Manitoba Hansard — 8 May 1997 (Sitting 42B, 36th Legislature, 3rd Session)

36-3-42b

Manitoba — Debates (Hansard)

Third Session - Thirty-Sixth Legislature of the Legislative Assembly of Manitoba DEBATES and PROCEEDINGS Official Report (Hansard) Published under the authority of The Honourable Louise M. Dacquay Speaker Vol. XLVII No. 42B -1:30 p.m., Thursday, May 8, 1997 ISSN 0542-5492

Member ASHTON, Steve BARRETT, Becky CERILLI, Marianne CHOMIAK, Dave CUMMINGS, Glen, Hon. DACQUAY, Louise, Hon. DERKACH, Leonard, Hon. DEWAR, Gregory DOER, Gary DOWNEY, James, Hon. DRIEDGER, Albert DYCK, Peter ENNS, Harry, Hon. ERNST, Jim EVANS, Clif EVANS, Leonard S. FILMON, Gary, Hon. FINDLAY, Glen, Hon. FRIESEN, Jean GAUDRY, Neil GILLESHAMMER, Harold, Hon. HEL WER, Edward HICKES, George JENNISSEN, Gerard KOWALSKI, Gary LAMOUREUX, Kevin LATHLIN, Oscar LAURENDEAU, Marcel MACKINTOSH, Gord MALOW A Y, Jim MARTINDALE, Doug McALPINE, Gerry McCRAE, James, Hon. McGIFFORD, Diane MciNTOSH, Linda, Hon.

MIHYCHUK, MaryAnn MITCHELSON, Bonnie, Hon. NEWMAN, David, Hon. PENNER, Jack PITURA, Frank, Hon. PRAZNIK, Darren, Hon. RADCLIFFE, Mike, Hon. REID, Daryl REIMER, Jack, Hon. RENDER, Shirley ROBINSON, Eric ROC AN, Denis SALE, Tim SANTOS, Conrad STEFANSON, Eric, Hon. STRUTHERS, Stan SVEINSON, Ben TOEWS, Vic, Hon. TWEED, Mervin VODREY, Rosemary, Hon. WOWCHUK, Rosann Vacant MANITOBA LEGISLATIVE ASSEMBLY Thirty-Sixth Legislature Constituency Thompson Wellington Radisson Kildonan Ste.

Rose Seine River Roblin-Russell Selkirk Concordia Arthur-Virden Steinbach Pembina Lakeside Charleswood Interlake Brandon East Tuxedo Springfield Wolseley St. Boniface Minnedosa Gimli Point Douglas Flin Flon The Maples Inkster The Pas St. Norbert St. Johns Elmwood Burrows Sturgeon Creek Brandon West Osborne Assiniboia St. James River East Riel Emerson Morris Lac du Bonnet River Heights Transcona Niakwa St. Vital Rupertsland Gladstone Crescentwood Broadway Kirkfield Park Dauphin La Verendrye Rossmere Turtle Mountain Fon Garry Swan River Portage Ia Prairie Political AtTiliation N.D.P. N.D.P. N.D.P. N.D.P. P.C. P.C.

P.C. N.D.P. N.D.P. P.C. P.C. P.C. P.C. P.C. N.D.P. N.D.P. P.C. P.C. N.D.P. Lib. P.C. P.C. N.D.P. N.D.P. Lib. Lib. N.D.P. P.C. N.D.P. N.D.P. N.D.P. P.C. P.C. N.D.P. P.C. N.D.P. P.C. P.C. P.C. P.C. P.C. P.C. N.D.P. P.C. P.C. N.D.P. P.C. N.D.P. N.D.P. P.C. N.D.P. P.C. P.C. P.C. P.C. N.D.P.

2451 LEGISLATIVE ASSEMBLY OF MANITOBA Thur sday, May 8, 1997 The House met at 1:30 p.m. ROUTINE PROCEEDINGS PRESENTING PETITIONS Mobile Screening Unit for Mammograms Ms. Rosano Wowchuk (Swan River): Mr. Deputy Speaker, I beg to present the petition of Gladys Bugg, Elsie Green and Sylvia McCharles that the Legislative Assembly of Manitoba request the Minister of Health (Mr. Praznik) to consider immediately establishing a mobile screening unit for mammograms to help women across the province detect breast cancer at the earliest possible opportunity.

PRESENTING REPORTS BY STANDING AND SPECIAL COMMITTEES Committee of Supply Mr. Gerry McAlpine (Acting Cha irperson of the Committee of Supply): Mr. Deputy Speaker, the Committee of Supply has considered certain resolutions, directs me to report progress and asks leave to sit again. I move, seconded by the honourable member for Pembina (Mr. Dyck), that the report of the committee be received. Motion agreed to. MINISTERIAL STATEMENTS Flooding Update Hon. Glen Cummings (Minister of Natural Resources): Mr.

Deputy Speaker, I would like to report that the levels of the Red River have declined from half a foot to one foot at Ste. Agathe to Lockport in the last 24-hour period. The large decline in levels was due to strong northerly winds which has reduced outflows from Lake Morris. Levels at Morris and St. Jean remain unchanged from yesterday. The level at Letellier, however, has risen half a foot due to wind action. Strong wind action is pounding heavily on dikes today, especially those dikes that are not sheltered from the north side.

At Selkirk, we have seen a drop of about a third, but at Breezy Point the strong northerly wind is causing some increased levels. At Grande Pointe, the wind is helping to reduce the water levels, and they have seen it recede by three-quarters of a foot. With yesterday's rainfalls, the level of the Red, however, will continue to fall. Their influence will not be noted. Additional rainfall could occur, however, on Saturday and Sunday with another incoming weather system.

If the rainfall from this disturbance exceeds one inch, many smaller streams in the Red River Valley and east to the Ontario boundary could rise but should remain below the extreme levels that we have experienced recently. As a note of interest, Mr. Deputy Speaker, I would like to point out that the flows at Emerson today are still 6,000 cfs more than they were at the peak levels last year. I think for the general populace, that puts in context the enormity of the volumes of water that have been coming north in the Red River.

Levels of the river continue to rise slowly mainly as a result of yesterday's 20 millimetre to 40 millimetre rainfall in the Winnipeg river system. We are seeing some concern. Nutimik Lake this morning was at 906.7, which is only one and a third feet lower than the crest that they experienced in 1992. It is possible that this lake could rise to 907 by Sunday, and cottagers along this river are reminded to take appropriate action to protect their docks and their boathouses. Of course, we want boaters to stay off of this river particularly because of the dangerous currents and the debris that are in the river. Hon.

Frank Pitura (Minister of Government Services): Mr. Deputy Speaker, just an update for the members. With the Manitoba Emergency Management Organization, as part of their recovery process, the MEMO disaster financial assistance office is operational. Inspectors are in the field, and office staff

2452 LEGISLATIVE ASSEMBLY OF MANITOBA May 8, 1997 are responding to inquiries and accepting applications for assistance. Canadian Armed Forces that are involved in part of the recovery and re-entry process will be supportive in areas of re-entry and recovery. In re-entry, representatives of the Red Cross, Salvation Army, Mennonite Central Committee and Manitoba Government Services will take the lead role in co ordinating the activities of the flood relief committee. A meeting has been scheduled for today, and I understand that meeting is now completed. The re entry committee now liaises regularly with the flood relief committee. *

(1335) Evacuees: The total evacuees as of May 7 was 25,115 of which I 8,816 received assistance from reception areas. For the Roseau River First Nations, limited access is now available to Roseau utilizing a ferry, a military raft capable of carrying 30 persons. The armed forces and the Highways engineers have inspected the 800 metres of damaged

section of road and have established that any kind of temporary bridge would not be possible at this time, so the ferry process will continue until work can be done on the road. Consumer and Corporate Affairs have now started to take a role in the flood recovery process, and they have taken the following actions to reduce the probability of consumer scams: They have prepared and distributed public information material on potential scam artists, and they have also released advice on action a consumer may take to ensure credibility of a contractor. They have issued media releases warning the public.

In Agriculture, Agriculture is presently identifying those farmers and the financial needs which may not be covered under the OF A. With MEMO, the Manitoba Emergency Management Organization is continuing to operate its office on a 24- hour, seven-day-a-week basis. Under disaster financial assistance, a committee comprised of representatives from Finance, legal counsel, Rural Development and MEMO is reviewing and developing criteria for issuance of advance funds for hardship cases. The local authority will have direct involvement in confirmation and identification of individual applications. That is my update, Mr.

Deputy Speaker. Mr. Stan Struthers (Dauphin): Mr. Deputy Speaker, just briefly to add our voice to the support that this Legislature shows to the people who are actually out there doing and participating in the monitoring of dikes and the eventual cleanup of the mess that will be left in the wake of the flood of I 997.

I noted in the update provided by the Minister of Government Services the number of evacuees that have been affected by this flood, and it brings to mind the number of volunteers who have worked with these evacuees to make their transition back and forth out of their homes into temporary residences and back into their homes again so much easier. I also noted two cautions on behalf of the Minister of Natural Resources (Mr. Cummings) that I would like to add our voices to, and that is that one to the boaters and the people who will be using the Red River in the near future.

For their own safety, I would hope that they would heed the caution from the minister in terms of boating. Not only is there debris and such things on the river that could be dangerous, but I think we have enough problems with the wind and the waves without exacerbating that problem. I would hope that people do heed the warnings of the minister in that case. Mr. Deputy Speaker, that is all I think I need to say at this point. Introduction of Guests Mr.

Deputy Speaker: Prior to Oral Question Period, may I bring the attention of all honourable members to the gallery where we have seated with us today the Home Educating Network and Support, twenty-five Grades 1 to 6 students under the direction of Mrs. Susan McCulloch. This school is located in the constituency of the honourable member for Radisson (Ms. Cerilli). On behalf of all members, we welcome you here today. *

(1340) May 8, 1997 LEGISLATIVE ASSEMBLY OF MANITOBA 2453 ORAL QUESTION PERIOD Disaster Assistance Deductible Mr. Gary Doer (Leader of the Opposition): We have been raising the issue of compensation for the unfortunate victims of the 1997 flood. Last week, of course, we raised the issue of the limit which the government agreed to change from $30,000 to $100,000, which we think is appropriate. The last couple of days we have been raising the issue of deductibles and their relationship to the policy of dealing with items on a depreciated-value basis.

Yesterday I asked the Premier this question because it is our view that the 20 percent deductible plus the depreciation policy of the provincial government are two forms of deductible. Has the Premier looked at the impact of those two policies together, and does he not agree that the impact of both will provide an undue hardship to some of the unfortunate victims of this tragic flood? Hon. Gary Filmon (Premier): I thank the honourable member for his question, Mr. Deputy Speaker.

I point out that this is a program that provides payments by the taxpayer at large in circumstances of natural disasters, and as such is a payment that is made without any premiums having been paid. So if we were to compare it to insurance policies, people would normally pay premiums to get that kind of coverage. Then, as well, people would also have deductibilities in many of their insurance coverages. Certainly we know that there are varying deductibilities on our homeowners' policies that provide for certain deductibles for glass breakage, other deductibles for other forms of peril.

Under all those circumstances, we have to try to take into account the broad consideration of what this was intended to do. The program was not to provide for insurance for people when there are no premiums being collected. It was to provide an opportunity to restore people into some semblance of being able to continue their lives. It was not intended to pay fully for all of their costs or all of their losses. It never has been interpreted that way, and as such, in the past it has paid claims on a similar basis.

For instance, if somebody has carpeting that is worth $1 OS a square yard, they would not be compensated for that. They would be compensated for what would be considered to be normal carpeting, something in a more modest range. So it has always been that way that nobody suggests that for somebody who is paying no premiums that they should somehow be left better off after the disaster than they are before the disaster. That is why I think I would urge all members to look at it in a way that it has been before. It existed this way over decades.

So, when the member opposite was in government and payments were made, it was made on a similar kind of analysis and in fact similar guidelines. The only difference is that we have now increased the maximum amount in recognition of the fact that the claims will undoubtedly be higher this year, the maximum amount has gone from $30,000 to $100,000 for payment. Mr. Doer: Mr.

Deputy Speaker, I understand the Premier being frustrated with the federal government, that for two years has totally denied any of the disaster assistance programs here needed in Manitoba, and now of course appears with all these promises and cheques. I understand that frustration, but I want the Premier to take a step back and look at the existing policy. It has changed. The previous policy allowed for discretion in terms of the replacement of items and the discretion that officials had. We have double-checked this with the people in the disaster assistance branch.

The new policy that was printed in April of '97, which included the $30,000 which was amended by the government last week, and I think wisely so, to $100,000, makes it very clear that items will be replaced and mandatorily replaced on the depreciated value. That, in combination with the deductible, if you take a couple of examples of a five-year-old hot water heater worth $500, you will get approximately $200 to replace it with the deductible. A 1 0-year-old furnace would be almost one-third as much of the value with the depreciation value that is in the new manual circulated by the provincial government.

Does the Premier (Mr. Filmon) not think then the deductible is already onerous when you have the mandatory policy of depreciation? In fact, depreciation is a form of deductibility. Insurance does have the provision to replace a furnace or a hot water heater. This flood compensation package does not. Will the

2454 LEGISLATIVE ASSEMBLY OF MANITOBA May 8, 1997 Premier therefore look at the deductible in relationship to the policy as it applies to people that are hard hit by this flood? Hon. Frank Pitura (Minister of Government Services): In the policy manual, it does indicate that furniture and appliances would be valued at their cash value today.

I think that, in regard to this whole policy, one has to remember that the disaster assistance program, the main mandate of this policy across this country and in agreement with the federal government-when a disaster strikes, it is the role of this disaster program to be able to repay or help out and give assistance to the level that was there prior to the disaster taking place. *

(1345) We have that format and that policy taking place at all levels of government in this province. For example, a municipality loses a bridge; they will get compensation based on putting that bridge back in as it originally was. A lot of municipalities are saying: We would like to put an enhanced bridge in that is better than the last one. They have to pick up that cost themselves.

So, with regard to appliances in a house that are destroyed by flood, it behooves the program to be able to say to those people: We will replace the value of that furniture and appliances at the value that they were so that you can at least replace those with the same kind and be no worse than you were prior to the disaster. Also, Mr. Deputy Speaker, the quote from the Winnipeg Free Press on Thursday, May 8, where "Insurers wholeheartedly agree that paying replacement insurance would be a mistake. '"If the government gives replacement insurance, it would be the best thing that happened to those homeowners.

It would be a windfall, and that's wrong,' said the broker." That is the answer to that question. Flood Relief Donations Mr. Gary Doer (Leader of the Opposition): We are not proposing enhanced values for the losses. We are not suggesting that. We are proposing that the deductible be dropped because we already have a deductible, in essence, with the depreciated value under the new policies of this provincial government. That is what we are saying to the government. You have a deductible, which is going to be onerous; you have depreciated values, which are going to be onerous.

That is a double whammy on flood victims. That is what we are asking you to consider, not enhanced values. I would further like to ask the government: What is the government's policy to deal with the tremendous generosity that we have received all across Canada? In the guidelines that were circulated, it mentioned that their policy would be articulated on page 8 for these contributions. Unfortunately, in the manual, we could not see a policy on the treatment of these tremendous, generous donations that came from all across Canada.

Can the government specify today how those contributions will be used in terms of its application for flood victims? Hon. Gary Filmon (Premier): Mr. Deputy Speaker, I want to make the point that Autopac, if you were to insure an automobile-<:ertainly, having had some experience with it, I know that if you have a 1990 automobile and you have a total loss of that automobile due to the accident, they do not replace it with a 1997 automobile. They give you the depreciated value less the deductibility. So that is precisely the same circumstance that we are facing in this instance.

That is exactly what the Autopac insurance does. They give you the depreciated value less the deductibility. An Honourable Member: You can get insurance for that. Mr. Filmon: But these people have paid absolutely no premiums. An Honourable Member: Wrong analogy. Mr. Filmon: It is a great analogy. These people have paid absolutely no premiums. In the Autopac case, you pay premiums to boot- Mr. Deputy Speaker: Order, please. Could I ask the honourable members to refrain from entering into debate. At this time the honourable First Minister is attempting to answer the question, and I would ask the

May 8, 19 97 LEGISLATIVE ASSEMBLY OF MANITOBA 2455 honourable First Minister to put his answers through the Chair. The honourable First Minister, to continue. Mr. Filmon: With respect to the flood relief funds-and I believe it was announced today that there is a committee that has been set up under the aegis of the Red Cross, chaired by the Canadian Red Cross Manitoba branch president, Blair Graham, who is a solicitor in the province. There are people, including, I believe, the Archbishop of the Roman Catholic Church and many others, and they will be making decisions as to the utilization of the funds.

One of the considerations, I believe, that they will have is with respect to hardship cases for people who are unable to be able to make ends meet with the payment of the money that is available to them through the disaster assistance program. All of those things will be reviewed, and they will certainly be looking for appropriate cases in which that funding that was so generously provided by people from across Canada will be put where it is most needed. Introduction of Guests Mr.

Deputy Speaker: Before we continue, could I bring the attention of honourable members to the gallery, to the loge to my right where we have with us today the former member for Minnedosa, Mr. Dave Blake. On behalf of all honourable members, we welcome you here today. *( 135 0) Flooding Crop Insurance Mr. Deputy Speaker: To continue, the honourable member for Swan River. Ms. Rosano Wowchuk (Swan River): Thank you, Mr. Deputy Speaker. When the flood disaster assistance program was signed last week, it included payments for farmers who are unable to seed.

Compensation at a similar level is available through Manitoba Crop Insurance, and many farmers have protected themselves against such a disaster by purchasing insurance. Can the Minister of Agriculture indicate what the implications of this announcement of payment will be on Manitoba Crop Insurance clients? Does it mean that those people who took insurance will get a double payment, or does it mean that those people who chose not to take crop insurance will be the ones that will be compensated under this new program? Hon. Harry Enos (Minister of Agriculture): Mr.

Deputy Speaker, I believe the honourable member for Swan River clearly puts on the record the questionable problems that arise when fast, ad hoc, perhaps election driven decisions are made with respect to compensation. As I indicated before, upwards to 90,000 acres of land that are currently underwater have unseeded crop protection-and I might say, considerably better than that offered in a province like Saskatchewan. Our payments are of the order of $40 an acre,

whereas in Saskatchewan they range from $25 to $30 an acre. These are issues that obviously are being looked at very seriously by the co-ordinating committee that will be looking at and assessing all of the damage. I am satisfied that the agreements that my Premier (Mr. Filmon), the government of Manitoba and Ottawa have with respect to overall damage in the agriculture field are outside of the crop insurance program and it is certainly true that there will likely be or could be instances where a special review of the programs available to farmers will have to be considered.

But it is too early-even I say this today, although the weather is not all that great out there today-to write off the Red River Valley crop. Farmers in the Red River Valley have shown a tremendous capability of surviving disasters of this nature and getting the bulk, if not a major portion, of the cropland sown. Ms. Wowchuk: Mr.

Deputy Speaker, since the federal government has been so quick and so generous with their money during this flood, will the Minister of Agriculture be looking at the possibility of addressing the many outstanding issues of flood compensation, such as we had in the Assiniboine Valley and the Swan River Valley where they could· not get compensated because they had the insurance program under the provincial government? Will he be looking at addressing those outstanding issues and looking at

2456 LEGISLATIVE ASSEMBLY OF MANITOBA May 8, 19 97 compensation for those farmers retroactively, since they also suffered very great losses and the federal government appears to be quite generous? Mr. Enos: Mr. Deputy Speaker, again, my honourable colleague the member for Swan River asks responsible questions. These are very much on my mind and of concern to this government.

In addition to those that she mentioned of farmers suffering loss in the upper Assiniboine in 19 95, we know and she knows that we have upwards of 400, 500 cattle producers who have been hurt because of high levels of water in the Lake Winnipegosis and around Lake Manitoba reaches that have equally suffered. Particularly with the use of Lake Manitoba and the Portage diversion, certainly it was made plain to me that we are contributing, as we save other areas of the province, to those high levels of water that have inundated many thousands of acres of native hayland.

So these are all issues that we have to deal with. I am looking forward to working with my colleague the Minister of Government Services (Mr. Pitura), looking at whatever support the federal government is providing, and we welcome it all-into longer-term resolutions of the difficulties that agriculture faces under these circumstances. Hopefully, within a relatively short period of time, we will be able to announce some of those programs. Mr.

Deputy Speaker, allow me also to welcome, while I am on my feet, the action of our principal farm organization, the Keystone Agricultural Producers organization, that have just today announced the creation of an additional fund specifically dedicated to agriculture. I am pleased to see that some of the major stakeholders in agriculture have commenced contributions to that fund. Again, that will be, as those other funds that the Premier (Mr. Filmon) alluded to, specifically used to fill in some of the gaps, some of the cracks maybe that governmental support programs will have difficulty in covering.

Rural Stress Line Funding Mr. Deputy Speaker: The honourable member for Swan River, with her final supplementary question. Ms. Rosano Wowchuk (Swan River): Thank you, Mr. Deputy Speaker.

Since the Minister of Agriculture is so generous and so supportive right now of our ideas, I want to ask him then whether he will also consider the importance of outreaching to the many farmers and rural Manitobans who are in need of supports, emotional supports, and need of having a way to reach them, and whether he will consider ensuring that the stress line that was once in place will again be in place so those people can get the supports they need. * (1 355) Ron. Harry Enos (Minister of Agriculture): Mr. Deputy Speaker, now the honourable member for Swan River is taking advantage of my inherent good nature.

I acknowledged that she does ask responsible questions on behalf of agricultural concerns from time to time, but I think the issue that she now raises has been very thoroughly and properly addressed to the question that she directed to the First Minister just yesterday. Flooding Impact on School Divisions Ms. Jean Friesen (Wolseley): Mr. Deputy Speaker, in areas affected by the flood, there has been considerable disruption for teaching, for days in school and for school buildings.

The Minister of Education has issued some guidelines to schools and divisions dealing with exams, dealing with counselling and a number of other issues. I wanted to ask the minister today if she could tell the House what changes she anticipates to provincial funding for school divisions which have been directly affected by the flood. Ron. Linda Mcintosh (Minister of Education and Training): At this time we have not received any formal requests for adjustments to funding due to the flood.

We are anticipating that we may receive a request for some additional assistance regarding transportation, which we are quite prepared to address when that comes in, but aside from that we have not been given any indication in terms of damage to buildings, et cetera.

May 8, 19 97 LEGISLATIVE ASSEMBLY OF MANITOBA 2457 Ms. Friesen: Could the minister tell us whether she is keeping track on an overall provincial basis of the extra costs to school divisions, those not affected by the flood but which have had students involved in assisting in fighting the flood, costs such as the minister mentioned, for transport, for supervision, for gasoline and ones which certainly will have an impact on already tight budgets of many school divisions? Mrs.

Mcintosh: In answer to the first question, I was referring to divisional expenses where they have had flood damage, and I understand the second part of her question is a legitimate question as well. We have, Mr. Deputy Speaker, been given indications so far-we have had one division ask if they would be able to submit a bill for additional costs. We are taking a look at that, but by and large the majority of divisions have assumed this and have stated to us that they are assuming this as part of their opportunity to be of service to flood victims.

So we do not expect that there will be a request from divisions that have taken in host children, because they have indicated very clearly and through the president of MAST that this is not an obligation, this is an opportunity to be of service. That is a statement coming from the president of MAST and the kind of indication we have had from school divisions who deserve praise and commendation for going that extra mile for flood victims who are students. Mr. Deputy Speaker: The honourable member for Wolseley, with her final supplementary question. Ms.

Friesen: I would like to ask the Minister of Government Services-who I know would want to join with us in acknowledging the tremendous role that Manitoba students have played. Their cheerfulness, I think, their discipline, their sense of accomplishment is very evident on every sandbag line, and I wonder if the minister could tell us whether those school divisions which have incurred extra and unanticipated costs as a result of sending those students to the sandbag lines, whether they will be able to apply under the public sector provisions for compensation. Hon. Frank Pitura (Minister of Government Services): Mr.

Deputy Speaker, the specifics that the member asked for with regard to students, I do not have specific information on that part of the disaster assistance funding, but I will get that information for you. Adoption Services Privatization Mr. Doug Martindale (Burrows): Mr. Deputy Speaker, the Minister of Family Services appointed a committee to review The Child and Family Services Act, and one of the major changes is a new adoption act. One of the significant issues that was addressed by presenters was the length of time for processing adoptions.

I would like to ask the Minister of Family Services why she chose to contract out adoptions instead of adding more resources to existing adoption staff in Child and Family Services agencies, given that there is a surplus of $400 million in the rainy day fund. Why did she choose to contract out this service instead of augmenting existing services? * (1 400) Hon. Bonnie Mitchelson (Minister of Family Services): I thank my honourable friend for that question.

I want to offer to him the opportunity to sit down with both opposition parties, in fact to go through in detail some of the changes to legislation that will be made so that they are completely up to speed on what we are doing and why we are doing it.

I want to say that many, many Manitobans who are on the waiting list for adoption, that want to increase the size of their families or have a family if they are unable to, use the private system of adoption through nonprofit agencies today, and they are finding that the arrangements they can make through that system, along with the work that is done very proactively with birth parents and with the prospective adoptive families, is a very positive experience for all.

Many Manitobans who made representation to the committee indicated that they preferred this kind of a service, and they wanted to expedite the process. I think in the best interests of the children that need permanency planning and permanent homes that this is a very positive option that has been adopted in many provinces right across the country.

245 8 LEGISLATIVE ASSEMBLY OF MANITOBA May 8, 19 97 Mr. Martindale: I agree that there should be given more priority and a speedier process, but why has the minister and why has this government chosen to privatize adoption? What is possibly the rationale for going that route, when the minister did have other choices? Why is she privatizing the adoption of children? Mrs. Mitchelson: Again I thank my honourable friend for that question. I want to indicate to him quite clearly that we are moving very much in the direction that New Democratic British Columbia adopted when they modernized their adoption legislation.

So it is being recognized by governments of all political stripes right across the country that things need to be changed, that adoption needs to be modernized. I want to commend the government in British Columbia, the New Democratic government in British Columbia for sort of giving us some insights into the direction they have taken and how positive it has been. Mr. Deputy Speaker: The honourable member for Burrows, with his final supplementary question. Mr.

Martindale: I would like to ask the Minister of Family Services why this major change in this new adoption act from a previously free service provided by the government, paid for by taxpayers, why this major change to a user-fee system? Why is this minister privatizing, contracting out and introducing user fees for the adoption system? Mrs. Mitchelson: Again I thank my honourable friend for that question.

I do want to indicate that the changes we are making to the child and family services legislation are in fact to ensure that there are early permanent plans for children so that children have the benefit in the most efficient and effective manner of a permanent, loving home. An Honourable Member: Why user fees? Mrs.

Mitchelson: I think that if my honourable friend and his colleagues took the time to look at and examine very carefully what his cousins in British Columbia have done, they have in fact gone the same direction and have in fact the very same fees in place to allow easy and very quick opportunity for children to be matched with permanent, loving homes. Flooding-Cleanup Provincial Sales Tax Revenues Mr. Gary Kowalski (The Maples): My question is for the First Minister.

With the amount of money coming in from federal taxpayers in the form of disaster assistance into the province because of the need for all of the home renovations, the infrastructure programs and stuff, I imagine there will be an increase in provincial sales tax revenues. Has the Finance minister looked at the increase in the surplus that will result from the additional provincial sales tax that will be going towards the renovations, the infrastructure programs and the other things that have been used to fight this flood disaster? Hon.

Gary Filmon (Premier): I think that the member should be careful to look at, in a balanced way, all the potential impacts. We know, because we have a number of companies that have had to shut down as a result of the flood circumstances, some of them have been made public here in the House: Motor Coach Industries, Maple Leaf Foods, Westfield Industries in Rosenort and so on and so forth, that there will be a loss to the GOP of the province and, indeed, to the income of the province by virtue of these people being unemployed and unproductive for, in some cases, I would think as much as a month or more.

There will be other instances in which, on the agriculture side, if people even are given minimal compensation for inability to produce crops, there would be a loss of the total crop production value in this province as a result of this, and that obviously will impact on the provincial Treasury in a negative way.

It is possible that there will be some impacts on the other side with reconstruction and all of that, but, looking at provincial values here and provincial responsibilities here, we are in the tens of millions for sure that will come out of the Treasury in order to help in the recovery costs of infrastructure and so many things, even after there is some federal sharing and other ways in which that might be mitigated. We have to look at it in the total picture and until our costs are known-and we certainly do not know how

May 8, 19 97 LEGISLATIVE ASSEMBLY OF MANITOBA 2459 many bridges are going to have to be replaced until we see the water levels go down and we can examine those and have them structurally anal yzed. So I would say that we do not want to start counting blessings at a time when I still think that there are many, many areas in which the province will be suffering, and we want to try and have an analysis of this and try and be able to do the right things in the circumstances. Mr.

Kowalski: Can the First Minister provide us with that analysis as soon as possible so we know if the coffers of Manitoba are going to increase as a result of this disaster while private individuals suffer from this disaster? Will we receive that analysis that shows whether the province has had a net gain or net Joss in its coffers from the provincial sales tax and the income tax, provincial income tax that will come from a result of the increased economic activity from fighting this flood? Mr. Filmon: I am sure, Mr.

Deputy Speaker, that many Manitobans will be interested in the anal ysis of how the flood will affect us in the long term, and so, when that information is availa ble, we would be happy to share it. Disaster Assistance Government Policy Mr. Depnty Speaker: The honourable member for The Maples, with his final supplem entary question. Mr.

Gary Kowalski (The Maples): Can the First Minister tell us why the analogy of insurance has been constantly used for flood as opposed to charity from people from across Canada being used for helping Manitobans, and why we are using the analogy of insurance as opposed to helping those in need as a form of charity? Hon. Gary Filmon (Premier): In fact, Mr. Deputy Speaker, what we are attempting to do is demonstrate that there are various ways in which a person could look at it.

We recognize that this is, in effect, through the disaster assistance program, an ex gratia payment by all of the taxpayers of Manitoba being transferred to individuals who suffer significant Joss as a result of a natural disaster. What we have been saying, though, is that these payments should not be more generous than they might have gotten if they were taking insurance for that protection, and that is the kind of comparison that we are making.

As I have said before, there are choices that are made by people with respect to lifestyle, moving outside of the protection of the works that have been constructed with hundreds of millions of dollars of investment for ring dikes, primary diking systems, the Red River Floodway, the Portage diversion, all of those things that were invested in to provide for that security for people at taxpayers' expense, and then other people have chosen, for their own purposes and with I think the full knowledge of some of the risks that they face, to go outside of that flood protection and are then saying, well, that this is the responsibility of somebody else to pay.

So I think you have to try and be balanced and fair in making those anal ogies, and that is all that we are attempting to do. We certainly are lis tening to all points of view, and I accept the advice that is being given by all members opposite. * (1410 ) Man Globe Project Director-Compensation Mr. Jim Maloway (Elmwood): Mr. Deputy Speaker, my question is to the Deputy Premier. This government has a double standard when dealing with ManGlobe employees. In addition to large salari es and liberal travel allowances, management employees were given shares in this company.

Can the minister confirm that when Karen Alcock left her job in Lloyd Axworthy's office to become the ManGlobe project director, in addition to her salary of$7,500 per month plus GST, she was also given share options in the company? Hon. James Downey (Minister of Industry, Trade and Tourism): Mr. Deputy Speaker, that question would be well asked of the management ofManGlobe and/or of Mr. Axworthy, whom he has referred to, and/or of Mr. Alcock or Ms. Alcock. There is certainly a wide range of people, but we were not involved with the management of the company.

2460 LEGISLATIVE ASSEMBLY OF MANITOBA May 8, 19 97 Mr. Maloway: Well, since the province did require a management team of its- Mr. Deputy Speaker: Order, please. Can I ask the honourable member to pose his question. There is no need for a

preamble on his second question. Mr. Maloway: Will the minister check with the board of ManGlobe and determine what other perks and considerations Mrs. Alcock got with this job? Mr. Downey: Mr. Deputy Speaker, as I have made reference to over the past number of months on the

preambles that I have heard about this question, again it would be imp ortant that the member ask the management of this company. We have participated in support of the ManGlobe project, of which the management team was appointed and assembled through the discussions and agreement with the other financial partners, of which one was the Manitoba Telephone System, the Royal Bank, Canada Post, and make no apologies for the fact that the company was supported and is still operating and is hiring and employing people and doing the work that it was anticipated to do. Partnership Agreement Tabling Request Mr.

Deputy Speaker: The honourable member for Elmwood, with his final supplementary question. Mr. Jim Maloway (Elmwood): My final supplementary is to the same minister. This minister approved the board appointment, it approved the management hiring and the government ordered Duncan Jessiman to, quote, see that this deal gets done. Will the minister table a copy of the multilateral agreement drawn up by Duncan Jessiman? Hon. James Downey (Minister of Industry, Trade and Tourism): I do not accept the comments that were made by the member that Mr. Duncan Jessiman was ordered to make sure that the deal was done.

I have indicated to the member-[in terjection] Well, if the member has all of this information, what is he taking the time of this House for in asking the question? I guess it is a matter of the House deciding how much of a priority it is when he has this information in his own caucus when he continues to bring this before the Assembly. I have no difficulty in answering questions, in dealing with a matter; in fact, I will be quite prepared to not only deal with this issue but a lot of the loans that were made and never paid back under the previous administration, of which he was a part.

We will get into that as well as we get into Estimates. Disaster Assistance Deductible Mr. Men'in Tweed (Turtle Mountain): Mr. Deputy Speaker, it is my understanding that the deductible for disaster assistance used to be a flat rate, and my question is for the Premier, if he could advise the House: What was the flat rate? Could I ask: What was the flat rate? When was the minimal deductible amount for disaster assistance changed and by whom? Hon. Gary Filmon (Premier): Mr. Deputy Speaker, I thank the member for that question, and I have here an

article from the Winnipeg Free Press dated April 3, 19 87, in which it is announced by the then Minister responsible for Disaster Assistance Board, Harry Harapiak, I think who is known well to the member for Swan River (Ms. Wowchuk). It announces changes to the previous practice of setting the maximum deductible on all disaster claims at $250, and the amended policy provides for one deduction of either $250 or 25 percent of approved costs, whichever is greater. So as a result, a claim that was worth $1 0,000 previously had carried a $250 deductible, now carried a $2,500 deductible.

Similarly a claim of $30,000 which had a $250 deductible was raised then to $7,500. Furthermore, the then Minister Harapiak announced that the amendment was retroactive-this was April of '87-all the way back to May I of the previous year so that it took into account the flooding that had been experienced in the 19 86 spring flooding. He retroactively reduced the compensation that was eligible to all those people. He said at the time that this was to make a fairer system, fairer compensation. Disaster Assistance Deductible Mr.

Gary Doer (Leader of the Opposition): The members opposite may think it is funny, but I have the

May 8, 19 97 LEGISLATIVE ASSEMBLY OF MANITOBA 246 1 old policy which requires replacement of essential items like fridges, stoves, heavy clothing. The new policy signed by this Premier does not make it mandatory to replace essential items like fridges, stoves, hot water heaters and allows for depreciation. Can the Premier please tell us: Why is he misleading the public and not having people get replacement of essential items like fridges, stoves, hot water heaters? Why has he changed the policy and misrepresented the past policy? Point of Order Mr.

Deputy Speaker: The honourable government House leader, on a point of order. Hon. James McCrae (Government House Leader): Mr. Deputy Speaker, under the circumstances, I can readily understand the sensitivity of the Leader of the Opposition, but that is no excuse for suggesting the Premier has misled anybody. That is clearly unparliamentary and ought to be withdrawn. Mr. Deputy Speaker: Order, please. The honourable Leader of the official opposition, on the same point of order. Mr.

Doer: On the same point of order, I think it is incumbent upon any government backbencher who is asking a question to their own First Minister, having exchanged conversations before they ask the question, to quote the actual policy on essential items versus the changed policy that he made. I would ask the Premier to answer questions about representing properly the past policy and the present policy. That is all the people want to know, and what they really want to know is: How does this affect their daily lives now? Will their fridge be replaced, will their stove be replaced?

How will this affect them because there used to be a difference between luxury items and essential items? *

(1420) Mr. Deputy Speaker: Order, please. Now before we continue, the honourable Leader of the official opposition had risen to speak to the same point of order which he did not speak to. I do believe he had another point of order which was not a point of order. It was a dispute over the facts. The honourable government House leader rose to speak to the point of order on the use of the word "mislead." It is a point of order if he had said this deliberately, but he had not. So you did not have a point of order. * * * Mr. Deputy Speaker: The honourable First Minister, to answer the question. Hon.

Gary Filmon (Premier): The Leader of the Opposition is embarrassed in getting caught in his own web of hypocrisy, Mr. Deputy Speaker, but this is precisely what this indicates, is that there used to be a policy of a flat $250 deductibility and they increased it to 25 percent deductibility. Their minister, Mr. Harapiak, increased it to 25 percent deductibility which he said was in the interests of more fairness in the program. So they ought not to be talking about the deductibility as being an issue. They are talking out of both sides of their mouth. Mr. Deputy Speaker: Time for Oral Question Period has expired.

NONPOLITICAL STATEMENTS Flooding- Volunteerism Mr. Kevin Lamoureux (Inkster): May I have leave to make a nonpolitical statement? Mr. Deputy Speaker: Does the honourable member for Inkster have leave to make a nonpolitical statement? [agreed] Mr. Lamoureux: Mr. Deputy Speaker, I wanted at this point to acknowledge that high school students across Manitoba played a major role in the battle against the rising waters of the Red River. However, I wish to bring to the special attention of the House the efforts of the students of Sisler High School.

Their enthusiasm and hard work in the fight against the flooding of the Red River has been nothing less than exceptional. The eager willingness of Sisler High students to serve in

2462 LEGISLATIVE ASSEMBLY OF MANITOBA May 8, 19 97 their community was exemplary of the can-do attitude displayed by all students in Manitoba during the flood crisis. The students of Sisler High School went above and beyond the call of duty in helping their fellow citizens, and, on that note, I congratulate all staff and students of Sisler on a job well done. (Mr. Gerry McAlpine, Acting Speaker, in the Chair) Mr. Jack Penner (Emerson): Mr. Acting Speaker, would I have leave to be able to make a nonpolitical statement? The Acting Speaker (Mr.

McAlpine): Does the honourable member for Emerson have leave for a nonpolitical statement? [agreed] Mr. Penner: I too would like to rise today to express my deepest gratitude to all those Manitobans who have opened their hearts to residents of my constituency, residents ofthe Red River Valley and indeed residents of other parts of the province who have faced probably one of the largest disasters that we have encountered in this century and maybe during the entire past of this province.

I want to express also my gratitude to some of the people that I saw, first of all, on the dike line in an effort to stem some of the damages that we have heard discussed here as of late in this Chamber. I saw a young mother with an eight-month-old baby on her back for two weeks straight carry sandbags to help alleviate damages to her neighbour's property, and I saw an 80-year-old man work eight hours straight handling sandbags who ended up in a hospital after that, Mr. Schmidt from Bergthal, because he became sick and he gave of himself to help his neighbours.

That kind of dedication is seldom ever seen in this province and is unprecedented.

We, in the Red River Valley, those of us who were part of the flood and the disaster, truly extend our appreciation not only to those two people but to the high school kids, to all the service organizations, to the tremendous volunteer effort, to the fire brigades, the municipal councils, to the Chambers of Commerce, the business people that gave of their equipment and, indeed, many of them that supplied food for two weeks straight, a grocery store in my hometown, Penner Foods, and they gave it freely, and to the armed services and to the RCMP and to our Departments of Natural Resources and Agriculture and Highways and all the other departments, Government Services, and the employees of our government.

To them I take my hat off because they served unfailingly and some of them 24 hours a day when the need was there. That, in my view, Mr. Acting Speaker, and all members of this House, was true dedication of employees of this government and indeed our armed forces. Many of our armed forces members put their own lives at risk to help others. Many of our municipal people who are volunteers put their own lives at risk to help others. That kind of effort I have seldom ever witnessed.

I, as a member of this Legislature, invite all members and colleagues in this House to take off our hats and pay tribute to that kind of volunteerism and effort that was extended during this last two- or three week period. Thank you very much. *

(1430) ORDERS OF THE DAY (Continued) House Business Hon. James McCrae (Government House Leader): Mr. Acting Speaker, I would like to announce that the Public Utilities and Natural Resources committee will meet on Tuesday, May 13, 19 97, at ten o'clock in the forenoon to consider the Annual Reports of the Manitoba Public Insurance Corporation for the fiscal years ending October 31, 19 94, February 29, 19 96, and February 28, 19 97. Mr. Acting Speaker, I think that is all before I move, seconded by the honourable Minister of Culture, Heritage and Citizenship (Mrs. Vodrey), that Mr.

Acting Speaker do now leave the Chair and the House resolve itself into a committee to consider of the Supply to be granted to Her Majesty. The Acting Speaker (Mr. McAlpine): I would like to make this announcement, that the Public Utilities and Natural Resources committee will meet on Tuesday, May 13, 19 97, at 10 a.m. to consider the Annual Reports of the Manitoba Public Insurance Corporation

May 8, 19 97 LEGISLATIVE ASSEMBLY OF MANITOBA 2463 for the fiscal years ending October 31, 19 94, February 29, 19 96, and February 28, 19 97. Motion agreed to. COMMITTEE OF SUPPLY (Concurrent Sections) CONSUMER AND CORPORATE AFFAIRS The Acting Chai rperson (Mr. Peter Dyck): Order, please. Will the Committee of Supply please come to order. This afternoon, this

section of the Committee of Supply meeting in Room 255 will resume consideration of the Estimates of the Department of Consumer and Corporate Affairs. When the committee last sat, it had been considering item 5.3 .(

a) Insurance Branch on page 25 of the Estimates book. Ms. Jean Friesen (Wolseley): Yes, at the end oflast time, I think we were exchanging history lessons and getting somewhat from the topic. I certainly apologize for that and hope to move this along a little faster, although I think that what we were saying was not necessarily so irrelevant to the issue. I want to read, first of all, a letter from a constituent on the issue of insurance.

It is a constituent who lives in the area north of Portage not far from the University of Winnipeg, and she wrote this to me last year and said, about six months ago she was told by her insurance company that they would no longer cover the house for theft and fire as there had been a break-in in the last three years. Her house is currently protected by a monitored professional alarm system, and other precautions, the obvious ones of bars, et cetera, have been taken against further break-ins.

The family has thus had to tum to another insurance company which would cover them against fire but not theft and has found that their payments have doubled. My constituent asks and I quote, why do we have insurance if we cannot ever make a claim if we get broken into? Why, after all these years, have we paid all this money to this insurance company if we cannot ever feel any sense of ease knowing we have protection? Why is our government not doing anything about these insurance companies' behaviour?

What is going to happen to other people in our area who cannot afford to pay the same amount of insurance that is being asked of us? Why are we, victims of a crime, being persecuted by these companies and when is this going to change? I think what that does is express very clearly the frustrations that I tried to express to the minister yesterday from many different parts of the riding of people who have established Neighbourhood Watch, who work with each other to create the kinds of institutions that will improve and maintain neighbourhoods.

I quote it because the minister-and I believe he is reflecting very accurately the concerns or the beliefs of the insurance companies in this respect-believes that such issues are really symptoms of a broader issue which is poverty and, in part, he is right. But I want to reiterate my concern that there are also causes here and that the role of the insurance companies and the inability and the difficulties that they are placing in the path of people like my constituents are also partly the cause of the deterioration of inner city neighbourhoods. It is not just a symptom of one aspect of poverty.

I want to make that point clear, and I also want to suggest to the minister that although I am here speaking on behalf of a number of my constituents who have made this point over the last several years to me, that we also have similar issues in Point Douglas. The member for Point Douglas (Mr. Hickes), I believe, has certainly dealt with previous ministers on this issue, as well as the member for St. Johns (Mr. Mackintosh) who also faces many similar issues.

Both of them are involved in different aspects of the Legislature today and are unable to be here, so I want to add their names and their constituencies to the range of issues that the minister must consider. I want to speak directly about redlining. I think we face many difficulties in getting the insurance

2464 LEGISLATIVE ASSEMBLY OF MANITOBA May 8, 19 97 companies and the insurance industry to admit that they redline districts, and yet to my constituents who are not visited by inspectors, who are not dealt with on the issue of their individual claims or lack of individual claims, it seems very clear that the only alternative that the companies are pursuing is a system of classifying houses and clients by the area in which they live and indeed by a very large area Postal codes are quite large areas in my constituency because we are a very densely populated area, so the postal code redlining is certainly an issue that I would say the majority of the people in my constituency believe is happening.

I understand the insurance industry denies it. * (1 440) I do not know what the minister's position is on this, but I know that he has said that he will be meeting with the industry very shortly, and I would like him to give me an assurance that he is going to deal with this issue and to report back to the Legislature or to the opposition in some way and that he is going to give us some assurance that redlining is not condoned by this government and that the insurance companies are aware of that.

I do not know what form that would take, whether it is minutes from the meeting, whether it is a letter from the minister to the insurance industry confirming that that discussion took place or whether it is the participation of members of the opposition in a meeting such as that. I think a final issue that I wanted to raise with the minister was one that he, I think, brought up yesterday, but he brought it up in the context of his own experience with Hutterite colonies. It was the issue of co-op insurance. It seems to me that there may be a possibility there.

I know that yesterday we talked about the scale of the Hutterite co-ops and the commonalities that they have which have enabled them to do that. It seems to me one of the roles that government might have, in fact, is to enable some form of co-operative insurance to be possible in the inner city. Now, in previous years, when this has been brought up to me, the whole issue of redlining, I have tried to deal with the Social Planning Council, and I know that staff of the minister have also been involved with the Social Planning Council in a committee that they established to look at the issue of redlining.

At that committee, Mr. Hanson, whom you will be talking with was also involved and certainly understands from the Social Planning Council the impact of this on the whole society of inner city Winnipeg, but also the Social Planning Council did discuss the issue of co-op insurance. They looked at it to the extent of defining the amount that would be required; a minimum of $50 ,000 bond must be posted and a minimum of $3- million asset base which can be in the form of loan guarantees. This could form a core base for an insurance pool.

It is possible also-and I know that we are being followed by the Department of Industry, Trade and Tourism. You do also deal with co-op development to some extent, and I know that the Social Planning Council in its discussions at which I think your staff have been present-! would have to check whether they were actually present at that particular meeting. As I check my notes here, I do not think you were present at that particular meeting where the option of co-op insurance was discussed, but you may well have received the minutes as participants. It is the meeting of-if you wanted to look it up-March 19 , 19 96.

At that meeting, it was suggested that some research and feasibility studies for forming such a company for dealing with co-op insurance in the inner city might be formed, and that might be something which governments take on.

So I think to sum up, three things I am suggesting to the minister: First, that he pursue that which has been suggested by the Social Planning Council; secondly, that he indicate the government's position both in this committee and to the insurance industry on redlining; and that he be aware of and convey to the insurance industry that redlining and the absence of insurance for parts of the inner city are indeed part of the cause of the deterioration of parts of the inner city, not just a symptom of a broader issue. Hon. Mike Radcliffe (Minister of Consumer and Corporate Affairs): Mr.

Chairman, for the purpose of the record, I want the record to show that I have taken some rather detailed notes of my honourable colleague's remarks today, and I thank her for those remarks. I think they are made with some significant degree of insightfulness and obviously compassion and caring.

May 8, 19 97 LEGISLATIVE ASSEMBLY OF MANITOBA 2465 I can confinn, as we discussed yesterday with my honourable colleague, that I will be meeting with leaders in the insurance industry in Winnipeg in the very near future, and I can undertake to her that I will be bringing to the agenda the issue of redlining as she has defined it here today, redlining by postal code areas of the city and, in fact, by what appears to be to the constituents in her areas the inability of these individuals to obtain appropriate property and liability insurance or fire insurance in areas of the city as designated by their postal code, having nothing to do with the track record that they may have on insurance claims, having nothing to do with all the other components that we discussed yesterday, which I will not take the time to recite at this point in time.

I can tell my honourable colleague that the lack of availability of insurance is a matter of some significant concern to me, and I will also be researching the minutes of the Social Planning Council as she has indicated. I have made note of the date, and I will be causing my departmental people to do some research with regard to the feasibility and following up, which I guess is an outgrowth of the Social Planning Council comment.

I would just add for the record as well, and I do not want to digress too substantially, but in the Hutterian communities, although there is a commonality of theology to a large part, they are as diverse as the outside world in many, many ways. There are rich colonies and there are poor colonies. There are hard working colonies and there are others that are not so motivated.

When one is able to clear the farm gate inside one of those colonies, one finds a cross-section of society represented just the same as we do in many of our communities in the city, albeit of a similar racial stock, but nonetheless beyond that, I would confinn to my honourable colleague that there are many, many great diversities amongst the Hutterian communities, and to their credit they have been able to overcome many of those sorts of hurdles to come up with some of the infrastructure they have, so that give me support and encouragement that perhaps this is something we might be able to transfer, concepts that we might be able to transfer into some other areas of the community, and I would thank my honourable colleague.

Ms. Friesen: Mr. Chainnan, I thank the minister for taking note of all of that and very accurately, but one further aspect is the matter of the minister reporting back on each of these issues. How will that be done? I do not necessarily want to suggest deadlines, but I think it would be very helpful for my constituents to know this summer of this and also the fonnat of the report back. Mr. Radcliffe: I would propose that I would be replying, in writing at least, to my honourable colleague with the products of the meetings that I will be able to have with the members of the insurance industry.

As support for my presentation, could I ask the honourable colleague if she would be so kind as to supply me with a copy of the correspondence, even if she blocks out the name of the individual constituent because she may not have pennission to forward, to publicize that letter. I would appreciate it as a pro forma example, and I would propose to use it as an example of what has been presented to me as the problem. I would leave that question with my honourable colleague and perhaps she might want to consult with her constituent and advise. * (1 450) Ms. Friesen: Yes, that is a reasonable request.

I will search my records for the original record of the letter from that particular constituent, but I should note for the minister that the

section I read, or the quotation, was actually addressed on January 4, 19 96, to his department to a previous minister. So he should be able to find it in his files, but I will check for the fuller letter and see whether my constituent would allow that to be forwarded. Mr. Radcliffe: '96 or '97. Ms. Friesen: The date on the letter I sent to the Honourable Mr. Ernst, Minister of Consumer and Corporate Affairs, was January 4, 19 96. Mr. Jim Maloway (Elmwood): Mr. Chainnan, I have a few questions for the Insurance Branch and, after that, we have to deal with the co-op development section. Then we have to deal with the Public Utilities Board

2466 LEGISLATIVE ASSEMBLY OF MANITOBA May 8, 19 97 and then we are nearly finished. Okay, just so you have the order there. I want to begin with the Insurance Branch, by asking the minister about the vanishing premium policies in life insurance, that was, they were widely sold throughout Canada and the United States since 19 60.

There have been a number of lawsuits, a myriad of lawsuits, resulting because over the years the promises of eventually paying no premiums because the investments would make up what the premiums would have been, did not materialize and so I understand there are lawsuits right across the country. I want to know how many there are in Manitoba and what stage they are at and what companies, which life insurance companies were selling these products here. Mr. Radcliffe: Mr.

Chairman, my director tells me that, in fact, we have had possibly four to six inquiries in Manitoba on this issue of vanishing premium life insurance policies. There are no lawsuits of which we are aware in Manitoba. This is a matter that is being monitored, I am told, quite closely by the Canadian Council oflnsurance Regulators. We have a file on this topic in the Insurance office. There were a number of mediated settlements, I am told, between the corporations and the particular individual claimants or people who were interested and involved.

I am told that this is in fact a significant problem in the United States of America but has not been anywhere near as large a problem in Canada. Mr. Maloway: I sent a letter to the former minister on June 17 , 19 96, asking him about a recent CBC story regarding the failure to tum over insurance premiums to insurance companies. At that time it occurred to us to recommend a bonding system to protect consumers. It is the case in Ontario where the agencies are required by law to carry a bond of $1 00,000. If it solves the problem there, then why would it not solve the problem here?

I asked him to get back to me with any further developments. Of course I think there were more developments in his bailiwick since I wrote the letter, and he is no longer here. This was June 17 , 19 96, if you want to just take a quick look at it and then just update me on what you are doing.? Mr. Rad cliffe: Mr. Chairman, I can advise my honourable colleague that as a result somewhat of the letter of the honourable colleague Mr.

Maloway and also the scrutiny of the department that in fact there was a reaction within the department that the superintendent has been working with the general liability insurance council in Manitoba and that a survey of all the general agents was done. Now I believe that the honourable member for Elmwood was an insurance agent. I do not know if he still is active- Mr. Maloway: I am as active as you are being a lawyer. Mr.

Radcliffe: -in the business of insurance, although I know that once an insurance agent always an insurance agent and that insurance agents do not have anywhere near the overhead that we poor, starving lawyers do and that they can sell policies in government buildings and out of government buildings and in offices. Mr. Maloway: That was Gerry Ducharme you are talking about. Mr. Radcliffe: Ah, well.

But in any event the consensus of the industry seem to be in comparing the remedy of bonding versus errors and omissions was to rely on errors and omissions policy and to make it a general rule with general insurance agencies that they all carry errors and omissions for fraudulent acts. Of course the reason for that was that the errors and omissions gave a wider scope of coverage to the consumer, better protection for the consumer, and the council is currently working on this as an internal regulatory control to impose upon all general agents in the community. Mr.

Maloway: It seems to me, and I am operating from memory now, but it seems to me last year when we did check into the wording in the malpractice policies to which he refers, that the malpractice policies cover people for errors and omissions but not for fraudulent acts. So there is an exclusion in there, and therefore bonding which is by its nature fidelity-type coverage to take effect when there is fraudulent activity, not an error or an omission-when you walk away with somebody's money, that is a fraudulent act-is what is required and that is why Ontario has both. Ontario has

May 8, 19 97 LEGISLATIVE ASSEMBLY OF MANITOBA 2467 the malpractice policy requirement, as, by the way, does Manitoba for all intents and purposes, but what Manitoba does not have is the requirement of the bond which Ontario has. All I ask is that if the malpra ctice policy will not handle the problem, then the bond should be looked at as a means of redress. It is not all that expensive a solution either to do this. The coverage is available, so it seemed to me that would be something you should look at.

I spoke to the previous minister about it, and he seemed to think it was a good idea, but, once again, he is no longer there. * (1 500) Mr. Radcliffe: Mr. Chairman, in response to my honourable collea gue's remarks upon the issue ofE and 0 versus bonding, I am told that the information is that the general insurance council has replied that the E and 0 with fraudulent misfeasance is available, but in the event that it is not and that we are mistaken, then we obviously will explore the bonding issue. Mr.

Maloway: A final couple of questions to the In surance Branch, I would like an update on what is happening with CompCorp and PACIC. By way of background, these were programs that were I do not know if initiated by but certainly participated in by the former NDP government when AI Mackling, I believe, was the minister, and, essentially, it came about because of an insolvency of an insurance company known as Northern Union. I think the member is vaguely aware of that particular company and the circumstances involved in its demise.

Because of that and Strathcona and other insurance companies that went under, the provinces, and who initiated it I do not know, but the provinces got together and basically did what they did with Combap [phonetic], the lemon law equivalent, and set up this national pool. It has been refined a couple of times because I think it did not respond properly, at one time, in sufficient limi ts, so there were some adjustments made to it, and the same is true with the life insurance. They did the same thing with the life insurance.

I know that when the big failure hit, when Confederation Life went under, that was the first big test. I think it was the first big test. There were some other tests, but they were of a smaller dimension. So could you update us as to what the current requirements, rules, are with regard to both of these programs and just provide us with a little history because we have not actually dealt with this subject in Estimates now for some years because of time constraints. Mr. Radcliffe: Mr.

Chairman, I had not been familia r with the CompCorp background, so I thank my honourable friend for the opportunity to learn about that. CompCorp, for the purposes of the record, is a guarantee or a backstopping on life insurance policies, annuities, disabilities, registered retirement savings plans. The coverage, I am told, for life insurance is limited to $200,000. This is on the failure, as we were discussing, of a registered life insurance corporation. The limit for backstopping loss for failure of a corporation on an RRSP is $60,000 and $2,500 monthly for disability.

This is a national scheme, and it is at the corporate level. These limits have been quite stable, consistently stable for some length of time, and I am sure I am just reconfirming knowledge that my honourable col league already has that this has been in place for some time. PACIC applies to the general insurance. The limit, I am told, has been raised now to $250,000 as an upper limit for a claim, for an insurable claim, one that is found to be a proper claim ; 70 percent of the unearned premium is covered by PACIC up to the cap of$1 ,000, therefore that would be an upper limit cap of $700 on PACIC.

These are new limi ts apparently on PACIC. Some new innovations on the PACIC scheme, which also is a national policy across the country, is that the contributions by the insurance corporations are premium driven. It is collected immediately at the front end on the payment of the premium, and it is collected annual ly, so this obviates the necessity of relying on letters of credit or reactive claims after the fact, after there is a claim been made.

So these are two insurance schemes that are like a guarantee which are in place, which are practised in Manitoba and the Superintendent oflnsu rance looks on them with great favour.

2468 LEGISLATIVE ASSEMBLY OF MANITOBA May 8, 19 97 Mr. Maloway: Actually while we are waiting for the people from Co-operative and Credit Union Regulation, I have a number of general questions that could probably be considered under your planning department. Mr. Rad cliffe: Excuse me, Mr. Chairman, could I excuse my Superintendent of Insurance? Mr. Maloway: Of course. Yes. The Acting Cha irperson (Mr. Dyck): For the honourable member for Elmwood, just to clarify for the record we are looking at 5 .1. (

d) Research and Planning. * (15 10 ) Mr. Maloway: Let us go back for a moment to the Elmwood Cemetery. I note that there is a Liberal election pamphlet being circulated currently in Thunder Bay by Liberal candidate Joe Commuzzi. In there Joe states that the federal infrastructure program has resulted in the creation of over $1 00,000 jobs and the comple tion of several pro jects in his riding including bridge No. 4 in Red Rock, Paul Lake fire hall renovations, community centres and-get this--<:emetery upgrades in Hurkett, Shuniah township road reconstruction and then several other things.

Now, I mean this infrastructure program obviously has a pretty broad base, and we were aware of stories last year where money had gone into I think the canoe museum in Shawinigan and other real ly interesting uses for this money, so I guess your imagination is the limit. Mind you, if this government could fund ManGlobe as a research developmen t project and use funds under Research and Devel opment, and then end up using them for something total ly different, I guess anything is possible.

But back to this issue for a moment here, given that, could the minister endeavour to follow this through and find out how many cemeteries have received money under this infrastructure program, how they managed to do it and see whether we could perhaps do this with Elmwood Cemetery, because I cannot think of a more appropriate example of a case that should fit into this if in fact cemeteries do? Mr. Radcliffe: The question was how many cemeteries have received support from infrastructure grants, is that correct? Mr. Maloway: This is right.

To further expedite the process, I will endeavour to provide the minister with a copy of this Liberal leaflet because I really have no further use for it. Then perhaps he could copy it and give it back to us. We dealt at length the other day about renovation contractors and so on. The minister is obviously aware that with the flood conditions of the past few weeks, that this is unprecedented and not unlike the situation that developed three or four years ago in the floods in '93. The insurance companies had to pay a premium to get contractors into Manitoba. Contractors came in, Mr.

Chairman, from Alber ta and other provinces to do work and I anticipate that that is what will happen here too, that underemployed contractors from other provinces across the country will be coming here in force because, while there is a tremendous amount of work to be done in restoring the province to its preflood conditions and it would be a much better situation if this work could be done over a period of time as far as the economy is concerned, the facts are that that is not what will happen. When the flood is over, everybody will want their work done right away.

They will all want it done immediately and because of the laws of supply and dema nd there will be cases where people will be brought in and contractors typically in the previous experiences have been greedy in terms of taking on work they could not finish. In other words, firms that were bigger on promotion than they were on talent for doing their jobs were running around signing up, making quotes on all sorts of projects and then they would start a whole bunch of them, just a li ttle bit here and there, and they would keep dozens of them on the go, eh? This is what I anticipate will happen again.

So the minister should take another look. I know he seems not interested in having some sort of regulations for renovation contractors, but cl early this is something that the department is going to have to put some extra effort into this area. I do know without endorsing this group that was on the radio a couple of weeks ago, and

May 8, 19 97 LEGISLATIVE ASS EMBLY OF MANITOBA 2469 this group, I am assuming it was the same group t�at spoke so highly about the minister, that he has met wtth these people. These people were suggesting that perhaps the city or the local municipality should be enforcing permits. By doing that, by enforcing permits they could somehow enforce who was doing the work and how they were doing the work. Given the flood situation, this is kin? of an interesting concept.

If you enforced the permtt concept it would at least make certain that structu res were not being built where they are not supposed to be, because right now if there is no requirement to get a permit living on the river, I can hire somebody to come there and build a structure and there is nobody there to stop me,

whereas if there was a requirement that the renova tors get a permit, at least they would have to go to the city, sign for the permit, and then they would at least find out what it is that they can or cannot do. So that was one of the ideas suggested by this person. If you are going to have problems with this, it is goin.g to happen now. That would be my guess.

I mean, tf there ever was going to be more renovation problems, and there always are over the summer, but if you are going to have renovati on problems, typi�ally �ith driveways and roof s and stuff like that, thts 1s the tlme when you are going to see it big-time. So you should have your department on high alert on this one. Mr. Radcliffe: Mr. Chairman, I can advise that in fact the Consumers' Bureau has been very proactive in this field alrea dy. They have worked together with MEMO in prepara tion of a pamphlet called "After Flooding, Procedures for Returning to Your Home.

" On page 13 there is a section, step 5, Rebuild and Floodproof. Without read ing it into the record, it does outline advice to the consumer to be wary of direct sales people, high pressure tactics, people who want payment in advance, loan brokers who charge a fee to arrange a guarante ed loan, et cetera. Then the Consumers' Bureau is also listed on page 15 of the pamphlet with important phone numbers that the public, consumers may wish to consult, and this is, I am told, a 24-hour answering service so that consumers can call at any time, should they run into problems.

So not only have they done the after-flooding package with MEMO, the bureau has also made arra ngement with Shaw Cable to produce a number of information ads to warn and educate the public as to the prevalence or the possibility of fraudulent individuals working in the renovation market.

The bureau is also working in close proxim ity with law enforcement agencies to deal with any fraud issues which may arise, and if they have not, I would certai nly recommend that the Consumers' Bureau contact some of their counterparts in Grand Forks and make sure that if there are known and convicted fraudulent artists working in that area of the countr yside, that that information be tran smitted to us, and we would then share that with the disaster assistance people. I have already talked to the Minister of Government Services (Mr.

Pitura), and he is certai nly in accord with this suggestion, so that when applications are made for disaster assistance, if, in fact, any individual of a spurious or doubtful nature is identified, that, in fact, the homeowner be alerted at that point in time. I am pleased to be able to advise my honoura ble collea gue that, in fact, Mr. Robidoux and his department have been proactive in anticipating some of the difficulties which may assault our community. We can only hope that, in fact, our citizens will be vigilant and that we may not suffer the depredati ons of these individuals. Mr.

Maloway: Further follow-up to the loan broker situation as the minister knows, the number of loan broker c�mplaints from this activity reached an all-time high back in '95-96 to 919 , and that was a 700-person increase over the previous year. I draw the minister's attention to 19 92, I think it was May 31, when I was asking the former Minister Mcintosh when she would stop stalling and bring in legislation to regula te these loan brokers . That was in ref erence to a company called Tower Funding.

I do not expect the minister to have the answer to the question right now, but perhaps he could get back to me with what happened. The person who had complained to me did not want the name used, but she complained-now, here is what the problem eventually boiled down to. The minister at the time put her department on high alert, sent me a memo, said she had the whole department ready to roll

2470 LEGISLATIVE ASSEMBLY OF MANITOBA May 8, 19 97 here. She had the RCMP, two RCMP members, two members of the Consumers' Bureau waiting to hear from me, and she was threate ning to send them after me if I did not release the complainant's name. * (1 520) The complainant did not want her name released, so what I did was I contacted the person, the woman in this case, from Flin Flon, and she told me she had filed her complaint with a Ken Bourquin-now, I am not sure who this person is, but his phone number was 956- 2040--just after the Free Press

article appeared. So that is where it sat and she had been taken for about $4,000. Now, given this instance with the minister being quite, well, I do not know how you would describe it given what she did, putting these RCMP officers on alert and the member s of the Consumer s' Bureau, so I just walked away from it at that point in time and hoped the situation would resolve itself. I guess over time it probably has, but if the minister could check into this and get back to me, then I could close this file once and for all and not have to worry about it anymore. Mr.

Radcliffe: Just to recap my honourable colleague's rema rks , it is Tower Funding Ltd. is the name of the alleged accused? Mr. Maloway: Yes, I believe that is the name ofthe company, and, certai nly, if the minister is unable to find a file in his departm ent under Tower Funding, then I will cert ainly endeavour to share with him the contents of my file so that we can tie it down, but it came about after a number of arti cles in the Free Press dated May 22, 19 93, so it was in that time fr ame. Mr.

Radcliffe: I will endeavour to look through my files and see what the follow-up has been on that and report back to my honourable colleague. Mr. Maloway: Mr. Chairman, moving right along here, I sent the minister a letter January 8, 19 97, regard ing an Internet service that had gone out of business. It was called Infohighway Onra mp. The minister should be aware that there are a huge number of these services opera ting, and over time there will be a number of failures. It is not unlike the situation that developed with the blue box and the recycling companies a couple of years back.

There is a danger, and we dealt with this with the suggestion for a deposit legislation on prepaid items that are purchased, about the advisability of businesses spending the money before the service is perf ormed, you know, collecting money in advance. That is what happened, people prepaid their blue box, but a whole lot of them got caught with service only half the year. Well, they did. They prepaid it, and in a lot of cases the people were only out a month or two, but those who had paid just before the demise of the company were out the whole year. That is the same case with this Onramp.

As a matter of fact, after I wrote the letter after I had read about this, I ran into a couple of people who-in fact it was a church-were out the money, were out their whole year of subscription fees they paid for this Infohighway Onramp services. So I would ask the minister what he has done since we sent him the letter, and what he might intend to do. Mr. Radcliffe: I believe that I did send a reply to my honourable colleague, but I do not have that documentation in fr ont of me here. I will check the files and respond accordi ngly. Mr.

Maloway: I wanted to ask the minister what the situation was regard ing odometer tampering. Minister Mcintosh. some years ago, made an outra geous statement that this was not a problem with odometer tampering, and in the same newsclip the news outlet had a clip of RCMP Sergeant Sangster, of the day, saying it was in fact a very serious problem.

That is when the problems really became public because cer tain dealerships in town-it was a known fact that you could walk through the car lot and when they found that 99 percent of all the cars in the dealership odometers all were just below the 80,000 mark that was kind of the tipoff that there was something wrong with this particular dealership or that parti cular dealer ship. I do not anticipate that this problem has gotten any worse because we have situations where people have taken-they take odometers, complete odometers out of junked cars.

There are all sorts of situations where odometer tampering has gone on. We had one of the most bizarre stories that I have ever heard where a dealership was supposedly-had a little drill operating under the front of

May 8, 19 97 LEGISLATIVE ASSEMBLY OF MANITOBA 247 1 the car. You can roll back the odometer with a dr ill. They got so good at it after a period of time and so brazen that one Saturday morning they forgot, the salesman forgot to tum the drill off. There were customers in the showroom wanting to see this car and this guy refused to open the hood because the drill was whirring underneath it, and he did not want to-this was the manager of the place who after having left was under a gag order, as happens with a lot of situations.

He had a settlement and part of his settlement was, he was not supposed to talk about this. In any event, that was one of the more bizarre cases. I will not get into anymore details about that one. That one had a lot of interesting aspects. So odometer tampering is a very major problem out there, and I would like to know what the minister knows about the current state of odometer tampering and what he is doing about it. Mr. Radcliffe: Mr.

Chairman, my deputy tells me that she has been in the department since Febr uary of '96, and as my honour able colleague knows I have been in the department since January of '97, so we look to him and admire and respect his longevity in this sort of endeavour, but, in fact, we have had no complaints given to us in those time interval s with regard to odometer tampering.

My only other response would be that I would imagine that this would also be a matter for the criminal courts, that if there were a case where odometer tampering was something other than something innocent, that criminal charges would be laid against the individual perpetra tors . So this might be something as well that my honourable colleague may wish to ask of the Minister of Justice (Mr. Toews). Mr. Maloway: Mr.

Chairman, I would just ask him then that since he is not that familiar with it, would he check back on the old files and compile an answer for us as to what the current state of affairs is and maybe check with the Justice department yourselves and then get back so that will save me chasing down two different sources. I would like to ask the minister in the area of pipelines, we are aware now that-well, I guess, the Public Utilities Board people are out of town still. They will not be back till Monday, but we can get them in concurrence though, so they have another opportunity in this process.

After the Estimates are done, we could probably call them to talk to them at concurrent stage, but in the meantime we proba bly should ask you a couple of questions. The minister is probably aware that there is a huge pipeline contract being let. I first became aware of it in Febr uary, I guess it was, when the president was on CJOB. I did not think they asked probing enough questions, because it was clear to me that a contract of this size-and, by the way, this is for the export of gas to the United States-so we are not, we are talking about Alberta gas first of all.

I know that we are all one country and it is our gas too, but it originates in Alber ta, and the royalties, I guess, would find their way there . * (1 530) The gas is for export, I believe, almost a hundred percent to the United States, but they are going through Winnipeg and then down south to the border. This is an enormous cost. I do not have the tran script here with me, but it is a billion-dollar pro ject. Then just yesterday the Free Press carried a front-page story, and I am assuming it can only be the same pro ject.

So what I am concerned about is how this is going to pass its way back to the consumers of Manitoba. In other words, how much more in natural gas rates will we be paying to pay off this pipeline which is-other than the constructi ons jobs that will be here for a short period of time and any ongoing maintenance-type of jobs that this pipeline will involve, most of the benefit though is for the gas producers in Alberta and of course the export picture for the country as a whole. But how much are Manitoba consumers paying for this? Maybe you want to take it as notice. Mr.

Radcliffe: As my honoura ble colleague probab ly well knows, the components of the natural gas fuel bill that one receives on a monthly basis to heat one's home or commercial building have two parts to them. There is the price of the acquisition of the commodity, which is proporti onately spread out by the seller or purveyor of the commodity, and then there is the cost of tra nsmission. The acquisition of the cost has become deregulated, as my honoura ble colleague knows, by the

2472 LEGISL ATIVE ASSEMBLY OF MANITOBA May 8, 19 97 National Energy Board. That has given rise to the area of activity with the individual gas brokers where if they can see a spread in the supply and market for the price of the commodity, not the total package-end price, but the actual acquisition cost of the commodity, then that is where these people would enter into the market.

That ultimately, it is almost like the operation of hedging or futures, tends to have an averaging effect on the cost of the commodity, and the cost of the transmission is the actual cost that is regulated and will be proposed to continue to be regulated by the Public Utilities Board. There is much more of a free market enterprise in the actual acquisition at the wellh ead of blocks of the fuel. I guess my honourable coll eague's question sort of almost borders on macroeconomics and the viability of the national oil companies who are producing product.

I can tell my honourable coll eague that there are reserves of product that are built up in the United States that are owned by the oil companies of petroleum substances, and unless a case is made to me that the Public Utilities Board has granted increases in rates to accommodate the capital building of this pipeline, I am not aware in any recent judgments that there has been provision made for this expense. The pipeline is obviously not doing this for its health.

It is doing it because it sees a profit, that it has gone out and made the appropriate arrangements for financing on its own, and that it sees that it has made a business pla n to the lenders and to the financiers, and it may very well be financing this out of its own savings and profits.

So there is nothing that I am aware at the present time in any of the judgments, and I receive the judgments from the Public Utilities Board on rates on a regular basis, of any reference to the increase in cost for the transmission of the commodity through the existing pipelines to Manitoba consumers referencing the Emerson line. Mr. Maloway: Perhaps we could deal with this when we get into concurrence and when the Public Utilities Board people are available themselves to answer direct questions. That might be a better opportunity for us to do it.

I know we dealt with this a little earlier, the Videon Cable TV rate hike requests which were substantial increases and actual ly higher than what they are even allowed to request, and I asked the minister why he was not prepared to make representation to the authorities on this issue. He should be aware that we have already gotten some results, because they are not getting the increases that they were requesting.

I would suggest that he rethink his position of not wishing to make representations and whenever another request like this comes before the CR TC that he, on behalf of the people of Manitoba, also send representation in. In this case, they were asking for something that they were not even entitled to ask for. Well, I guess they were entitled to ask for it but it was beyond the guidelines that they were allowed to have accepted. Mr. Radcliffe: I have my honourable colle ague's representations on that and I will take it under advisement. Mr.

Maloway: Perhaps we could move on to the Co op Development sections because we have a few questions for the Co-op Developmen t people and then I think we are almost ready to start another department. Well, we are not ready but we are going to have to because oftime. Mr. Radcliffe: If my honourable collea gue could let me know which department he would like to interview next after Trust and Co-op, I c an make arrangements for the appropriate director to be summoned to the building. Mr. Maloway: Well, Mr.

Chairman, in fact, we are going to be finishing the whole department in a very few minutes and moving on to Industry, Trade and Tourism. I had indicated earlier, I know that is a very big disappointment to you and your staff, and I did point out that we will be going into concurrence. We had an option of just stopping the department midterm, the Estimates midterm, and taking and going to Monday, starting a new department now and then going back to Monday when the PUB people are going to be back in town and getting them in here to get answers on a number of issues.

We solved the problem by simply passing all the department Estimates now and then when concurrence

May 8, 19 97 LEGISLATIVE ASSEMBLY OF MANITOBA 2473 comes up we will bring them in and that way they will have a lot of notice, so they will know that they cannot go on a trip, wherever they are now, they will know they would not be able to go on a trip for those particula r days or they could avoid going on a trip maybe, unless it is of course absolutely necessary and in the interests of the public of Manitoba. Mr. Radcliffe: I would like to advise my honourab le colleague that no tra velling is done in this department without the scrutiny, the vigorous scrutiny of the minister of this department.

I am assured, in writing, that every trip that is undergone in this department and every expense that is incurred on the public purse is vital to the governance of the people of Manitoba and, fur thermore, I do ask for an accounting. I want to be able to tell my honoura ble colleague what benefits the people of Manitoba receive by virtue of the spending of their dollars. So I want to allay any scintilla of suspicion that my honourable colleague might have, or anxiety, that any of this tra velling might be spurious or ill advised. Mr. Maloway: Mr.

Chairman, the minister does not even know where these people are at this point. [inter jection] He knows where they are . Then where are they and what are they doing on behalf of the province? It seems to me that you have a whole department here and there is not one person that can come before the legislative committee. Why are they all gone at the same time? Mr. Radcliffe: I would advise my honourable colleague that I am without the informati on before me.

I believe these individuals are in Banff, Alberta, at this point in time, and they are studying matters of vital interest to all regulatory boards across Canada. They conference on a regular basis in order that they keep abreast of what the trends are in the regula tory world in other provinces. [inter jection] However, I would not want my honourable colleague to allude that there were any excessive gas on the subject, so theref ore perhaps we could move on to the Co-op and Trust issue. The Acting Chai rperson (Mr.

Dyck): The honourable member for Elmwood, before I recognize him, is there a will to pass 1. ( d)( 1) Salaries? * (1 540) Mr. Maloway: Research, no, we will pass it all at the very end. I think we have an agreement that we will pass the whole thing when we are done. We are nearly there. Mr. Chairman, before we get into the Minister's Salary, I would like to ask the Co-op Development people about the Repap and Abitibi operations as to whether or not there has been any effort there for community takeovers and community involvement in those pro jects? Mr. Radcliffe: Mr.

Chairman, I am advised by my director that any development planning or acquisition is done, has been tran sferred to the I, T and T department. Therefore, I would perhaps suggest that my honoura ble colleague contact the "I" team. Mr. Maloway: Well, then, under Co-op Development, could the minister tell us what is happening in that area? How many co-ops are still functioning and what is the status? Mr. Radcliffe: Mr. Chairman, I am advised that there are approximately 430 viable co-ops incorporated and operating in the province of Manitoba at this time. Mr. Maloway: Mr.

Chairman, is that an increase or a decrease over the last, say, eight years, nine years? Mr. Radcliffe: I have, and I am willing to share with my honourable colleague, a spreadsheet which shows the number of co-operatives incorporated fr om '92 through '97 and the number of co-operatives that have been dissolved. In fact, there has been a total decrease from 88 incorporated to 133 dissolved. Mr. Maloway: Mr. Chairman, I would like to ask the minister-there was a story in the paper yesterday regard ing the Steinbach Credit Union, and I would like an update as to what is happening out there. Mr.

Radcliffe: I can only repea t what has been set out in the newspaper because the department does not get into the minutiae of the management of the credit unions. It would appear that the board of Steinbach Credit Union, which is one of the premier credit unions in the province, had decided to seek management and administra tion at another source. So, therefore, as the

2474 LEGISLATIVE ASSEMBLY OF MANITOBA May 8, 19 97 arti cle in the newspaper said, they had dismissed their GM and would be, I suppose, doing a scout for new administra tion. Mr. Maloway: Mr. Chairman, a number of years ago, there were a number of co-op gas stations that were started in northern Manitoba, as a matter of fact, I think there was one even in Brandon, in an effort to combat high gas prices, which we dealt with considerably a few days ago, and gas prices dropped considerably when these co-ops were start ed. I would like to know how many of those co-ops are still opera ting, and where are they? Mr.

Radcliffe: Mr. Chairman, we do not have that documentation in front of us, but we would be pleased to supply my honoura ble colleague with that inform ation. We have that informa tion in the office. Mr. Maloway: Mr. Chairman, a final question to the minister, and this would be, I guess, under the Minister's Salary. I would like to know how much tra vel, or what were the tra vel costs- The Acting Cha irperson (Mr. Dyck): Pardon me. I think we should discuss that later on when we discuss the Minister's Salary. Mr. Maioway: That is what I suggested, yes. The Acting Chairperson (Mr.

Dyck): Okay, we need to pass the other items first. Mr. Maloway: Pass all ofthese, sure. Fine. The Acting Chai rperson (Mr. Dyck): Is it the will of the committee then to proceed with the passing of the other items? [agreed] 5.1. Administra tion and Finance (

d) Research and Planning (

I) Salaries and Employee Benefits $15 3,1 00. Shall the item pass? Mr. Maloway: Now is that Minister's Salary? No? The Acting Chai rperson (Mr. Dyck): No. Mr. Maloway: Go, pass, yes. Just go right up to the Minister's Salary. The Acting Cha irperson (Mr. Dyck): The item then is accordingly passed. 5. l .(d)

(2) Other Expenditures $25,9 00-pass. Then let us move to 5.3 .(

a) Insurance Branch ( 1) Salaries and Employee Benefits $276,000-pass;

(2) Other Expenditures $99,7 00-pass. 5.3 .(

c) Public Utilities Board

(1) Salaries and Employee Benefits $66 1 ,3 00-pass;

(2) Other Expenditures $1 ,225, 700-pass. 5.3 .(

d) Trust and Loan Cor pora tions Br anch

(1) Salaries and Employee Benefits $10 8, 1 00-pass;

(2) Other Expenditures $15 ,000-pass. 5.3 .(

e) Cooperative and Credit Union Regulation

(1) Salaries and Employee Benefits $295, 1 00-pass;

(2) Other Expenditures $52,3 00-pass. 5. 3.(

t) Land Titles Office

(1) Salaries and Employee Benefits, no expenditure-pa ss;

(2) Other Expenditures, no expenditure-pas s;

(3) Less: Recoverable from other appropriations-pardon me. 5.3 .(

g) Personal Pro perty Registry (

I) Salaries and Employee Benefits, no expenditure- pass;

(2) Other Expenditures, no expenditure-pa ss. 5.3 .(

h) Companies Office, no expenditure-pa ss. Resolution 5.3: RESOLVED that there be granted to Her Majesty a sum not exceeding $4,406,600 for Consumer and Corpo rate Affairs, Corpo rate Affairs, for the fiscal year ending the 31 st day of March, 19 98. The last item to be considered for the Estimates of the Department of Consumer and Corpor ate Affairs is item 1. (

a) Minister's Salary $25,7 00. Mr. Maloway: Could the minister provide us with an amount and a list of all tra vel, all trips taken over the past year of the minister and his staff'? Mr. Radcliffe: I do not have that with me, but I certainly have no problem with supplying that to my honourable colleague. I am aware that the previous incumbent in this office did do some travelling. I think he went to Toronto, and I am not so sure that he did not

May 8, 19 97 LEGISLATIVE ASSEMBLY OF MANITOBA 2475 even go to England on departmental business. I have access to those figures, and I can supply them to my honourable colleague. Mr. Maloway: I wanted to go even further than that. I would like to have travel figures as far back as the minister has got them for, back eight years, 19 88, if you can provide them. That will give us an idea of how active or inactive in terms of travel each of the ministers have been. Mr. Radcliffe: Certainly, I have no problem doing that. Mr. Maloway: Unless any other critics have questions-! think the member for Inkster (Mr.

Lamoureux) has some questions. *( 15 50) Mr. Kevin Lamoureux (Inkster): I did have just a couple, somewhat brief questions, and it is with respect to franchises and franchisees. I had a meeting, I guess it was about a week, 10 days ago, with a constituent of mine who expressed a great deal of concern regarding how franchisees and contracts work and if in fact there is any other protection.

I will give the minister somewhat of a hypothetical-well, it is not really hypothetical-it is something that actually did happen, where here is an individual who had accumulated some dollars and felt that by acquiring a franchise he would, in fact, be having a job, making a job for himself. Unfortunately, for this particular individual, the franchisee, or the franchisor- Mr. Radcliffe: The franchisee is the consumer. The person granting the authority, the turf, or the service is the franchisor. The "or" is the active ending to the verb, and "ee" is the passive recipient of the verb. Mr.

Lamoureux: I appreciate the interruption from the minister. The franchisees and their rights are something in which I am very much interested. In this particular discussion, the individual had indicated there are other jurisdictions where, in particular in the States, there are certain legislative rights that franchisees have that protect their interests. To use, again, another type of an example, a multinational or a national corporation that has hundreds of franchisees scattered throughout its area of responsibility if you like, the primary concern is that of profit.

One cannot necessarily blame them for trying to maximize on profit. Here, in this particular case, it seems as if the franchisee was, to a certain degree, taken advantage of. Here is what we can provide for you as a franchisee, is what he was told, painted a wonderful, brilliant picture. It looked good, and then, all of a sudden, another franchisee comes into the area, and he is somewhat left holding the bag. The market is actually going down, because there is another franchisee that is obviously selling the same product.

He felt that, even though there are contracts that are entered into-and we are all familiar with the verbiage of consumer beware that would, to a certain degree, apply with a franchisor, a franchisee and their contracts-the concern still is, what, if anything, does the minister believe could be done in a situation such as this where a franchisee feels that there was inappropriate action taken from the franchisor? Is the minister aware of any other legislation in other jurisdictions that protect the franchisee? Mr. Maloway: We spent hours on this. He does not believe in it; that is unfortunate. Mr.

Radcliffe: As the honourable member for Elmwood (Mr. Maloway) has indicated, we did discuss this during the course of the Estimates, I think in Research and Planning. If there has been a fraudulent breach of the law, misrepresentation, criminal acts, then, of course, there is the Crown to rely upon there and the Criminal Code.

If there is a matter of two willing parties bargaining and somebody making a bad bargain or an inappropriate bargain, then that is something that the Crown is loathe to become involved with, so long as there has been full disclosure, there has been no deceit involved, and that the individual has been educated.

Although I do not have a complete grasp of the particulars of your example, I would urge, obviously, as I did to my honourable colleague, that all individuals who are putting up significant stakes of money and considering complex, sophisticated documents, do consult the services and engage the services of a good solicitor who understands this sort of work in order that the franchisee be protected. Often there is an area

2476 LEGISLATIVE ASSEMBLY OF MANITOBA May 8, 19 97 when, and this is again a very generalized remark, that in a franchise operation one does obtain an exclusive occupancy of a particular turf or territory for a particular period of time. That is often one of the things that a franchisee purchases when they enter into these sort of arrangements. Again, without looking at the specifics of the contract that your constituent was talking about, I am at a loss to comment any further than that.

I guess the areas of major concern which I would address myself to would be, has there been adequate and full disclosure, has there been deceit or fraud? Ifthere were willing parties entering into an agreement, equally informed or appropriately informed, then I believe the government must step back and let commerce take its course. Mr. Lamoureux: If I am approached by a franchisor and the franchisor says to me, because I am looking to start my own business, that here is the turf that you are going to be provided, here is what we are going to provide. I look at the numbers and so forth.

Even if I pay the best lawyer in the city of Winnipeg dollars to go over the contract and the details of the contract, I would ultimately argue a vast ma jority of the franchisees would not have the complex understanding of every aspect of the marketplace. In other words, if you say, look, you have a mile and half radius as a franchisee and all of a sudden you look at it, it makes sense to you as a franchisee, other franchisees in the area have similar things, here are the projections that you are given, and then shortly after signing a contract, you were not lied to, but were you misled?

Were you painted a picture that the company or the franchisor knew really was not that accurate? Now, you are into a situation where you have invested considerable money. In this particular incident the individual is getting paid far less than minimum wage and is forced to work virtually seven days a week. It has been an absolute disaster. I do not necessarily believe that he is alone, in fact had met with other franchisees, and they share some of the concerns that this particular individual has brought up.

The discussion that I ended up having with him was, is there not some sort of an onus of responsibility on these franchisors to be straigh tforward with the franchisees with respect to the potential revenues, both on the positive side, the negative or, more so, their plans, what their actual plans are in the future? If they are looking at, in the next three or four years, having two or three more franchisees located right around your area, should there not have been some sort of responsibility?

I realize it is a very difficult issue to address, and that is why I am more interested whether or not the minister is familiar with any other legislation in any other jurisdictions that might be more franchisee-friendly, if you like. As you say, it is not as much concerned about the local, like the Chicken Chef in rural Manitoba, which is a rural franchisee, because they have a vested interest in the province of Manitoba, a very strong vested interest in the province of Manitoba.

A large, multinational franchisor who does not necessarily have as much at stake other than to try to increase profit, the best way you increase profit is through saturation in many cases and that might not necessarily be in the best interests of the local entrepreneur or the local franchisee. I would suggest that maybe these, at times, local franchisees can be led down the garden path in terms of how wonderful it could be to be your own boss.

So I would again emphasize to the minister: Is he aware of any form of legislation stateside or any of our sister provinces that address the whole franchisee franchisor in their relationship? * (1 600) Mr. Maloway: We dealt with this for several hours the other day, but just by way of background to the member for Inkster (Mr. Lamoureux), Alberta is the only jurisdiction that we are aware of anyway that had a really good bill, a really good franchise legislation.

The advantages of that particular legislation will become apparent when I explain them to you, because the circum stances you are describing are exactly what I hear over and over again from franchisees. The Alberta legislation required that a prospectus be filed every time you sell franchises in Alberta. It also provided for the up-front fees to be held in trust until any and all promises made were carried out. So,

May 8, 19 97 LEGISLATIVE ASS EMBLY OF MANITOBA 2477 therefore, if you were not going to keep your promises, you do not make them in the first place, right? If you go in and make no promises, then your fees will come to you much quicker. They will not be held in the trust as long. Typically what you find is that franchise operations by-pass Alberta. If you are talking to a franchise operator, just ask them if they do business in Alberta.

If you find they have franchises right up to the Alberta border and then they jump over to B.C., then you will know, you know, it is a tipoff that there is something wrong, because typically it would cost a franchise operator maybe $30,000 or so to get a prospectus in order to deal in Alberta. The franchise companies did not like the Alberta legislation. So that was, in a nutshell, what some of the base requirements are of the Alberta legislation.

Because what happens is franchisees that are operating, say, successfully in Ontario in an area, work on an expansion basis; they get out to, say, Manitoba and they promise they will spend a million dollars in advertising in the first year. Then they find out, through no fault of their own, they are unsuccessful in signing up enough people, right, so maybe they only sign up one person. Now how can you justify spending a million dollars on one little franchisee? So what happens is they sacrifice him.

They told him verbally they were going to spend a million dollars, but at the end of the day-{)r they run short of money. They expand too quickly, they run short of money, and then it is the little guys who pumped in their life savings, the retired school teachers, the retired firefighters and so on, who are looking for a new career in life, throw their entire life savings into these things. Retired politicians, yes, we talked about all the retired politicians who would need this legislation-Tory politicians-in the next couple of years. So, yes, it is a big issue and a very important issue.

Typically the franchise agreements are very complicated, you know, 50-page documents and there are a lot of rules in there. So what happens is these franchisees, either through embarrassment or through requirements that they do not talk to the public, are really reluctant to give you the details about these kinds of things. So there is a big need for franchise legislation, but to satisfy the free market ideology of neo-Cons across the country, the Alberta government has basically collapsed its legislation.

Three or four years ago it made some changes to it which, in my view, gutted its effectiveness, but it was really good while it lasted. Once again, it might surprise you that it would happen. Why Alberta? There was-and I forget the circumstances-a major happening in Alberta that prompted this legislation to come in. Certainly, if you were going to be a franchisee, that was the place to buy the franchise would be Alberta, because you were protected. You knew that if they made promises, they were not going to get their money unless those promises were kept.

If you were a franchisor you stayed away from Alberta, and they did in droves. They lobbied very heavily to get rid of that legislation, but that is an emerging area. Just stay tuned, because there is just more activity in that area than the public actually believes. So I will just leave it at that. Mr. Lamoureux: Just, I guess, to add, I appreciate the comments from the member for Elmwood (Mr. Maloway).

I guess I would follow it by commenting that given some of the circumstances that the member for Elmwood talks about and some of the things I made reference to, if the minister sees any benefit whatsoever in at least ensuring that there is some sort of a dialogue between his department and some of the franchisees that are out there to see if in fact it is necessary, and also if in fact there is legislation that might be out there somewhere that could be positive and contribute in a positive way here in the province. Mr.

Radcliffe: Certainly if there are consumers in the province of Manitoba who do feel aggrieved through some sort of inequity of commercial relations or the inappropriateness of regulatory bodies or departments for which this office is responsible, I have encouraged them to feel very free to contact my office. We do, I can tell the honourable member, have a number of phone calls on a daily basis that we handle. We have a steady stream of correspondence, some of it laudatory and some of it critical of the different departments.

Likewise, I would extend a similar offer to my honourable colleagues, and through them to the people ofManitoba, that if there are situations which they feel are going unaddressed and unanswered, to feel free to

2478 LEGISLATIVE ASS EMBLY OF MANITOBA May 8, 19 97 contact me either in writing or by person, and I would make every attempt to meet with them, review and absorb the particular issues that they are speaking about. The Acting Chai rperson (Mr. Dyck): Item 5. l .(

a) Minister's Salary $25, 700-pas s. Resolution 5. 1: RESOLVED that there be granted to Her Majesty a sum not exceeding $1 ,21 7,800 for Consumer and Corporate Affairs, Administration and Finance, for the fiscal year ending the 31s t day of March, 19 98. This completes the Estimates of the Department of Consumer and Corporate Affairs. The next set of Estimates that will be considered by this

section of the Committee of Supply are the Estimates of the Department of lndustry, Trade and Tourism. Is there the will to have a brief recess in order to be able to get the next department in place? I would suggest we have a five-minute break in order to do that. [agreed] The committee recessed at 4:07p.m. After Recess The committee resumed at 4:15p.m. INDUSTRY, TRADE AND TOURISM The Acting Cha irperson (Mr. Peter Dyck): Order, please. Will the Committee of Supply please come to order. This

section of the Committee of Supply will be considering the Estimates of the Department of Industry, Trade and Tourism. Does the honourable Minister of Industry, Trade and Tourism have an opening statement? Hon. James Downey (Minister of Industry, Trade and Tourism): Yes, I do. Thank you very much, Mr. Chairman. Fir st of all, let me indi cate that my staff will be joining me in a few minutes. I guess I do my statement first and then they join. Okay. [interjection] Oh, after his statement, okay. They may not want to join after his statement. Thank you, Mr. Chairman, opposition critic.

First of all, let me say, I am pleased to introduce the 19 97-98 Estimates of Manitoba Industry, Trade and Tourism. After I have done my opening statement, I will invite my staff to come to the table with me. Since I, T and T's main objective is economic development, let us take a few moments to review the state of our province's economy.

I should say as well at the outset, I think it is important to note that we have had a considerable number of businesses that have, as well as a lot of other individuals, had to deal with this devastating flood, and I want to at this time acknowledge on behalf of the department and the people involved in our activities that we certainly have a strong feeling of compassion for those people who have had those difficulties, and feel that we, hopefully, are able to do what we can to get the businesses back into operation fully again that have been impacted.

We have staf f that are in fact working with the EMO and the different organizations to try and do just that. So there have been some impacts. Again, it will be dealt with, I am sure, in the discussions. But we want to acknowledge the fact that we have had staff involved on an ongoing basis. According to the key economic indicators across all industry, industrial, commercial and resource sectors, Manitoba's economy is stronger and growing faster than most other provinces in Canada and well on its way to becoming one of the most competitive in North America.

A recent record in job creation, low unemployment, new investment and exports tells the story. In the first three months of 19 97, some 18 ,000 jobs were created in the province compared to the same period last year, a seasonall

Document details

Collection	Manitoba — Debates (Hansard)
Citation	36-3-42b
Type	hansard
Volume / chapter	36th 3rd hansardpdf 42b.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	57de499233eec560d61dbe635c592c2b72c3aa65

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