period of time is $9,000; site passes are $2,600; exhibit space, $76,050; exhibit construction, $60,000; transportation, $9,540; contract wages, $15, 000 - sounds pretty good for six months, not a bad job; per diem expenses, $12, 600; subtotal, $18 4,790, and a contingency of $1 5,2 10 , for a total of $200,000.00. MR. E. CONNERY: Your airplane tickets, were these economy or are there seat sale tickets at this time of the year? I know that traditionally gove rnments don't buy on a seat sale ticket. HON. V. SCHROEDER: Mr. Cha irman, they're on excursion fares. MR.

CHAIRMAN: 1. (b )(1) - the Member for Sturgeon Creek. MR. F. JOHNSTON: The addition to the costs, then, are the salaries that are buried throughout. Of course, those people, when they're working out there, wo n't be working here, but I will admit that they're working in the trade area. What, approxim ately, would those salaries be for the people that are out there? HON. V. SCHROEDER: Mr. Chairman, just some quick arithmetic. We would estimate that the average salaries of those officials would be in the range of $45,000 per year. Two people for six months would be one staff year, about $45,000.00. MR. F.

JOHNSTON: Under Salaries of the Minister's department here, how many people does that involv e now? HON. V. SCHROEDER: There's 19 staff years. MR. F. JOHNSTON: Nineteen staff years. How many people is that? HON. V. SCHROEDER: I think my staff was giving me stuff for Vancouver again. MR. CHAIRMAN: We're looking at 1. (b)(1) . The Member for Sturgeon Creek. MR. F. JOHNSTON: The Salaries, of the $14 1, 200, how many people is that in the department? I must admit that I moved from Expo to this. HON. V. SCHROEDER: Could you repeat the question so that we have it clear exactly. MR. F.

JOHNSTON: The Executive Support for the operations of the Minister's office, and the Deputy Minister's office. HON. V. SCHR OEDER: Four people, Mr. Chairman. MR. F. JOHNSTON: Now, that's two secretaries and an Executive Assistant. What is the other? Or am I right in that? HON. V. SCHROEDER: Yes, and the Deputy Minister. MR. F. JOHNSTON: Where is the major part of the department? Does it still exist in the accommodation that it has had, or has it been moved? HON. V. SCHROEDER: Mr. Chairman, we haven 't increased our space in the last while.

There was some consolidation over at Lakeview, 15 5 Carlton, between Business Development, Tourism, and Industry, Trade and Technology, in order to better accomplish the work of both organizations, and they seem satisfied with that. MR. CHAIRMAN: The time being 4:30, I'm going to interrupt proceedings for Private Memb ers' Hour. We will reconvene at 8:00 p.m. SUPP LY -FINANCE MR. CHAIRMAN, C. Santos: Committee please come to order. This

section of the Committee of Supply has been dealing with the Estimates of the Department of Finance. We are now on Item No. 2.(c), Treasury Division, Payments re: Soldiers' Taxation Relief. The Mem ber for Morris. MR. C. MANNESS: Mr. Chairman, within the whole second

section of these Estimates, last night we spent a considerable time, from our viewpoint, trying to find out how the dynamics associated with Manitoba Properties Inc. worked such that there would be a $59 million allocation shown in a different part of the Estimates. The Minister has very kindly offered staff time for further explanation. Before I take up that offer, I would ask the Minister whether his department, in a very simplified fashion, can tell us where this $59 million goes. Mr. Chairman, I understand that $37 million of it goes to the people who've invested $400 million. it's an appropriation; it's a cash tossed to gove rnment. 1574

Tuesday, 8 July, 1986 Can he or his staff tell us in a simplified fashion where the additional $22 million is directed, where they show up as a receivable in some other part of the Estim ates? Well Mr. Chairman, I realize that there is an overlap of years here between our fiscal year and the fiscal year-end of Manitoba Properties Inc., but nevertheless, I'm looking for the principle at work here, not the absolute dollars. I'm looking for the principle at work as to where that extra $22 million goes, how it shows up as another factor or as another entry within the Estimates.

Then , I believe my colle ague, the Memb er for Pembina, has some specific questions to the annual reports as put forward by the Manitoba Properties Inc. covering their year-ends. I don't think we want to go into it in an awful lot of detail here. After that creative time , if there is still some misunderstanding, or if there is still some lack of understanding on our part, then we may be prepared to entertain the Minister's offer to meet with staff. HON. E. KOSTYRA: Mr. Chairman, again, as I indicated, I did provide members with the statements for both years.

I think the member did make reference, I didn't hear, but we talk about different time frames between what is in appropriation and what shows on the books of Manitoba Properties Inc. and obviously that can't be reconciled for members. If the mem bers want, we can have staff available to sit down with them and go through the details. If you look on the Statement of Income of the Janu ary 31, 1986 report, it shows that the net revenue that year was just over $39 million for rent, $8 million for interest.

The money that is paid back to the province is the interest on the long-term debt which was approximately $1 6.8 million. In terms of the payment on the preferred shares, the dividends, that shows up further on in the report dealing with the Statement of Cha nges in Financial Position - those pages aren't numbered but it's two pages hence - which shows under Financing, midway down the page, dividends paid on preferred shares, which is $33.7 million. MR. D. ORCHARD: That $33,706,000 is also on the Statement of Retained Earn ings which ind icates dividends on preferred shares. Mr.

Chairman, in purusing the financial statements of Manitoba Properties Inc., several questions come to mind. First of all, if we plot the financial position and the tax liability position of Manitoba Properties Inc., through fiscal year'85 to fiscal year '86, we find that in fiscal year'85 there was a carried -forward tax benefit of almost $300,000 which led us to a net taxable position of some $8,497,287.00. Can the Minister indicate to me - on the Statement of Income it says "Deferred Income Taxes" - when do these income taxes become payable and represent a cash outflow for Manitoba Properties lnc? HON. E.

KOSTYRA: The tax will never be payable because the projections are, with respect to the depreciation, the capital cost allowances will be such that there will be no tax payable. The only time there would be a tax payable is if the assets were sold. MR. D. ORCHARD: So then, Mr. Chairman, given that answer, is one to assume that we are permanently locked into Manitoba Properties Inc. as a result of this effort to take advantage of federal taxes; i.e., we cannot sell the buildings from the holding companies (

a) and (

b) back to the Province of Manitoba at any given time because at that point in time we would then trigger all of the income tax which would be deferred as long as we have the depreciation account? The moment we sell those buildings back to the Province of Manitoba, where they were before, and wind down Manitoba Properties Inc., we trigger all this deferred income tax. So is that a fair assumption that we are now saddled forever with Manitoba Properties lnc? HON. E. KOSTYRA: No.

If the properties are sold back to the province at a net of the depreciated value, then there would be no penalty and no impact and the province could return them back at that value. MR. D. ORCHARD: Mr. Chairman, there is some confusion, when I go through the retained earnings statement for the fiscal year January 31, 1985. Once again the pages aren't numbered but it's the Statement of Retained Earnings on the second financial page, wherein the retained earnings in the line, excess of consideration received over the stated value of the issued common shares.

In other words, the common shares are worth a buck, but you've got, theoretically, excess value in the build ings which have not be subscribed to; that value has not been subscribed to by the preferred shareholdings, so you've got a value in there, an excess value of 209,246,896.00. Now, in the financial notes it indicates - and I'll go to the financial notes in the Financial Note 4 in the 1986 statement -it indicates that on January 31, 1985, the common shareholders directed that the contributed surplus on hand be transferred to retained earnings.

Now I run into some considerable confusion in attempting to plot what has happened here, because if we go to the Retained Earnings Statement of the 1986 Annual Report, we find that the $209 million, in ballpark figures, is theoretically, if I understand the transaction correctly, transferred to retained earnings as Note 4 from the 19 86 Financial Report indicates, but yet retained earnings only reflect the value in the 1986 balance sheet of $17 4,200,000 roughly. There appears to be some slippage.

Now I don't kn ow whether that's depr ec iation deducted there, or what sort of a financial transaction took place to eliminate the $209 million as it appeared in the 1985 year-end Statement of Retained Earnings, to end up with $174 million in 1986? HON. E. KOSTYRA: I wish these pages were numbered, it would be easier to ensure that I get the right page for the mem ber. I believe he has a slightly different document than I have in terms of the 1986 one. I believe I gave him the actual auditor's copy. We'll supply you with this.

The only difference is there's a covering page, which is the President's Report, in the actual document which I'l l forward to him. But in any case, if he would turn to the fourth page in that document. MR. D. ORCHARD: The fourth page of actual numbered statements? 1575

Tuesday, 8 July, 1986 HON. E. KOSTYRA: Yes, and its entitled, "Ma nitoba Properties Inc. Statement of Retained Earnings for the year ended January 31, 1986." There it shows the reconciliation of that $209,246,000, which is shown as a transfer from contributed surplus and shows the reconciliation that brings it down to the $17 4,19 7,000, at the end of January 31, 1986. MR. D.

ORCHARD: I believe that reconciliation was still part of - if I can find it - yes, that was part of the report I studied last night. lt still doesn't adequately demon strate, unless I'm missing something, how for instance, if you just go from the statement that you've just quoted from, the balance at the beginning of the year, net income, transfer from contributed surplus, Note 4. You transferred $209 million. You had a beginning balance of $19 9 million. Theoretically, you've transferred - ok ay, I think it's coming clear now.

What was transferred was the net figure of $19 9 million, plus the net income, less the dividends, to get - okay, fair, that's good enough. Now, can I ask some questions on another area? First of all, can the Minister indicate, in terms of the income, the revenue - pardon me - Statement of Income, in the revenue line, there is an $8.5 million, rough ly, interest income. Can the Minister indicate the source of that interest income? HON. E. KOSTYRA: Those are short-term deposits and would be the Government of Manitoba. MR. D.

ORCHARD: The Man itoba Properties Inc. has sold preferred shares issues - and we'll talk in rounded millions - of $400 million. They also have as of January 31, 1986, cumulative borrowings, or advances from the province of $378 million - no, I'm on the wrong line, I'm sorry. Here we are, sorry, I was on the wrong line. Notes Payable, Province of Manitoba, Note 2 in the 1986 Financial Statement. You've got $1 82.5 million of advances from the province.

Now to me that would indicate that if you did the logical thing, and you added the $400 million that the preferred shareholders have invested to the advances from the province you'd have $582 mill ion in total work ing capital of Man itoba Properties Inc. Presumably the government has utilized a substantial portion of the $400 mi llion that the preferred shareholders invested in Manitoba Properties Inc.

Are we to assume that Manitoba Properties Inc. is on the one hand, paying interest to the government on roughly $1 82.5 mil lion of advances and notes payable; and then some of those funds they aren't using so they put it back into short-term deposits with the government and earn interest. so the net interest cost is somewhere half of the $16.7 million that's reported on that Statement of Income. Is that what's happening? HON. E.

KOSTYRA: That interest payment shown in the 19 86 of just over $8 million will be a one-year phenomena because it was as a result of having excess funds at the beginning of the year as a result of the transactions. That will not be a recurring situation, so there will not be the apparent anomaly that the member is talking about with respect to interest out and interest in, in subsequent years. 1576 MR. D.

ORCHARD: We'll wait till next year to see how the statement shows, because then theoretically next year with all transactions complete as of January 31 , 1986, or virtually; then the next one should be a relatively clearer statement to understand. Mr. Chairman, I want to ask a couple more questions and I don't want to spend too much more time on this because we have spent a considerable time already. But in terms of Note 2, where you're dealing with the Notes Pay