Manitoba Hansard — Sitting 173 (30th Legislature, 1st Session)

30-1-173

Manitoba — Debates (Hansard)

Legislative Assembly of Manitoba DEBATES and PROCEEDINGS Speaker The Honourable Peter Fox Voi.XXI No.173 10:00a.m., Thursday,June13th,1974. First Session, 30th Legislature. Printed by R. S. Evans- Queen's Printer for Province of Manitoba

Electoral Division ARTHUR ASSINIBOIA Bl RTLE-RUSSELL BRANDON EAST BRAN DON WEST BURROWS CHAR LESWOOD CHURCHILL CRESCENTWOOD DAUPHIN ELMWOOD EMERSON FLIN FLON FORT GARRY FORT ROUGE GIMLI GLADSTONE INKSTER KILDONAN LAC DU BONNET LAKESIDE LA VERENDRYE LOGAN M M 0 p p p INNEDOSA ORRIS SBORNE EMBINA OINT DOUGLAS ORTAGE LA PRAIRIE R R ADISSON HINELAND RI EL RIVER HEIGHTS ROBLIN OCK LAKE R R R s s s s s s s s s s s s s T T T V w w w OSSMERE UPERTSLAND T. BONIFACE T. GEORGE T. JAMES T. JOHNS T. MATTHEWS T. VITAL TE.

ROSE ELKIRK EVEN OAKS OURIS KILLARNEY PRINGFIELD TURGEON CREEK WAN RIVER HE PAS HOMPSON RANSCONA IRDEN ELLINGTON INN I PEG CENTR E OLSELEY Name J. Douglas Watt Steve Patrick Harry E. Graham Hon. Leonard S. Evans Edward McGill Hon. Ben Hanuschak Arthur Moug Les Osland Harvey Patterson Hon. Peter Burtniak Hon. Russell J. Doern Steve Derewianchuk Thomas Barrow L.R. (Bud) Sherman Lloyd Axworthy John C. Gottfried James R. Ferguson Hon. Sidney Green, O.C. Hon. Peter Fox Hon. Sam Uskiw Harry J. Enns Bob Banman William Jenkins David Blake Warner H. Jorgenson Hon. I an Turnbull George Henderson Donald Malinowski Gordon E.

Johnston Harry Shafransky Arnold Brown Donald W. Craik Sidney Spivak, O.C. J. Wally McKenzie Henry J. Einarson Hon. Ed. Schreyer Harvey Bostrom J. Paul Marion Hon. Bill Uruski George M inaker Hon. Saul Cherniack, O.C. Wally Johannson D.J. Walding A.R. (Pete) Adam Hon. Howard Pawley Hon. Saul A. Miller Earl McKellar Hon. Rene E. Toupin J. Frank Johnston James H. Bilton Hon. Ron McBryde Ken Dillen Hon. Russell Paulley Morris McGregor Philip M. Petursson J.R. (Bud) Boyce I.H. Asper Political Address Postal Affiliation Code P.C. Reston, Man. ROM 1XO Lib. 10 Red Robin PI., Winnipeg R3J 3LB P.C. Binscarth, Man.

ROJ OGO NDP Legislative Bldg., Winnipeg R3C ova P.C. 222a Princess Ave., Brandon R7B OH9 NDP Legislative Bldg., Winnipeg R3C ova P.C. 29 Willow Ridge Rd., Winnipeg R3R 1L5 NDP 66 Radisson Blvd., Churchill ROB OEO NDP 97a Garwood Ave., Winnipeg R3M 1N7 NDP Legislative Bldg., Winnipeg R3C ova NDP Legislative Bldg., Winnipeg R3C ova NDP Vita, Manitoba ROA 2KO NDP Cranberry Portage, Man. ROB OHO P.C. ae Niagara St., Winnipeg R3N OT9 Lib. 132 Osborne St. S., Winnipeg R3L 1Y5 NDP 44- 3rd Ave., Gimli, Man. ROC 1BO P.C. Gladstone, Man.

ROJ OTO NDP Legislative Bldg., Winnipeg R3C ova NDP Legislative Bldg., Winnipeg R3C ova NDP Legislative Bldg., Winnipeg R3C ova P.C. Woodlands, Man. ROC 3HO P.C. . Steinbach, Man. ROA 2AO NDP 1294 Erin St., Winnipeg R3E 2S6 P.C. Minnedosa, Man. ROJ lED P.C. Morris, Man. ROG 1KO NDP Legislative Bldg., Winnipeg R3C ova P.C. Manitou, Man. ROG 1GO NDP 23 Coral berry Ave., Winnipeg R2V 2P2 Lib. 135- 16th St. S.W., Portage la Prairie, Man. R1N 2W5 NDP 4 Maplehurst Rd., Winnipeg R2J 1Wa P.C. Winkler, Man. ROG 2XO P.C. 3 River Lane, Winnipeg R2M 3Ya P.C. Legislative Bldg., Winnipeg R3C ova P.C. I nglis, Man. ROJ OXO P.C.

Glenboro, Man. ROK OXO NDP Legislative Bldg., Winnipeg R3C ova NDP Manigotagan, Manitoba ROE 1EO Lib. 394 Gaboury Place, Winnipeg R2H OL4 NDP 10th fir., 330 Portage Ave.,Wpg. R3C OC4 P.C. 31a Ronald St., Winnipeg R3J 3Ja NDP Legislative Bldg., Winnipeg R3C ova NDP 41a Home St., Winnipeg R3G 1X4 .NDP 26 Hemlock Place, Winnipeg R2H 1L7 NDP Ste. Rose du Lac, Man. ROL lSO NDP Legislative aldg., Winnipeg R3C ova NDP Legislative Bldg., Winnipeg R3C ova P.C. Nesbitt, Man. ROK lPO NDP Legislative Bldg., Winnipeg R3C ova P.C. 310 Overdale St., Winnipeg R3J 2G3 P.C.

Swan River, Man, ROL 1ZO NDP Legislative Bldg., Winnipeg R3C ova NDP 1171 Westwood .Dr., Thompson RaN OGa NDP Legislative Bldg., Winnipeg R3C ova P.C. Kenton, Man. ROM OZO NDP 6a1 Banning St., Winnipeg R3G 2G3 NDP 777 Winnipeg Ave., Winnipeg R3E OR5 Lib. Legislative Bldg., Winnipeg R3C ova

THE LEGISLATIVE ASSEMBLY OF MANITOBA 10 :00 o'clock, Thursday, June 13 , 19 74 Opening l'rayer by Mr . Speaker . IN TRODUCTION OF GUESTS 4833 MR. SI-EAKE R: Before we proceed I should like to direct the attention of the honourabl e me mbers to the gallery where we have 40 students of Grade 8 standing of the St . Mary •s Schoo l fro m Ontar io . The se students are under the direction of Mr . Raymond Desjardin. As our guests , I we lcome you this morning on behalf of all the honourabl e me mbers of the Legis lative As se mbly. !'resent ing Peti tions; The Honourable Member for Brandon West .

I-RESENTING l'ETITIONS MR. EDWARD McGILL (Brandon West) : Mr . Speaker , on behalf of the Honourab le Member for Fort Garry , I beg to present the petiti on of the Winnipeg Rea l Estate Board praying for the passage of

an Act to amend

an Act to incorporate the Winnipeg Re al Estate Board. MR. SPEAKE R: Readin g and Receiving Petitions ; Pr esenting Reports by Standing and Special Committees . The Honour able Member for Ste . Rose . REPORTS BY STANDING AND SPECIA L COMMITTEES MR. A. R. (Pete) ADA M (Ste . Rose) : Thank you, Mr . Speaker . I beg to presen t the second report of the Standing Committee on Agricul ture . Your Committee me t on June 12 , 19 74, and considered bill: No. 70, The Animal Diseases Act And has agreed to report the same wit hout amendment . All of which is respec tfu lly submitted. MR .

SPEAKER: The Honourable Member for Ste . Rose . MR. ADAM: I beg to move, seconded by the Honourable Member for Emerson, that the report of the committee be rece ived . MOTION presen ted and carried . MR. Sl'EAKER: Ministeria l State me nts and Tabling of Repo rts ; Notices of Motion; Introd uction of Bills; Que stions ; Orders of the Day. The Honourabl e Acting House Le ader. ORDERS OF THE DAY HON. RUSSELL PAULLEY (Minister of Labour and Acting House Leader) (Transcona): I be lieve we •ll go into Committee of the Whole House ; the Honourable the First Minister has the motion. MR.

SPEAKER: The Honourable First Minister . HON. EDWARD SCHREYER (Prem ier) (R ossmer e) : Mr . Speaker , I move , se conded by the Honourable the Minister of Labour , that Mr . Speaker do now leave the Chair and the House reso l ve it sel f into a Committee of the Whole to consider and report on the following bills: No. 85 -

an Act to amend The Minera l Taxation Act No. 95 -

an Act to amend The Legis lative Asse mbly Act. MOTION presen ted and carried and the House reso lved itse lf into a Commitee of the Whole with the Honourable Member for Logan in the Chair . COMMITTEE OF THE WHOLE - BILL 85 MR. CHAIR MAN: Bill No. 85,

an Act to amend The Minera l Taxation Act, What is the wi ll of the committ ee ? !'age by page ? Clause by clause . Clause 1 sub 1 -- pass ; 2 -- pass; 1--pass. The Honourable Member for Birtl e Russe ll. MR. HARRY E. GRAHAM (Birt le- Rus se ll): Mr . Chairm an, on the clause 1 . I would like an expl anation of the di fference between a "benef icial owner" and an owner . MR. CHAIR MAN: The Honourable First Minister .

4834 June 13 , 1974 BILL 85 MR. SCHR EYER: Well, Mr . Speaker, that•s in the defi nition section. I reall y wouldn•t presum e to defi ne "benefi cal owner" any diff erentl y thari it is defined in

section 1. I suppose , trying to put it in layman's ter ms, benef icial owner as distinct fr om owner is that a beneficial owner is one who has the ri ghts or acquired the ri ghts to exploit the minerals as opposed to the person who has the ownership by way of ti tle in fee si mple or whatever other inter est. MR. CHAIRMAN: (Sections 1 to 6 were read and passed .) I'll just wait a minute , eviden tly there are som e amendm ents; we haven't come to any yet, so I'll just hold it until the amendm ents are distributed. MR .

SCHREYER: Just so that the list of amendm ents here does not look inti midating in ter ms of numbers, all of the amendm ents on Page 1- and the re are five of the m - all relate to the same matt er , that is a mistake in the lettering of a

schedule to the bill and so there is need to re-letter the schedules and that's what all these amendments are with the exception of the amendm ent on the second page which I will explain when we come to it, MR . SIDNEY SPIV AK , Q.C. (Lead er of the Official Opposition) (River Height s) : Mr . Chairman, you'll have to go back to four , I guess , to move the amendment then. --(Interj ection)-- Oh, I se e. MR. CHAIRMAN: Clause 6 -- The Honourable Member for Virde n. MR.

MOR!US McGREGOR (Virden) : There see ms to be som e di spute or argument here reg arding the royalty and the override as the oil producer has to pay that 12 1/2 per cent on the top 6. 50 rather than pay the 12 1/2 percent on what his $4.0 0 or $3.9 0 or $4.1 0 and is this clear ? And the questi on is by the oil producers are extre me ly unhappy that they're paying on somet hing that they're reall y not getting. And likewise to the overr ide . Does it co m e equally on the 6. 50 or on the 6. 50 less the 12 1/2 percent ?

The overr ide will vary fro m 5 to 15 percent by those co mpanies that have changed hands in recent years . MR . CHAIR MAN: The Honourable First Minister . MR . SCHREYER: Mr . Chairm an, I'm stil l not quite certain as to the specifi c nature of the concern expressed by the Membe r for Vir den. Perhaps he could elaborate . In the me antime I think I understa nd him.

I would simply indicate that both the owner , that is to say the person with the freeh old ownership interest and the overr iding , the person with the overridin g interest if there be one , are both subject to taxation, collection of wh ich is the responsibility of the producer . And the for mula here speaks for itself insofar as that amount upon which the historic or longstanding 12 1/2 percent rv yalty is applicable. MR. CHAIRMAN: The Honourable Member for Birtle -Russell. MR. GRAHAM: Thank you, Mr . Speaker . I would the n ask the First Minister another question.

In the operation of the provincial sales tax and, Sir , I sugge st that a royalty and a sales tax are somewhat sim ilar , if I were to purchase an automobile fro m a dealer and he says this is a $10 ,0 00 car , we 'll give you a $5,0 00 discount on it and you pay $5,0 00 for the car , do I pay sales tax on the $5,0 00 or do I pay sales tax on the $1 0, 000 which the dealer has sugge sted re ally he says is a $10 ,0 00 car but you're not going to pay 10 ,0 00, you're only going to pay five ? I think, Sir , the prin ciple here is basically the same.

The Governm ent is saying to the oil co mpanies that you're going to pay a royalty on a figure that the oil company never gets . The oil company never gets the amount of money that they have to pay a royalty on. The y're paying royalty on an artificial figure that the y never received. --(Interjection)-- Well, I understan d and I hope I'm wrong, I sincerel y hope I'm wrong, that if the price of oil is 6. 50 or 10 . 50, I understand that the royalty is paid on that figure but the oil co mpany doesn •t receive that kind of money for the oil.

They only receive $2 . 00 or $3. 00 but they have to pay a royalty and an overriding on a fi gur e that they never received. And I think the sit uation is very analogous to that that applies with the provincial sales tax. And I•d like the First Minister to explain. MR . CHAIRMAN: The Honourable First Minister . MR. SCHREYER: Well, Mr . Speaker , again I have to read between the lines some what in ter ms of what the honourable me mber is objecting to.

As I understand the Honourable Member for Birtle -Russell he is saying that because the producing co mpany is required to pay a certain royalty to the owner wit h overriding inte rest and to the beneficial owner , etc . , etc . that theref ore the producing co mpany is getting some thing less than the price that is usually talked about as being the wellhead price . Well that amount is a matter of --well, it 's

June 13, 19 74 4835 BILL 85 ( MR. SCHREYER Cont•d) ..••• a matter of cents rather more than dollar s and cents, it is not a great amount and I think that•s simply taken care of in the overall net pr i ce that the produc ing company pays. In other words, if you like, it is a part of the cos t of his operat ion of doing busine ss.

And certa inly I might add that there is a certai n latitude in all this because the oil produc ing companies are recei ving a pr ice for oil now that is, you know, so sub stantially higher than it was a couple of year s ago that if they have to absord a few cents, I don •t th ink that it will in any way jeopardi ze the economics of the ir operati on.

If one wants to talk in terms of pur ist pr inciple s of taxation perhaps the Honourable Member for Birtle Russ ell has a point although I can •t even concede that because I would have to have in wr iti ng rea lly the very spec ific nature of the point the honourable me mber is making. It•s a little vague still. MR . GRAHAM: Well, Sir, maybe I can expla in it and I haven't got the deta iled brea k down of how the Governmen t arr ived at the pr ice that the oil company get s.

But I heard fig ure s band ied around he re of $10 or 6. 50 but it is my under standing that the royalty applie s to a figure , say, of, for argument 's sake, a figure of $6. 50. Le t's just use that for ar gument •s sake. But the oil company never get s 6. 50; they only get $3.00 or 3. 50 for the oil and yet the y're asked to pay a royalty on an art ificial figur e. If they pa id a royalty on the actual amount of money they recei ved, I would say that•s good. But they're be ing asked to pay a royal ty on an artifi cially inflated figure that, really, as far as the oil company is concerned, doe sn•t exis t.

We are left with an errone ous impressi on that the oil company is gett ing 6. 50 or $1 0 a barr el; they 're not getti ng that figu re ; they 're getti ng nowhere near that figu re . They're gett ing and I unders tand $3. 74 a bar re l. And I sugge st, Sir, that the royalty should be paid, it 's a perce ntage fi gure and it should be pa id on the $3. 74 that they 're gett ing, and should not be paid on the $10 or 6. 50 because that's a figur e the y never ge t. And I sugge st that they're paying ro yalty on the ir figu re s plus the tax that the Govern ment is rece iving as we ll.

And why should you pay a royalty on a tax? I th ink there 's a very basic pr inciple involved he r e. If you •r e going to pay a royalty on a tax that somebody el s e is rece iving, the n the prov ince has a double taxation pr i nciple involved here . You•re paying a percen tage , a le gi t imate pe>: centage on the $3. 74 but you're als o paying a percentage on the tax that the Government is collecting so the tax the Govern ment is collecting can be asse ssed at $4. 00 or whatever they set plus 12 1/2 percent royalty . I thi nk it •s very wrong that you should pay a ro yalty on a tax. MR .

CHAIRMAN : The Fir st Minister . MR. SCHREYER: Mr . Chairman, I thin k that the light is beg inning to dawn as to just what the honourable member 's concern is and perhaps, perhap s I can clarify the matter for hi m by making two points. The fi r st is that if he is relat ing hi s concern to

Section 6, the ref ere nce the re to Royalty be ing royalty including an overri di ng royalty, that is not pa i d and payable to the Crown. It is payable to the per son who has the freehold owner ship inte re st so that the produc ing company cannot be said, as I think the honourable member is saying, the produc ing company is not paying that amount to the Crown, it is paying that to the freehold intere s t owner and maybe the word "royalty" here is a bit of a mi onome r or at lea st causing the conceptual di fficulty.

It is the - if you li k e - the value that is placed by the fr eehold owner on the re sour ce , that has to be paid by the produc ing company in order to have exploit ing inter es ts or access to that

part icular prop erty. Now, Mr . Chairman, I wonder if it would not exped ite matters, since there is a certai n deta iled complexity he re , if the Honourable Leader of the Opposit ion and member s opposite , the Member from Portage , would agree to having the ADM of Fi nance brought he re . And the Deputy of Mine s and Re source s are both now available. I would simply ask them if they're within ears hot to make the ir way down to the floor he re . MR .

SPIVAK : Agree ing to this - and I'm not sure the Fir st Minister was pre sent when this too k place last ti me - but I wonder just for record so that he 111 have an indication of our po sit ion. lt1s our beli ef that this matter should be ref erred to the Rule s Committee and as a matter of practi ce , whe n we deal in Committee of the Whole , there should be an opportuni ty for the officials to be pre s ent . MR . PAULLEY: Perhap s the Clerk could make a note of that Mr . Cha i rman, for di scuss ion at the Rule s Committ ee , the que stion of the pr esence of stran ger s in the House

4836 June 13 , 19 74 BILL 85 (MR . PAULLEY Cont•d) ... , • dur ing the Committee of the Whole . MR . CHAIRMAN: The Honourable Member for St. James . MR . GEO RGE MINAKER (St. James) : Mr . Chairman, I have some techni cal questi ons I would like to put to the First Minister but I will wait unt il the people from the Departmen t are he re . MR . CHAIRMAN: The Honourable Fi rst Minister . MR . SCHREYER: Mr . Chairman, I thi nk perhaps the Member for Vi rd en was about to ri se and the re may be some value in hi s proceedi ng; we could ta k e notes , MR . CHAIRMAN : The Honourable Member for Vi rden, MR.

McGREGOR: Carryi ng on the same point of view, it is true this 12 1/2 in Manitoba, probably 80 percent of that is going to farmer s, indi viduals . But even if those people , the fact that the government is taking the $2 .5 0 le ss the 90 cents or four cents, whatever it may be, they're getti ng Scot free - or , you know, whatever the formula , we di sagree fro m your party to ours, the formula what it comes down to but they're re ally coming off Scot free on the basic $2 ,0 0, $2 .5 0.

They're paying no royalty to that land owner where the producer is 1\aving to put it up and in Manitoba where ther e's a lot of the overr i de from five to fi fteen percent over and above that 12 1/2 percent. Now combine those two and it •s a big pe nalty to the oil pr oducer and does the five and fi fteen come after the 12 1/2 per .. cent comes off or does it come off of the basic top $6. 50? MR . SCHREYER: Mr. Chairman, perhaps it would be just as well for the Member for St. James to pose hi s techni cal points as he indicated and we will attempt to respon d to the po ints rai sed togeth er . MR .

CHAIRMAN: The Honourable Member for St. James . MR . MINAKER: Thank you, Mr . Chairman. My questi on relates under the secti on we •r e deali ng with because it becomes part of the calculat ion in the tax to the produce r, thi s incremental tax of ei ght mi lls . I wonder , Mr . Chairman, if the First Mi nister could confirm that on a 20 barrel per day well or larger produc ti on that the $2 . 69 addit ional moneys that will now be pr ovided at the well he ad, that the ei ght mills will be applied to the $2 . 69 additi onal amount which will mean three cents tax . In aldit ion, if we look at

Schedule C, that there will be an incremental tax, royalty tax, of $2 .2 8 of that $2 . 69 and further that the royalty that's paid to the mi neral ri ght owner , whe ther it be the Provinc ial Government or a pri vate individual, the mi nimum royal ty paid out of the $2 . 69 increase will be approxi mately 34 cen ts. So that if we total up for a 20 barrel per day well or more we have three cents for the ei ght mi ll tax on the $2 . 69 incr ease ; we have $2 .2 8 for the incremental tax in

Schedule C; we have approxi matel y 34 cents -I beli eve it is 33.6 to be exact - additi onal royalty that the producer will have to pay to the mi neral ri ght owner wh ich, in 20 percent of the cases , I understan d it is oursel ves , the prov ince, the Crown who own it , so that whe n we total th is up that you get a total of $2 . 65 so that the producer is left with four cents per barrel after the pr ice increase .

Now it 's my understandi ng that there are also many wells that - where there is an overr ide royalty where it happens that the person produc ing it at the present ti me was not the initi al producer or the person to establi sh the mi neral ri ghts with the owner of the mi neral ri ghts so that we have possibiliti es whe re not only is there 34 cents addit ional royalty going to the mi neral ri ght owner but there could be anywhere from, I beli e ve, five percent to fi fte en percen t additi onal royalty .

And it's my understandi ng in talking with the oil indust ry that these royalt ies are applied to the wellhe ad pr ice or the increase that might occur at the wellhe ad. Now in additi on, Mr .

Chairman, my under standing is that these producers are also the smaller producers who are not connected to the pi peli ne and have to use truc king serv ices to truc k the ir crude oil from the well to the pi peli ne te rmi nal, are facing an increase for thi s serv ice and I underst and it might be in the order of fi ve cents to ten cents per barrel, that after all of these taxes and royalt ies are applied to the $2. 69 increase that in actual fact, if the transpor tati on costs rema in the same as pri or to the increase , they will be four cents a barrel ahead or if there is a transpor tati on increase to the se producers , they wi ll, in fact, have less money than pr i or, before , Now that is one of the questi ons I rai se.

The other questi on is thaL I would li ke to know, it 's my under stand ing that I beli eve about 38 1/2 percent of the wells are ten barrels or less in produ ction at the present ti me ,

June 13 , 19 74 48 37 BILL 85 (MR. MINAKER Cont•d) .. ... ar e te n barr els per day or le ss. The re maining 62 perce nt of the wells in pr oduction ar e te n barr els or mor e with 35 perce nt of the we lls, I beli eve, ar e around th e 20 barr el mark or mor e. I wonder if the First Ministe r can ge t th e staff to confirm this . Mr .

Speake r, if we look at what the we llhead pr ice was in 1970 , my understandin g the we llhe ad pr ice in 19 70 was $2 .74 a barrel, that if we add th e net amount that is available aft er all of the incre m ental taxe s ar e placed and all th e over he ads ar e taken off th is $2 , 69 per barr el incr e ase, anybody pr oducing over 20 barrels today will ge t four cents a barr el addit ional moneys and we add it to the for me r pr ice of $3. 69 a barr el, wh ich was th e we llhead pr ice pr ior to th is re cent incre ase, we ge t a value of $3. 73 per barr e l is what the pr oduce r wi ll have and , Mr .

Chairman, if we compar e that to the 19 70 pr ice of $2 .7 4 that the pr oduce r wi ll have expe rie nc e d thi rt y-si x and a hal f perce nt incr ease in four ye ars . I questi on, Mr , Chairman, whe th er or not the small pr oducer s wh ich we •r e talking about, because the y're th e people who ar e not connecte d to the pi pelin e and hav e thes e additiona l trans portation costs , wh ether or not the y will be able to continue to oper at e. For that re ason, Mr .

Chairman, I again ask th e First Ministe r if th es e pr oducers cannot operate because of the lack of incr ease of moneys to handle the incre ase d costs of pr oduction, is it the inte ntion of the Governm ent to ta ke ove r the pr oduction of oil in Mani toba? I know the me mbers on our side, the Progr essive Conservati ve Party, would like to ha;ve an answer to that question. Is the inte nt of the Governme nt to take ov e r th e pr oduction of oil in Manitoba?

Because it would appear that if our fi g ur es ar e corr ect that the small pr oduce r or any pr oduce r that is 20 barr els per day or mor e on the we ll will have in th e orde r of four cents per barr el and it would appear could not continue to oper at e if we understan d what the pr oducers hav e said to us person ally that a se ven to eigh t barr e l a day we ll is the br eak-even point at thi s ti me , and that even if the y we re able to oper at e for si x ye ars uninterrup te d at an eight barr el per day oper at ion with no se rv ice proble ms , and if the y could continually pump for si x ye ars the y th en could possibly afford to dr ill anothe r we ll.

This is what the pr oducers ar e faced with, that under the pr es ent se tup the y cannot afford to drill new we lls so the explorati on of new oil in the Vi rde n ar ea will pr etty we ll stop. So I again place the questi on to the First Ministe r on behalf of the P.

C. caucus because we want to know if it is th e int ention of the Governm ent to take ove r the pr oduct ion of the oil industry because it would appear with the burde ns of taxes and the royalty on this new incr eas e of $2 ,69 that th e pr oducer is looking at anywhere fr om a min imum of four cents per barr e l up to - if we go to th e 10- barre l pr oduction le vel - and I understand th is is whe re the majority of th e we lls ar e pr oducing 10 barr els and above - we 'll be looking at a 62 cent per barr e l incr e ase. Mr .

Speaker, if the se people hav e to close down and the re ' s no furthe r explorati on, new exploration in our ar e a for that mi neral, is it the inte ntion of the Govern m ent to take ove r the pr oduction of the oil industry in Manitoba or would the y pr efer it to sit in the gr ound and not be pr oduced and at some futur e date , through the le gi slation that we •r e looking at, take ov e r th e industry - fi ve ye ars from now or whe never - andh aveit inthe ir ownhandswi thout anypr oblems ofge tting some kind of value given to the pr oducers that ar e the re now pr oducing for their equipm ent and so on?

To us on thi s side this is a very importa nt question that we would like answere d and we would also like answere d the se te chnical questi ons rai se d on ro yalt ie s and so forth . MR. SCHREYER: Th e one questi on for clarif ication from the Honoura ble Member for St. James, I th ink the se cond last point he made was something to th is effe ct, that for the pr oducer, he said, the incr eas e ra nge s anywher e from a fe w cents - I think he said four cents - to how much? MR. MINAKER : Mr .

Chairman, on a te n barr el per day I bel ie v e that we allowed thr ee cents for the eight mi ll incr em ent and $1 .8 0 out of

Schedule C and 34 cents for the royalty . You end up with a total of $2 .1 7 of th e $2 .69 incre ase be ing take n off before the pr oduce r has access to it , which le av es hi m with 62 cents per barr el. That would be on a te n barr el per day we ll . But obv i ously on a 15 barr e l per day we ll it dro ps to 28 cents per barr el if you us e th ose similar calculations. MR. SCHREYER: Mr . Chairman, in re sponding to the questi ons that have be en put thus far I would simp ly indi cate that I would ask the Member for St.

James to run hi s calculations again becaus e when he talks of th e bottom range as be ing somewher e only in the orde r of four cents or the r eabouts sur ely he is not re fe rring to the pr oducer. He must be

4838 June 13 , 19 7 4 BILL 85 (MR. SCHREYER Cont'd) .••.. re ferri ng to those who have ei the r fr eehold or overri d ing r oyalty inter est because the pr oducer, even in the case of the lar ge r wells upon wh ich the incr emental tax is la r ge r, even in those cases the pr oducer does re ce ive an incre ment in sh are -a t least an incr ement in the or de r of 30 cents or 32 cents or mor e and incr easing, of course , to somethi ng in the or de r of 90 cents to 95 cents in the case of the wells that ar e smalle r, below 10 ba rr els a day output .

But even the lar ge wel ls , the pr oducer's shar e is in the or de r of 30 cents or gr aduating upwar ds . So di d the honourable membe r mean the produce r or did he mean to say those with the freehol de r overr id ing royalty inte r ests as re ce i ving only four cents or six cents or wh atever? Per haps you could clarify it . MR. CHAIRMAN: The Honourable Membe r for St. James. MR. MINAKER: Thank you, Mr. Chairm an. I'm re fe rr ing to the producer that has ar ra nged wi th the owner of mi ne ral ri ghts to pr oduce and get the oil from that

part icular re se r ve, and I wonder, Mr. Chair man, if the Firs t Minist er could confirm with hi s aides that on a well that•s pr oducing 20 barr els pe r day or mor e, that the incr ea sed tax from the ei ght mi ll will be th r ee cents - th at's one th ing would he confirm? Secondly, if we have re ad

Schedule 11C11 corr ectly, th at the pr oducer, or the tax on the $2 . 69 incr ease will be $2 .2 8, and fu rthe r, that if the re is a lease for the mi ne ra l ri ghts that commits the prod uce r to pay 12 1/2 pe rc ent for the wellhead incr ease, if we apply 12 1/2 pe rcent to the $2. 69 we get 33 .6 cents, or roughly 34 cents , so that out of the $2 .6 9 incr ease the re 's three cents in the ei ght mi ll incr eme nt; $2 .2 8 from

Schedule "C ", that makes $2 . 31 , and then the re 's 34 cents that is committed to the owner of the mi ne ral rig hts , wh ich could be the Pr ovince, making a total of $2 . 65 that ar e committed out of the $2 .6 9 before the producer has access or use of the moneys.

So if we subtr act from the $2 . 69 the $2 . 65, the pr oducer wi ll be left with four cents pe r barr el, wh ich could be used up if he gets a tr ansport ation incre ase in costs for that se r vice - which is re port ed they ar e looking at a five cents to ten cents pe r barr el incre ase for tr anspor tati on costs - tha f they would be worse off than they we r e pri o r to the incr ease of the $2 . 69 in the implementati on of th is pro posed tax. MR . CHAIRMAN: The Honou rable Fir st Minister. MR. SCHREYER: Well, in all that , Mr. Speake r, the analysi s is lar gely corr ect. Whe r e the Membe r for St.

James is unde r a mi sappreh ens ion is with re spect to the closing rama rks that he made . The producer does not pay the furthe r 12 1/2 pe rc ent to the Cr own on oil pr oduction that is re lating to th is

Schedule ; what the Membe r for St. James is doing re ally is mi xing togethe r oil production on Cr own land and on freehold inte r est -- freehold inter est owned land. The re is no fu rthe r royalty paid to the Cr own on pr oduction unde r this

Schedule if it 's on freehold held land. A MEMBER : How about the othe r Act? MR. CHAIRMAN : The Honourable Leade r of the Opposi tion. MR . SIDNEY SPIV AK, Q. C. (Leader of the Offic ial Oppositi on) (R ive r Hei ghts) : I th ink the n maybe it's necessar y to clari fy a positi on her e. This Act will apply to only freeh old land. The Mining Act would apply to Cr own land.

And the Mining Act you're pro posing, you'r e pr oposing with re spect to Cr own land changes as well, I assume , and that's intended to be done by re gulat ion. --(Inte r jecti on)-- Yes , it 's been unde r re gulat ion but I just want to clear and unde rs tand co rr ectl y that it 's your intenti on, with re spect to Cr own land, to deal with th is by the Mi ning Act by re gulat ion, and you're going to br ing that into li ne wi th this Act. All ri ght .

May I ask, have the re gulat ions, or can an undertaki ng be given with re spect to the Mining Act as opposed to th is Act, tha t what we ar e talk ing about is a

schedule and a formu la that will be simi lar? So that in effec t, we ar e talking --(Inte r jecti on)-- Well, possibly th is will ... MR. CHAIRMAN: The Honourable Membe r for St. James . MR. MINAKE R: Thank you, Mr. Chair man.

I wonder if the Firs t Minister then could advise on the 80 pe rcent of the land or the wells that ar e pr oducing on land whe re the mi ne ral ri ghts ar e owned by the individuals , the citi zens of Manitoba or whoever owns the mi ne ral rig hts , would then my calculations be corr ect that they would be committed to pay 34 cents ; in a contract they have with the owner of the mi ne ral rig hts , the y would be committed to pay the 34 cents incr ease in royalty to the m, giving a total, as we indicated pr ev iously, of $2 . 65 committed ei the r to the Pr ovince in the tax of thr ee cents and $2. 28 and 34 cents commitment to the owner of the mi ne ral rig hts , so that in 80 pe rcent of the

June 13 , 19 74 4839 BILL 85 (MR. MINAKER Cont•d) .•... case s - or that• s not the correc t stat eme nt, but 80 perc ent of the we lls that ar e pro ducing ar e on pro pert ies where th e mi neral ri ghts are owne d by some one other than the Cr own, that in that situation, if there's a we ll pr oducing 20 barre ls per day or more, that th e producer will only rec eive four cents per barrel , the net gai n to hi m in those se ts of circ umstances , wh ich I un der stand ar e quit e a fe w. MR. CHAIRMAN: The Honourable Fi rs t Ministe r. MR . SCHREYER: We ll, Mr .

Chair man, no, I couldn't confirm the honourable me mber's assumpti on. Ce rt ainly that's not my im pre ssion and I checke d with advis ers he re, and it 's confirm ed to me that the amount that would be available to the pr oducer would be 32 cents, not four cents. So we 'r e back to that point again. MR. CHAIRMAN : The Honourable Member for St. James . MR . MINAKER: Thank you, Mr . Chai r man.

I wonder if th e Fi rs t Minister, then, could us e the example simi lar to what I did, showing where th e di ffere nc e comes in, why th ere is a 32 cents -- in other words , you'r e showing that there's 28 cents more available under the circumstances that I hav e cite d. Could he explain that ? MR . CHAIRMAN: The Honourable Fi rs t Minist er. MR . SCHREYER: Mr . Cha irma n, per hap s advis ers he re can att emp t to plumb the de pths of that questi on. There is per haps a ce rt ain comple xity to it . I, in the me antime , will tr y to outline to the Honourable Member for St.

James, in list form at, just how thi s is allocate d on a per barre l basi s for a we ll pr oducing 20 bar rels per day, because that•s really what's at issue or the point of concern that•s be en ra ised . There fore, there is a four -way allocation. The incre ase in the mi ne ral tax at eight mills comes to three cents. Secondly , the incr em ental tax, 238 mi lls , applied to the pric e incr eme nt comes to $2,2 8. And, by the way, I say thi s on the side ; we're talking he re about a base incre ase of $2. 69.

Thi r dly , increas e in fre ehold mi ne ral owner's share, 12 1/ 2 perc ent, come s to six cents; and finally, incr eas e in produ ce r's share 32 cents . And if you total it , it come s to $2 . 69. MR. CHAIRMAN: The Honour able Member for Bir tl e-Russ ell. MR. GRAHAM: Mr. Chair man, can the Fi rs t Ministe r te ll us how he ar ri ves at the increas e in the owner's share is six cents? If you take, say it 's 12 1/2 perc ent, 12 1/2 per cent of what gives you six cents? Twelve and a half perc ent of $2. 69, I unders tand, is 34 cents .

I th ink there is an err o r some place in the Fi rs t Minister's calculations. A MEMBER: 12 1/2 perc ent of 48 cents comes to six cents . MR . CHAIRMAN : The Honour able Fi rs t Minist er. MR. SCHREYER: We ll, Mr. Chair man, that's pretty obvious and that's corre ct; 12 1/2 perc ent of 48 cents come s to si x cents, and that 48 cents, where does it come from? We ll that 48 cents repre sents the di ffere nt ial betw een th e incr ement and the increm ental tax, Is n •t that corre ct, basically? MR. CHAIRMAN: The Honourable Member for St. James. MR. MINAKER: Mr.

Chair man, it's my unders tanding in talking with some of the pr oducers in the past fe w days that th ere form , their contract with the mi ne ral ri ghts owner s, is base d on the we llhead pric e. They ge t 12 1/2 perc ent of the we llhead pric e. Thi s is my und ers tanding. It's a standar d form No. 7 or somet hi ng to that effe ct, that it indi cate s that the y will ge t 12 1/2 per cent of the we llh ead pric e, so that you •r e looking at the gr oss increas e, not th e net incre ase, after taxes .

This is my under standing and maybe I can be corre cte d if I am wr ong, but th is is, I beli eve, the under standing of the small pr oducers that I have talke d with in the past fe w days and this is one of their concerns . Because in actual fact, if what I am saying is a fact, the mi ne ral right owner will be ge tting 34 cents where the producer will only be ge tti ng 4 cents . MR. CHAIRMAN: The Honourable Fi rs t Mi nist er. MR . SCHREYER: Mr .

Chair man, what complicates thi s a little fur th er, at le ast makes simple re ckoning much more di fficult , is that there is a vari ation as be tw een the we ll he ad pric e and fie ld pric e, the latter be ing tha t pric e which is we llhead pric e adjuste d for mars halling or tr ans por tation or tr ansmission costs, and that varie s considerab ly, anywhere from nil to pr actically nil, to fifty , sixty cents a barre l, and I wouldn't pre sume to tr y to sort of outline the ra ti onale as to why the mars halling and collecting or tr ansmission cost var ie s the way it does .

It1 s a fu nct ion of di stance to some exte nt, MR. CHAIRMAN: The Honour able Member for St. Ja mes .

4840 BILL 85 June 13 , 19 .74 MR . MINAKER: Mr . Speaker , in all due re sp ect to th e First Ministe r, we •re de aling wit h a diffe re nce of we llhead pr ice s.

The trans portation costs exist ed when it was $3. 69 a barr el, that in some cases, I think at Lulu Lake, the y're paying 72 cents a barrel, and in th e Vi rde n ar ea some ar e paying 30 to 35 cents a barrel, but what we •r e de aling wit h is the incre me ntal diffe r ence now, so that whe n you look at the 2, 69 incre ase, and even though th e we llhead pr ice was, say, 3.6 9 before this incr ease and th e trans portation costs we •ll say we re 69 cents , the n if the royalty was paid on thr ee dollars before , now it would be paid on 5. 69 if we add 2. 69, becaus e pr esumably th e trans portation costs haven •t changed, So the pr oduc e r is stil l faced with that pr oblem, Mr .

Chatrman, that aft er all the incre me ntal taxes ar e applie d, he is still committe d, to my unde rstan ding , by contract wit h th e mine ral ri ght owner, to pay him 34 cents, becaus e that is still what th e diffe r ence is from pr ior to th e incre ase and what it is today, and this is th e pr oblem th ey ar e faced with , that the y will be committe d by contract with th e 34 cents royalty charg e in some cases, and in some case s mor e, so that th ey may hav e be en paying only possibly- I haven't worke d out - 12 1/2 perce nt on thr ee dollars would be maybe 37 cents royalty , but now th ey will hav e to pay 71 cents, and this is where th e pr oblem com es in, Mr .

Chairman. MR . CHAIRMAN: The Honourable Member for Birtle -Russ ell. MR . GRAHAM: Mr .

Chairman, the r e se em s to be a par ti cular point he re that, Sir, it is our cont ention that the Gover nment has comple t ely ei ther be en misinforme d or has ov er looked, and Sir , th e Governme nt-- I belie ve , Sir, anyway - is under th e im pre ssion that th e small pr oduc e r is going to re ceive at le ast 32 -- even in th e highest category he •s still going to re ce iv e a 32 cent incr ease, and we contend, Sir , that because th e Governme nt is eith er mis inform e d or has miscalculated on th e royalty that th e pr oduc er must pay unde r contract to th e fr ee hold owner, that th ere is a vast diffe r ence betw een what is actually happening and what th e Gover nment beli eves is going to happen.

And, Sir , if the re is that pr oble m, I was just wonderi ng, Sir , if the Gove rnm ent was willing to take a quick, complete se cond look at this and maybe - I sugge st, Sir , that maybe th is should be de alt with this aft ern oon rath er than this morning . MR. CHAIRMAN: Th e Honourable First Ministe r. MR . SCHREYER: Mr . Chairman, the re was no point in the honourable me mber suggesting or imp lying that th ere has not be en a very le ngthy re vie w of this matt e r by th e appro priat e officials of the De partme nt of Fi nance and th e De partm ent of Mines and Re source s.

Th e one unarti culated pr emi se in this whole argum ent, Sir , and one that has not be en acknow le dged by honourable me mbers opposite , is that th er e has be en conside rable pr ice adjustme nt taking place in th e past 24 to 30 months before th e most re cent incre ases we re eff ecte d on th e first of Apri l, and that the r ef ore all of the re fe re nc e to incr ease d costs of pr oduction, incr ease d costs of doing business in th e oil industry because of inflation, etc ., and th e us e of that argument to att empt to just ify allowing a large r shar e of this windfall to th e pr oducers, etc . ignor es th e fact that betw een 1972 and the autumn of 19 73 th er e was a per barr el incr ease of about a dollar to $1. 20, and most of that has gone to th e benefit of th e oil-pr oducing compan ie s and those with overr iding int ere sts and those wit h fr ee hold inte r est as we ll.

I indicate d ye ste rday the way, the patte rn of oil pr ice adjustme nt in th e past de cade - we ll, not only for one de cade, Sir , but for two. For almost twe nty ye ars the pr ice of oil has be en constant, or pr actically so. And th en in 19 72, in early 172, it starte d to escalate - 19 71, corr ection; I don•t want to exaggerat e th e case - and it has escalate d considerably , to th e advantage of pr oducers and those wit h beneficial and othe r inte r ests in oil and pr oper ty re lating to oil.

And th ey have take n th e lion's share, by far th e gr eate r shar e, of all of that incre ase which has sli pped by public atte ntion, It is only th e dramatic incr ease of last fall and this spring that has se iz e d public atte ntion. So honourable me mber s simp ly must not for ge t, should not for ge t, that the re has be en a substantial incr ease accruing to the benefit of th e pr oduc ers and those re lating to oil pr operty, in 19 72, 19 73, and '71 as we ll. MR. CHAIRMAN: The Honourable Le ader of th e Op position. MR. SPIVAK : Mr .

Chairman, I wonder if I could make a re comm endation to th e First Ministe r. The state d objective s ar e unde rstood and have not re ally be en quarr ell ed with . The re is a pr oblem in understandin g what is taking place, and th e Honourable Member fr om St. James has indicated his position, which show a variation, and if it' s not inte nded - and I don•t think that th e Gover nment is int ending to say one thing and do another, and I want to make

June 13 , 19 74 4841 BILL 85 (MR. SPIV AK cont•d) ... that very clear , but I think it' s necessary that there be the oppor tunity for some of you. There was an opportunity that was pr esen ted in the ear lier stages when the Minister of Mines and Natural Resources said that his officials would be available, and they were for that first meeting. But I wonder if it 's possible in th is for the Honourabl e Member for St. James , pr obably the Honourab l e Member for Vi rd en, the First Minister and the officials, to at least meet on this .

The form that we have now and the way in which we are dea ling wit h th is now, makes it almost impossible, I think , to get to the heart of the matter, and I say th is to you quite frankly. And I think that if they have th at opportunity of meeting private l y to be able to look at the arit hmetic , and be able to understan d the calcu lations, then the Honourabl e Member for St. James may determine that he 's been in error or the Premier may find that there is some mis underst anding that should be clari fied at this point . MR. CHAIRMAN: The Honourabl e First Minister . MR. SCHREYER: We ll, Mr .

Chairman, in order to ex pedit e consideration of the matter in a way that wi ll be better under stood, I would agree to the suggestion that we pr oceed through the bill, let it be indicated what sections you wis h he ld, including the schedul e, I would think, and by leave we can arran ge to hol d the bill over ; after we•ve pr oceeded with all the sections, indicate those you wis h he ld, hol d the bill over and come back to it this aftern oon. And then may I ask the Members for St.

James and Virden and Birt le-Rus se ll if they have se parate points or if they can collecti ve l y put their points in writing and somehow get it to me by, say, 12 :30 or thereabouts, one o•clock, in written form so that we can more pr ecise l y understan d the nature of their concern. MR. CHAIRMAN : The Honourable Member for St. James. MR. MlNAKER: Mr . Chairm an, would there be any possibility, after this bi ll is handled in the manner that the First Minister has indicated, that we could possibly sit down wi th the officials to go over this wit h them pr ior to the 1: 30? MR. SCHREYER: We ll, yes , Mr .

Speaker . Certainl y that can be arranged . I would, however , once again ask that the case ex amples they wish to use , including the specif ic numbers by way of ex ample, be in written form with honourable members , and we can arrange to me et, let us say, at 1:30 in the Members Lounge across the way as we did the other day. MR . CHAIRMAN: The Honourable Member for Birtl e-Russe ll. MR . GRAHAM: Sir , I wish to thank the First Minister for that conciliation, but Sir , much of the pr oblem, I suggest , is very di fficult to put in a written form .

I think we could accomplish far more in an oral and free ex change rat her than trying to put it all in writing. MR. CHAIRMAN: The Honourabl e First Minister. MR. SCHREYER: Mr . Chairman, I did not want to im ply that we would be ex cluded from de aling verball y wit h the matter , but sure l y it would be he lpful to have one or two case study ex amples, or case ex amples, in written form. MR . CHAIRMAN : Clause 6- hold? (Hold.) Clause 7-4 (1 ) (a) - pass; (b) -p ass? MR. McGRE GOR: Mr .

Chairman, I th ink the First Minister would have to re l y on his mem ory, but wh en the oil people were in here discussing this some six weeks ago, one of their de legation appr oached us , knowing that this wouldn•t be in ef fe ct, and asked about the payme nts on the tax, if it came into eff ect in April , and I think the Minister at that hour said , "Have no fe ar :• or words to this ef fect, that as the tax has now been paid - I mean the cheques are out - the people have spent -it, and inasmuch as it doesn't come into ef fect to the people of Manitoba til l July, is there room to stretc h that into the ne xt pay?

May payment isn•t here yet , and as they warned - this has been calls that I•ve got. I don't persona lly recall the verbal discussion in th is area because it was a two-hour shot, but they seem to be united that th is was a pr omise from the Minister, that it would not come into eff ect as of April the first . Is there any ... ? MR. CHAIRMAN: The Honourable First Minister. MR. SCHREYER: We ll, Mr .

Speaker, I would be very sur prised if there was any undertaking by the Minister of Mines that the application of the revised roya lties would not come into eff ect unti l a date somewhat later than the first of April , because the entire ex ercise in ana lysis had been pr edicated all along on the fact that on the first of April there would be , across Canada , author ization and appr oval for the increase of the we llhead pr ice of oil, and

4842 June 13 , 19 74 BILL 85 (MR . SCHREYER cont•d) ..• therefore Manitoba at no time had it in mind to depart from the

schedule as it applied to Alberta , Saskatchewan, and any othe r oil-producing area in Canada. MR . CHAIRMAN: (The balance of Clause 7 was read and passed .) Clause 8, 4.1 (1) (a) - pa ss; (b) -- I beli eve there is supposed to be an amendment. MR. SCHREYER: There is an ai:neridment here , Mr . Chairman, and I would ask to be allowed to simply read it on to the record: That the proposed subsect ion 4. 1 (1) of the Mining Royalty and Tax Act , as set out in

Section 8 of the bill, of Bill 85, be amended by strikin g out the letter "( b)" in the second last line thereof and substit uting therefor the letter "(d)". here . MR . CHAIRMAN: Agreed? 4. 1- pass . 4.1 (2) -- I believe the r .e is an amendment MR . MINAKER: Can we have the amendment and then ... ? MR. CHAIRMAN: The Honourable First Minister . MR . SCHREYER: That the proposed subsecti on4, 1 (2) of the Mining Royalty and Tax Act, as set out in

Section 8, Bill 85, be amended by striking out the letter "C" in the second line ther eof and substitutin g the letter "D" theref or . MR . CHAIRMAN : The Honourable Member for St. James. MR. MINAKER: Mr . S pea ke r, maybe I heard the First Minister wrong, but that ame ndme nt that he just read, was it not unde r 4. 1 sub (1) ? MR . CHAIRMAN : 4. 1 (1) .•• MR. MINAKER: I had intended to speak on 4. 1 ( 2) . If we are not there , then I . . • MR. CHAIRMAN: We are on (2) now. MR . MINAKE R: O.K. MR. CHAIRMAN: That•s the amendment changing (

b) to (d) . MR. SCHREYER: Mr. Chairman, if the member agr ees , of course it 's his ri ght , but 4. 1 (2) to which I•ve moved a technical amendme nt, or a lettering amendment only, that is a

section that I would propose be hel d over as well, so if the honourable member wishes to speak now or would he wish to speak after the noon hour recess ? MR . MINAKE R: Well, Mr . Chairman, I believe that the Progressive Conservative Party are prepared to speak at this time on this particular section, and if it would ex pedite things , we could proceed. I think unless , that upon approving this in principle that we accept

Schedule C, if that is unders tood that we • d be accepting

Schedule C, the n I would suggest we 'Vait until after lunch; however dealing wit h the principle of the Lieutenant-Governor in-Council having the power to change the regul ation, or the

schedule , by simply Order-in-Coun cil, that we are prepared to speak on that princ iple at this time , but if it would ex pedite to deal with both matters after lunch then I would sugge st we do it that way. MR. CHAIRMAN: 4. 1 (2) as amended then - hold? Could we just technically amend this (

c) to (

d) and then hold it? MR . SCHREYER: The amendment having been moved is before the Legi slature and the

section is agreed , by leave , to be held over . MR. CHAIRMAN: We agree just to the technical amendment and then to hold the section. 4. 1 (3) (a) -p ass? MR. MINAKE R: Mr . Chairman, the only comment I would like to make under this

section is that in talking with some of the smaller producers in the Virden area, many of them maybe have two, three , four wells and do their own accounting, and if we unde rst and the prin ciple of the formula in its method of application, it will re quire considerabl e more accounting time to try and follow through with thi s, because it •s my understan ding that it will be a month by month calculation and also will involve daily productions in the calculation of some of these values .

And there was a concern by the producers that there would be an involvement in a fairly complicated accounting proced ure to follow, and this was the concern of the produce rs . I just make that as a comment , that the way they are prop osing to calcu late out the value for P as it is defined , that will create some accounting problems , as far as increased work and so forth . But that, I understand, is the produce rs • pro blem.

The other thing was that we would like to comment on the fact that the principle , the re seems to be a princ iple for prod ucing, and what will be provided in terms of dollars and cents for the producer at wel lhead price . And then there seems to be another philosophy

June 13, 19 74 4843 BILL 85 (MR . MINAKER cont •d) .•• in re gards to what will be th e mi nimum pr ice for ta xing purp oses. It• s my under standing, in re ading th e Act, that th e we llhead pr ice can never dro p below 5. 80 th e way it st ands, and we would pr es ume under th e pr es ent conditions of th e oil marke t that this would never happen , but it' s still a concept that •s being put forward, that re gardle ss of what happens on th e open marke t, th e pr oducer will always be committ ed to a minimum we ll head pr ice of $5 •. 80.

So wh er e in other cases, if it actually ris es hi gh er, th en he has to pay th e tax on that, th e incr eme ntal tax, so th er e se ems to be a philosophy here that th ere will be a minimum th ing that th e Governme nt will accept re gardle ss of what happens on th e open market if it should, for some unfor es een re ason, fall to below 5.8 0, and I suggest pr obably that it will never occur. MR. SCHREYER: That is exactly why we ar e asking for 4. 1 (2 ). MR . MINAKER: Mr .

Speake r, we will de bate that one late r on, but I think our concern is th e fact that 5. 80 is an it e m that is se t in th e Act and was a concern of th e_produ cers. MR. CHAIRMAN: Is this th e se ction that th e honoura ble me mber wants to hold, or -- Mr , First Ministe r, th er e ar e two te chnical amendme nts to 4.1 (3) (a) . MR . SCHREYER: Would you re ad th em please? MR . MINAKER: One, I be li eve , MR. CHAIRMAN: We ll, two places in ••. MR . SCHREYER: Yes, Yes, in two places, but it' s one motion: That th e pr opose d subse ction 4.1 (3) of th e Mining Royalty and Tax Act, as se t out in

Section 8 of Bill 85, be amended by str iking out th e le tte r C wh er e it appears on th e first line of page 4 and again on th e first line of th e paragraph in claus e (

b) commencing wit h th e le tte r M, and substitu ting th er efor, in each case, th e lette r D. It' s quit e simp le. It sounds complicated, MR. CHAIRMAN: Te chnical amendme nt - passe d? MR. MINAKER: Yes, Mr. Chairman, it• s just a te chnical thing, but I wonde r wher e does th e last change occur, wh er e we change "C" to "D" , in what part -- is that under M? MR. CHAIRMAN: On page 4, and if you•ll look under (

b) you'll se e a se ction headed M. MR. MINAKER: Yes. Okay. MR. CHAIRMAN : Those two te chnical amendm ents , pass ed? And th e clause se ction held , Agr eed ? Oh pardon me , th er e's some mor e her e ye t. 4. 1 (4) -D o you want that held ? (no) Pass. 4.2 (1) - Pass. 4,2 (2) - Pass . 4.3 - Pass. Clause 8- held , Clauses 9 and 10 we re re ad se ction by se ction and pass ed, Clause 11. 23 (a) - I beli eve .. MR. MINAKE R: Mr . Chairman, I wonde r if we can have

Section 11 held as we ll? I be li eve that•s be en changed, MR. CHAIRMAN :

Section 11. I be li eve th er e•s a te chnical ame ndment th er e, is th er e not? Would you please mov e it, Mr . First Ministe r ? MR . SCHREYER: Mr . Speake r , agr ee ing to hold ov e r se ction 11 -that was th e re quest, Then, in holding it over, I would mov e now that th e pro pose d

Section 23 of The Mining Royalty and Ta x Act as se t out in

Section 11 of Bill 85, be amended by striking out th e le tte r "C" in clause (

c) th er eof and substit uting th er efor th e lette r "D" ; and in agr eeing to hold ove r S ection 11, can I obtain clarification as to wh et her 4. 1 ( 3) , whet her you, Sir , indicate d it was to be held , I did not re quest it and I don't th ink it was re queste d, so could it be agr eed to be passe d? 4, 1

(3) Yes. MR. CHAIRMAN : 4. 1 ( 3) . Agr ee d? (Agree

d) MR. SCHREYER: Thank you. MR. CHAIRMAN : The te chnical ame ndment in 11- pass ed? And th e Clause to be held , Clause 11 - Hold? (Clauses 12 and 13 we re re ad se ction by se ction and passed,) Clause 14 - Th e Honoura ble First Ministe r. MR. SCHREYER: Mr. Chairman, this se ction will be held over as we ll, but I would mov e th e amendm ent now and have it stood ove r wit h th e se ction. I move that

Section 14 of Bill 85 be amended (

a) by strik ing out th e le tte r "B" in th e se cond line th ere of and substitu ting th er efor th e le tt e r "C" ; (

b) by stri king out th e word and le tte r "SCHEDULE C" in th e third line of this se ction

4844 June 13 , 19 74 BILL 85 (MR . SCHREYER cant 'd). • . and substit uting th er efor th e word and le tte rs "SCHEDULE D" ; and (

c) by adding th ereto imm ediat el y aft er the word "production" in th e last line the re of, the wor ds, "and whe re the quotient obtained by that div ision includes a fraction, if th e fraction is l/2 or les s the fraction shall be ignored; and if the fraction is mor e than l/2 the quotient shall be incr ease d to th e next whole number ." MR . CHAIRMAN : Those two te chnical ame ndments - pass? And th e Clause he ld. Agr eed ? (Agr ee d.) Clause 15 - pass? MR. MINAKER: Mr . Chairman, I wonde r if that can be he ld as we ll, becaus e . MR. CHAIRMAN: Clause 15 ? MR . MINAKER: Yes.

I th ink it ti es into the pr inciple that we wish to discuss. MR. CHAIRMAN : Clause 16; That compl et es th e bill till we come. back this aft ern oon. MR . SCHR EYER: Yes, Mr . Speake r , just for clarification. The pr ocess now would be that th is aft ernoon th e House Le ader would be calling this bill back for consider ation by th e Committee of th e Whole. MR. CHAIRMAN: Agr ee d. MR. PA ULLEY: But in th e inte rim you're going to inform . MR. SCHREYER: Yes. • .••• continued on next page

June 13, 1974 4845 BILL NO . 95 MR . CHAIRMAN: Bill No . 95 ,

an Act to amend the Legislative Assembly Act. What's the Committee 's will ? Clause by clause ? Page by page ? A MEMBER: Clause by clause . MR . CHAIRMAN: Cl ause by clause . Clause 1- pa ss. Just hold it a minute I believe there are some amendments. The amendments being distributed ? Clause 1 -O h I see, they have not been distributed yet. Does everyone have a copy of the amendments ? Cl ause 1 -p ass - The Honourable First Minister . I believe that you have an amendment . MR . SCHRE YER: Mr . Chairman , there would be an addition of a

section here as follows: That Bill 95 be amended by adding thereto, immediately after

section 1 thereof, the following section: Sec . 18 .1 1.1 The Act is further amended by adding thereto, immediately after

section 18 thereof, the following section: Exception under Sec . 44 of the Civil Service Act . 18 .1 Notwithstanding anything in this Act, or any other Act of the Legislature, a person to whom leave of absence is granted under , and who complies with ,

section 44 of the Civil Ser vice Act is not ineligible to be nominated for, or elected as, a member of the Legislature, nor is he disqualified , while he is on leave of absence under

section 44 of the Civil Service Act, from sitting or voting in the Assembly . And this is really consequent to the change that was made in the Civil Service Act . MR . CHAIRMAN: Clause 1.1 The Honourable Leader of the Oppo sition . MR . SPIVAK: I just wondered if the Legislative Council have -I appreciate the intent but I wonder does the wording complete what 's intended, particularly the last part , "nor is he disqualified while he 's on leave of absence under

Section 44 of the Civil Service Act from sitting or voting in the Assembly" Based on the changes in the Act under 44 he 's entitled if leave is granted to sit in the Assembly . MR . SCHRE YER: One Act is clear and the other is less than clear , and we thought to clear up any po ssible ambiguities. MR . SPIVAK: Well under the Act in its final form it was complet ed, leave is granted , and the person is entitled to be nominated and elected and to sit . What you 're saying here that he 's not di squalified if leave of absence under

Section 44 -s o in effect what you're saying is that this is really indicating that if there's any confusion in this Act you 're just basically saying that this Act is changed Act altering the other act which doesn't. MR . CHAIRMAN : The Honourable First Minister . MR . SCHREYER: Another way to put it , Mr . Chairman , is that the provision in the Civil Service Act is clear . We wanted to insure that the Legislative Assembly Act had a provision that was clearly worded so as to be in harmony with the

section 44 of the Civil Service Act . I suppose as a layman I could argue that strictly speaking this amendment I am proposi ng here is not necessary, may be redundant, but that's a layman's opinion , and in order to avoid any pos sible ambiguity or conflict of

interpretation as between the Legislative Assembly Act and

Section 44 of the Ci vil Service Act that it was better to propose this amend ment . It's complementary and certainly clarifies and avoids any pos sible ambiguity . MR. CHAIRMAN: 1.1 as amended -- pa ss; Clause 2 -- pass . The Honourable Leader of the Opposit ion . MR . SPlVAK: Well I guess this deals with the

section that was in the one amendment that was withdrawn . In one of the amendments -- (Interjection) -- yes. Well it was altered and changed . It applied both to a Crown agency and I guess would apply to the Civil Service , and that has to do with the ability of a per son to be able to sit in the Legislature during the Session and be in a position, if the contractual arrangements are such, that he can go back to the Crown agency and work there during the period of time in between sessions.

If I' m correc t, and I want to follow this because there is a problem of principle involved here which I think we should discuss and agree on or see if there's a consensus on it . At one point the Minister of Labour introduced an amendment to the Civil Service Act in which he indicated that a per son would be capable of sitting in the Legislature as a member having applied under 44 of the Act, and at the same time when the session was completed being able to go back wi thin the Civil Service in between sessions. That

section was put in and that

4846 June 13 , 197 4 BILL 95 (MR . SPIVAK Co nt'd) ...

section was withdrawn . That

section was withdrawn, that amend ment was withdrawn . -- (Interjec tion) -- Yes, I'm telling you with respect to a civil servant. MR. PAULLEY: ... applicable only to the Crown agenci es. MR . SPIV AK: I 'm sorry. MR . PAULLEY: And made applicable only to the Crown agencies, or to ... MR. SPIVAK: Within the Civil Service Act itself ? I think that was withdrawn as well . This really is the

section . MR . SCHREYER : No that wasn't withdrawn, it was modified . MR . PAULLEY: That wasn't -- I don't think it was withdrawn this past - in the House. MR . SCHREYER: It was made applicable to commercial enterpri ses. MR . SPIVAK: I' m sorry, I'm wrong , it's 44 (7) . But now I' d like to if I can understand how this complements it, and I think this would be the important thing, if I can .

Under 44 (7) which was passed, notwithstanding subsection 6, an agency of the Government that is en gaged in a commercial enterpri se may grant to a per son employed by it, and who's elected to the Legislative Assembly , leave of absence without pay for the duration of each session during which he sits as a member of the Legislative Assembly, and this subsection shall be deemed to have always been the law . All right . This

section says, having been before he was elected as a member an employee of a Crown agency and covered by a collective agree ment between the Cr own agency and a bargaining agency for unit of employe es that include the person continuing his employmen t with the Crown agency under the terms and conditions of the colle ctive agreement . Well we have some variation because the fir st Act refers to engaged in a commercial enterprise . A MEM BER: Well that' s the intent . MR . SPIVAK: Yes, but I think we have a difference in wording here and that may be something that should be cleared .

A MEM BER : If he's engaged in a commercial enterprise he has to have ... clause. MR . CHAI RMAN: The Honourable First Minister . MR . SCHRE YER: Mr . Speak er , certainly in principle we 'd be quite prepared to accept the suggestion of the Leader of the Oppo sition but it raises a complic ating factor and that is, that a Crown agency that is of a commercial nature , that is really the intent .

However if we restrict it to that by way of addition of words to restrict it to commercial enterpri se, that will not cover such agencies as, for example , the Securities Commis sion, and you get into a problem of definition . We would prefer to leave it in the wording that is here, although I repeat in principle certainly we do not hav e the difficulty in accepting the suggested wording , addition of the words "commerc ial" "commercial enterpri se" . But it will cause us some legal drafting problems . --( Interjection)-- Did you suggest commissions be added ? MR .

CHAIRMAN: The Honourable Leader of the Opposit ion . MR . SPIVAK: Well the problem that I have here I guess is the definition , either in the definition

section here or the definition of a Cr own agency . What is a Crown agency ? Is that a Co rporation ? -- (Interjectio n) -- No . So it could .be a commi ssion . So a Crown agency could be a commissi on . You mentioned the Securities Commission; it could be the Manitoba Health Services Commission . You see what we 're really talking about is essentially , I think , in one sense two different things from what the Civil Service Act implie d.

The Ci vil Service Act if there could have been, I think, reference made to hydro , to telephone , as two distinct corporations involved in commercial enterpri ses, and that's what I think the intent was - when we talk about a Crown agency here we 're talking about the whole gamut of ... MR . SCHRE YER: ... get the concurring advice of the Legislative Council . Clearly, Mr. Chairman , we are quite happy to make progre ss, if that's the word, one step at a time . The intent here is really to relate to agencies or corporations of a commercial enterprise nature .

We certainly are not continuing to force the argument or issue insofar as commissions, boards, that are of a non-commercial nature . The intent is to define or to consider Crown agencies or corporati ons as being of a commercial nature if they are financed in whole or in major part by their own revenues generated by their own activity, you know, as quite apart from being financed entirely by the Crown by way of appropriations or premium s, which really is not self-financing .

So therefore I would ask the Legislative Counsel to simply prepare the wording, after the word "agency" in the second line to add the words "of a commercial enter prise nature", meaning self-sustaining.

June 13 , 197 4 4847 BILL 95 MR . CHAIRMAN: Cl ause 2 as amended. Is that agreed ? Pass. Clause 3- pas s; Clause 4,

section 59 (1 ) (a) -pas s; (b)- pass; 59 (1 )- pas s;

Section 59 (2) (a) -p ass; (b)- pas s; 59 (2) -p ass;

Section 59 - MR. SPIVAK: I think there's a point to be mentioned here and I --( Interjectio n)-- Well it 's following 59 (2) but 59 (1) with respect to the indemnity . Again I pose the question to the Government, and I think that this question should be determined, and that has to do with remuneration received by the Cabinet in the sense that that's not fixed within the Act, it's by Order-in-Coun cil , and I guess under the Administrative Act .

There 's already been one experience that I' m aware of where this was done, not subject to an approval of the Legis lature , and that's of course capable of being done, and I've indicated as I did yesterday a certain posit ion with respect to the Premier and in doing that I completely forgot, and I must admit that that 's capable of being adjusted by Order-in -Council . But I 'm wondering as a matter of pract ic e, if the Act is going to be corrected, whether in effect it should rel;Ilain by way of Order-in-C ouncil or whether it should not be fixed subject to be changed in the Legislative Assembly itself.

Now that 's something that may or may not have been considered by the First Minister and the Cabinet , but I pose that as a posi tion now , and it doesn't relate by any particular concern on my part for what the Government will be doing , or is doing , and it 's not meant in any way as a refle ction at all on the Government in terms of any change or alteration that could occur , but I wonder if in principle at this point there shouldn't be con sideration for it to be placed in such a way that it is fixed within

an Act subject to change in the Legislature, and probably in the Legislative Assembly Act. And if that is a matter that should be considered -- (Interjection)-- That is the members of the treasury branch itself ? Yes I think so . Well I think the Leader of the Opposit ion is mentioned , and that's a matter of fact one of the reasons why I completely forgot . But I'm wondering as a matter of prin ciple whether it shouldn't, and whether it should not be considered, and it may that this may or may not be a desirable thing but I think we should at least determine it at this time .

Then of course we then can discuss the other feature that I mentioned with respect to the po sition of the First Minister . But that's not my intent . My intent is to discuss the principle of whether it should be done by Order-in-C ouncil or by Act . MR. CHAIRM AN: The Honourable First Minister . MR . SCHREYER : Well , Mr . Chairman , certainly I could comment at length on the suggestion but I will just confine myself to a very brief observation on the Leader of the Opposition 's suggestion.

There is a certain instant logic and even appeal to the suggestion but I am afraid that it is not one that we could accept, you know, with relatively little considera tion . There are profound ramifications to it , and I admit most of them are theoretical more than real , but, for example, the idea that the Legislature by statute law would set the salary of members of the Executive Council I believe to be a complete departure from parlia mentary custom and convention right up until this day .

I would be very surprised if there is any jurisdiction under the British parliamentary system that does it in that fashion. And furthermore, while it is only theoretical , occasionally a member of the Executive Council is a member not of this House , at least for a few months or a few weeks, and it's certainly con stitutional , but the salary if it were to be covered only by statute in the Legislative Assembly Act would pr eclude that pos sibility, which is largely theoretical , and really it would I think have a profound effect right to the roots of our system of British parlia mentary government.

I don't want to dismiss the Honourable the Leader of the Opposi tion 's suggestion but we are far from ready to implement it at this time . We'd have to ponder it . MR. CHAIRMAN: (The remainder of Clause 4 was read and passed) Clause 5- 62 (1 ) -- The First Minister . MR . SCHREYE R : Here, Mr . Chairman , there is a very simple amendment that the proposed subsection 62 (1) of The Legislative Assembly Act as set out in

Section 5 of Bill 95 be amended by striking out the figures "10�" in the fourth line thereof and substituting there for the figures and word "15 cents" . MR . CHAIRMAN: (Clause 5, as amended and Clause 6 were read and passed) Cl ause 7 (a) -- pass ; (b) -I believe there is an amendment. The First Minister . 7 (b) . MR . SCHREYER: Well , Mr . Chairman , I move that clause (

b) of

Section 7 of Bill 95 be struck out and the following clause be substituted therefor: (

b) by adding thereto at the end

48 48 June 13 , 197 4 BILL 95 (MR. SCHREYER cont'd) ... of clause (

b) thereof the words "but not including the expenses incurred in travelling to and from a sitting of the Committee in the Ci ty of Winnip eg ." A MEM BER: ... prejudice against your urban members . MR . CHAIRMAN: Clause 7, as amended, and Clauses 8, 9 and 10 were read and passed) MR . SCHREYER: Mr . Chairman , I think it would be appropriate if I were to indicate that with the passage of

Section 66 .4, Telephone Privilege s, to indicate to honourable members that with the passage of this

section it is hoped that there can be an avoidance of the sort of syndrome of problems of keeping track of members' telephone usage as has been the problem in the pp st . I know that the Honourable the Speaker has been quite distraught with the task he had of keeping track of the telephone calls and costs and just who it was that was placing calls to what pla ces, etc . It is hoped that this

section will obviate that problem with the honourable members 1 cooperation . It will narrow the list, Mr. Chairman , of those persons that the Speaker will have to track down to ascertain who was calling . MR . CHAIRMAN:

Section 11 -- pa ss.

Section 12 - 66 .6 (a) - the Honourable First Minister . MR . SCHREYER: Mr . Chairman , there is an amendment we are proposi ng here in response to the concern expressed that the use of this service should not be such as to enable an honourable member to order or commandeer, if that's the word , or to certainly such as not to allow an honourable member to arrange for the specific and exclusive purpose of going from point A to point B by direct arrangement and exclusive use arrangement of government air service , and accordingly I would move , THAT the proposed

section 66 .6 of The Legislative Assembly Act as set out in

Section 12 of Bill 95 be amended by adding thereto immediately after the word "may" in the first line thereof the words , "on a non-charter and incidental basis". That is about the best legal language we could find to make clear the intent and the constraint . MR . CHAIRMAN: 66 .6 as amended -- The Honourable Leader of the Opposit ion . MR . SPIVAK: Mr . Chairman , I have already indicated the posit ion to the Premier and I'd like to repeat it again .

I think that there should be an addition to this with respect to the member - and I appreciate the fact that there may be 57 members who may want to be in a position to use the service, if it is available, on the basis of service into an area that cannot be reached unless there is an air facility, but I wonder in the light of what I think is the general growing concern of the Legislature for the developments in Northern Manitoba and for the problems of the remote communities , whether there should not be provisio n that it should apply to the member , or the member and the Leaders of the two opposition parties as such.

I talked to the Premier about the Leader or his designate , but of course the designate could be 20 members within a caucu s, or four members within another caucus, and I think that probably is extreme, but I wonder if there should not be that provision on that so that in effect a J community is not isolated from the full political proc ess which normal communities who are accessible would have , based on the member and the representatives from the other

partie s, I parti cularly in dealing with matters in which there are concerns with respect to particular departments or administration and there is no way that there can be direct communication other than by travelling in . Now I would suggest that by limiti ng it in that way then there should not be concern of abuse or a misuse of this right . MR . CHAIRMAN: The Honourable First Minister . MR . SCHREYER: Mr .

Chairman, certainly the first part of the Honourable Leader of the Op positio n's co mment I would think is valid enough that with the changing times , changing circum stances, that there is need for greater access on a greater frequency basis than in years gone by with respect to northern regions and northern communiti es, and so on . It is in attempting to deal with that desire that we have made provision for, in 66 .4, for really un restricted telephone privileges of honourable members to any point within Manitoba, so that's a communication access improvement .

With respect to transport access improvement , certainly it is open to the opposition parties to allocate such amount as they see fit in their judgment for the purpose of covering the bonafide costs of transport of their Leader, or their designate , and that will vary I suppose from time to time as to just who is the individual; that's not the point here . They'll be able to allocate from those amounts of funds that are voted to the caucus research and caucus expense fund and that, as the honourable members opposite know, is being doubled , and we

June 13, 19 74 4849 BILL 95 (MR. SCHREYER Cont•d) .••.• wouldn't presume to indicate to honourable members opposite as to how they wish to allocate their caucus operating funds. If it is being doubled, that means then, Sir , that on the basis of $1, 000 imputed per member it would give a fund of $2 0 ,000, $21, 000 and $4 ,0 00, $5, 000 in the case of the Liberal Party.

They may choose to use 5, 10, 15 percent, I would think, or more if they wish, for the purpose of covering those kinds of costs that fall between the sections, or not covered by the sections of the Legislative Assembly Act and I would like to think that for the next year or two that it can be managed on that basis without restricting the necessary movement of members of opposition parties into the north on important business, such as they see fit. MR. CHAIRMAN : The Honourable Member for La Verendrye . MR. BOB BANMAN (La Verendrye) : Thank you, Mr . Chairman. My question on this

section is that at present isn•t it a practice that members of the Legislature can, if there is room on a government air service plane , travel at no cost to them? Would this be a special granting to something that we don•t already have access to ? MR . CHAIRMAN : The Honourable First Minister . MR . SCHREYER: Mr. Chairman, I don•t think it surprises anyone to know that there is always in addition to what is specifically provided for in law, there is always sort of unwritten modes of conduct which are decided on the basis of just common sense I guess I would have to say.

Certainly in the past honourable members who wish to go to some northern community if there was a government air service flight en route and the honourable member could find that out by calling the Government Ai r Service Dispatch Office , I don't think that there would be any objection. This is handled on a casual basis, common sense basis, and if it 's not abused - by abuse I mean if five or ten at any one time want to hitch a ride then it wouldn•t be a very tenable arrangement .

But certainly there is no desire or intention to prevent any honourable member from ascertaining whether or not there is a flight, that is going in any case to a given point , and if there is a seat available to make arrangements to go. That wouldn •t pose a problem . A MEMBER: It1s the unwrit ten agreement , it would not be up set. MR . CHAIRMAN: (Cl ause 12, as amended, and Clause 13 and 14 were read and pas sed)

Section 15 - 68. 1(a) -- The Honourable Member for Brandon West. MR . McGILL: Mr. Chairman, I think in debate on second reading reservations about this matter of indexing, that are held by some members at least, were expressed by the Member for Riel and the Member for Morris . This would apply equally to this section, or to the

section which we have already passed on 59 ( 6) . But I think that their positions would adequately reflect those which I would hold at this time . It seems to me that the building in of an indexing or cost of living feature into indemnities and to allowances is somewhat difficult to reconcile with the principles of government who are serious about controlling inflation. I certainly concede that in matters of pension there is a reasonable argument for making this condition, but I do feel, Mr. Chairman, that in principle this is something which I cannot suppor t.

I may have missed the comments of the First Minister on second reading in respect to the issue as it was origin ally presented by the previous mem bers that spoke , but I would appreciate hearing the comments of the First Minister in this regard. MR . CHAIRMAN: The Honourable Member for Morris. MR . WARNER H. JORGENSON (Morris): Mr. Chairman, I spoke on this during second reading as well and I just want to add one or two further comments. The First Minister in introducing the bill did say that various methods of calculating what might be rates of indemnities for members have been tried.

It•s true that in Ontario they set up a commission to study the whole question of indemnities; they came in, as the First Minister said, with a very elaborate report; the House of Commons has used outsiders to determine rates of pay. We did it on one occasion in this Legislature and the Rules Committee accepted those recommendations and passed them on to the Government, and the Government rejected most of the recommendations .

So , I sometimes wonder just how useful it is to deal with this matter by referring it to people who in many cases have never been in the Legislature , and now the First Minister is attempting to use another technique by indexing it. I just want to put it on the record that I think that this method will be equally as unsuccessful. I don•t think it will work, and I think that eventually members themselves are finally going to have to come to grips with this question and as embarassing as it is from time to time , I think we just have to

485 0 June 13 , 19 74 BILL 95 (MR. JORGENSON Cont•d) .•••• re cogniz e that in th e final analysis we are the ones that are going to have to make that decision, and we •r e the one s that are going to have to suff e r the criticisms that come as a re sult of those de cisions from tim e to time. MR. DEPUTY CHAIRMAN (MR. WALDING) : The Honourable the First Ministe r. MR . SCHREYER: We ll , Mr.

Chairman , I can certain ly appr eciat e th e uncertai nty, or the misgivings , perha ps ev en, to go fur th er , perha p s th e opposition on the part of those who have spoken thus far , to the concept that is embodi e d he re in not only se ction 68 but in se ction 59 which has alr eady pass ed, it's the same pr ovision, and fr ankly I am not so bold as to pr esume that this will be the answer for all ti me .

No le gislatur e as my Honourable fr i end from Br andon We st will know, no le gislatur e re ally binds futur e le gisl atur es , and if this concept appr oves for what ever re ason to be unworkable , although I have no such fear s, but le ss than de sirable, it can be changed.

Th e re ason why we very much want to pr opose this and have it put into the Act is that it pr ovides some rational guid eline and formula re ally - it's more than a guideline it would be a formula - a rational formula for ascertaining what is the right thing to do in te rms of adjustme nt of emolument to keep it in line with th e changing world and economy around us.

At the risk of be ing somewhat re petitious I indicate d ye ste rday , and re peat now, that we from tim e to time th is and other le gisl atur es hav e asked outside persons to do a study and invariably th ey come in with re commendations that the r e should be adjustme nts, th ere must be adjustme nts in all fairne ss , and that the re should be some rationale or some formula upon which to de te r mine this , and we have re ce ive d sugge stions such as that we should some how ti e this on a pr oportion aliz e d formula basis to the salary of judg es , and if not judges th en the Civil Service, se nior office r se rie s, or professional office r se rie s in the Civil Service, both of which sugge stions have be en dism iss e d by this Administration, the past Administration, and this Le gislatur e I think would give it short shrift as othe r le gislatur es have done such as Ontario.

But th er e is one possible ration ale tha t I fe el very confid ent does commend its elf to the support of honourable me mbers and all citiz ens, and that is to take as a base of calculation the averag e wage of the average of citiz enry of our pr ovince, and that , Sir , th e closest thing we have to that in statistical formulation is the composite industrial av erag e wage index. I feel very enthusiastic that this is as good a rationale as it is possible to conceive of, as good a formula as is possible to conceptuali ze . And it --(Int e rj ection)-- ye s, and it is worth a try.

A MEMBER: lt's what we apply in the Civil Serv ice . . • MR. SCHREYER: And I don't think that anyone can be critical of it be cause it re late s me mber s of this Ass embly who ar e re pr es enting the citiz en body of this pr ovince, and in their totality that is what you call av erage, Sir , and since we re pr es ent the - I don •t want to overus e the word - since we re pr es ent by de finition th e av erage of the citiz enry of our pr ovince, we th ere for e should be looking upon ourse lves in the same context in te rms of re muneration, and I say it certainly me rits imp le me ntation and a try.

Having said that I want to indicate that the re is ne ed to de le te Se ction (

b) or rath e r sub-clause (

b) in 68 .1 . There is no pr oblem with re s pect to

Section 59 , which we •ve alr eady passe d, in te rms of making the adjustm ent on the indemnity, but with re sp ect to the annual exp ense allowanc e what is re quir ed is to take the perce ntage incre ase in the consumer pr ice index and multi ply it, not by the industrial wage but by the actual expe nse allowance as it last existe d --(Inte rj ection)-- Pard on? I'm sorry, Mr . Chairma n, the re is no nee d to make any ame ndment it's fine the way it is . I re commend it to th e House. MR. CHAIRMAN : (C lauses 15 to 25 we re re ad se ction by se ction and pass ed) The Honourable First Minist er. MR.

SCHREYER: We ll, Mr. Chairman , I re ally will have to ask indulgenc e of honourable me mber s opposite for le av e to go back to

Section 68 .1 (

b) because --(Inte rj ection)- Yes, be cause the re fe r ence the re is to cost of living incr ease s in annual allowance. That is not re fe rrin g to the ex pense allowance. It •s my er ror . That is re fe rrin g to the pension and the ref ore (

b) re ally must come out othe rwi se it will re sult in a far gr eat e r incr ease than is inte nded. It just wouldn't be justifia ble , and the r ef or e the simp le amendme nt , Mr. Chairman I'm not formally moving it now I just want to explain it - would be to de le te (

b) which re fe rs to the industrial wage index and to substitute the words "the annual allowance re ceive d under this

part in the next pr eceding ye ar". It should be "i n the last ye ar" , I'm sorry. "In the next •

June 13 , 19 74 4851 BILL 95 (MR. SCHREYER Cont•d) .•••• preceding year" Yes , th at•s ri ght, that•s right , "in the next preced ing year" . And that then will simply mean, all that means is that the adjustment in the annual pension allowance will be adjusted simply, purel y and simply by the CPI, by the Con sumer Price Index. And re ally that's I think quite understan dable . If it•s left the way it is it would mean, as I said, an increase substantially greater than what is intend ed. So if I could have leave I would put before honourable membe rs that motion, that

Section 68.1 be amended by deleting clause (

b) and substituting the following: "(

b) the annual allowance received under this

Part in that next preced ing year." MOTION presen ted and carr ie d. MR . SPEAKER: Prea mble -- pass. The Honourable First Minister . MR . SCHREYER: Mr. Chairman, I find that there is another technical problem but I believe it can be easily resolved. I ref er honourable members to Page 3,

Section 60 (1 ) which reads now as follows: (

a) An amount equal to 1/3 of the indemnity and allowance payable in respect of the next previous year, after the end of the 2nd week. If passed in that wording it would actually resu lt , unintentionally it would result in less be ing advanceable at the end of the second week than is the case now, and that•s not the inte nt. --(Interjec tion)-- Well it's all of the expense allowance and one-half of the indem nity . I think the very simple way to correct it is to simply change the figure 1/3 to 1/2, and if that's agreed by leave , I would move that

Section 60 ( 1) be amended by deleting the word and fi gur e "1 /3 in the firs t line of para graph (

a) and substituting theref ore, the word and figures "1 /211• MOTION presented and carried. MR . CHAIRMAN: Prea mble -- pass; title -- pass. Bill be reported. Committee rise and repor t. Call in the Speaker . Mr . Speaker , the Committee of the Whole has considered Bill No . 85 and directs me to report prog re ss. The Committee has also considered Bill No. 95 and directs me to report same with certain amendments and asks leave to sit again. IN SESSION MR . SPEAKER : Order plea se. The Honourable Member for Logan. MR. WILLIAM JENKINS (Logan) : Mr .

Speaker , I beg to move, se conded by the Honourable Member for Winnipeg Centre that the report of the Committee be received. MOTION presen ted and carried. THIRD READING - BILL NO . 95 BILL No. 95 was read a third time and passed. BILL NO . 91 MR . PAULLEY: I wonder , Mr . Speaker , whe ther you would now call Bill No. 91, held by the Honourable Member for Morris . MR. SPEAKER: The Honourable Member for Morris . MR . JORGENSON: Mr . Speaker , I adjourned this debate for �y colleague the Honourable Member for Fort Garry . MR . SPEAKER: The Honourable Member for Fort Garry. MR .

L.R. (BUD) SHERMAN (Fort Garry) : Mr . Speaker , I intend to be very brief in my remarks to this bill, which would probably be met with considerable fe eling of relief on the part of the Minister and his colleagues. The legislation I think is the kind of legi slation that commends itself to all members of the House. The improvements made in the Super annuation Act and in the application of benefits payable under the Superan nuation Fund are sound and laudable ones and make it a more practical and efficient piece of Legislation in terms of the realities of life in Canada today.

What is being done with respect of portability is good and desirable and gi VBS the Act, and the application oft he fund itself, much more meaning, and brings it into line with the facts of working lif e and of pension life in modern-day society. I•ve had a chance to look over the notes that the Minister distributed to our side of the House yest erday in conjunction with the bill itself, and to discuss the basic rec ommendations with my colleagues and we find ourselve s, Sir , in total agreemen t with what the Minister

4852 June 13, 1974 BILL 91 (MR . SHERMAN Contrd) .••.. proposes he re . We wish to go on record as indicating our support for the legislation at this point, MR . SPEAKER: The Honourable Member for Assiniboia. MR . STEVE PATRICK (Assiniboia): Mr . Speaker, I do wish to make a few comments at this time on Bill 91,

an Act to amend the Civil Service Superannuation Act, and the three princ iples involved in the bill I do support and agree with the bill. One of the principl es, which I believe is a very good one , which prevented certain types of employment, non�permanent employm ent , fr om being classed as pensionable employme nt, and today that is changed regardle ss of whether he is on a permanent staff or not. This will apply from now on and I think it's a very good feature , Mr. Speaker .

The other princip le is amending the Superannuation Act, the requirement, which the Minister indi cated yesterday, the employee had to have five years service before he would be able to be transferred or take his pension along with him, and that requirement is deleted, I believe it•s long overdue that in public service we take the leadership , sole leadership , because if we don't I can•t see how in private industry today this same leadership will be shown or exemplified if we don•t do it in the public service .

I think that this type of legislation is required because of the altering concepts of the individual needs and government responsi bility in the changing of our tim es, Mr . Speaker . I believe that at the beginning everyone would agree that at the present time the expectancy, the age expectancy of people is much longer and people need a pension in reti rement to support these people , Employee pensions, Mr.

Speaker , have grown rapi dly in the post-war years, It was presu med that by 19 6 4 there were more than 10 ,0 00 plans in active operation, and certa inly these plans provided added security for income in retirement which benefits both the recipients and the prov ince, or the nation, Mr . Speaker . But I would like to indicate to you that the Dominion Bureau of Statistics survey in 1960 indicated that 8, 900 pension plans were esta blished with 2, 7 million employees , but show that only four percent of the employees leaving their employer before retirement had any immediate full vesting, Mr.

Speaker , and this is the reason that there is definitel y a rieed at the present time for some standard, for some standards of porta bility in private pensions as well as the public pension. I believe in the survey 31 percent of the covered employees would receive none of their employer 's contribution if they left before retirement; and nearly half of the remain ing covered employees would have to remain under the plan for 20 years or more to obtain all of their employer's contributions . So, Mr.

Speaker , this is an indication in itself that defi ciency and the no standards that we have prese ntly in the private sector . So I commend the Minister in br inging this Legislation and showing, and I hope that it would be an indication and some guidelines for the private sector as well, and perhaps we•ll be able to deal with that as the Minister indicated yes terday through the Privat e Member s• Resol ution and a special committee to deal with that. So I will not take any more time about full vestin g when the employees leave their employe rs. The other very important prin ciple in this Act, Mr .

Speaker , is the amendment that provides that when the employee who resigns elects to begin receivin g his pension, and his pension will be increased by the amount equal by any percen tage increase in the Canadian Consumer Pr ice Index since his resignation, if I have it correct ly. That was the other principle in the bill, and I certain ly do support , Mr .

Speaker , the legislation and hope that this will somehow at least be some small indication that what we •re doing in public schemes that will, I hope , be some measure and some indication to the priv�te sector as well that there must be some standards because at the present tim e you know there is no porta bility, there is no standards , and I hope that during the recess we •ll be ableto deal with that matter . I cert ainly support the Legislation, Mr . Speaker . QUESTION put and MOTION carried. BILL NO . 92 MR . SPEAKER: Bill No . 92. MR . PAULLEY: Bill 92, Mr. Speaker . MR .

SPEAKER: The Honourable Member for Brandon We st.

June 13, 1974 4853 BILL 92 MR. McGILL: Mr . Speaker , Bill No. 92,

an Act to amend The Teacher s• P.ensions Act, was described by the Minister as a bill that would add some por tability to the teacher s• pensions and prov ide for those teachers some additional mobility that they didn 't have without some penalties under the pension plan in previous years . I think that it does deal adequate ly with these changes, and that they are changes that are cer tainly des irable in the pension plans.

The matter of cost of living indexing I think too is one, a principle that is acceptable on all sides in respect to pensions, and I see that some improvements have been included in this bill in that resp ect. If there are any matters which might be discussed they are perhaps items which are not contained in the bill . I underst and that the teachers do have some concerns about a very small group of teachers with war service who are not yet in their view adequately dealt with under this plan, and it may be that some prese ntations will be made when the bill reaches the Committee stage .

But in princ iple this is a very acceptable bill, one which we can support, and I would commend it to the Asse mbly. MR. SPEAKER: The Honourable Member for St. Boniface. MR . J. PAUL MARION (St. Boniface) : Well, Mr. Speaker , we too of the Liberal Party would like to add some comment to the discussion on this bill by saying that the Liberal Party has long advocated, and actively, for the past thr ee years some of the measures that are be ing invoked by Bill 92.

Ther e's no doubt that portability as a factor that is now going to give freedom of action to a great number of teachers , and this is fully recognized in the bill. I think that we're not locking in people , we're giving them the opportunity of moving to other prof essions if because of health reasons , or be cause of ambitions in life they can best be fulfi lled in other prof essions, and this is cert ainly an excellen t feature that we have long advocated and are pleased to see come into being. I think that indexing is of course something that today has become a way of life .

It makes a great deal of sense , and it doesn't penalize as is the case now for a great number of people who are on pension, and who went on pension before the advent of indexing are being punished . They have to live with means that they provided for themselves when the cost of living was far fr om being what it is today. Mr . Speaker , without taking any more time of this House we would like to voice our support for this measure , and some of the areas that we'd like to explore further with the Minis ter will be able to be explored when it•s in the Committee stage . QUESTION put and MOTION carried. MR .

SPEAKER: The Honourable Minister of Labour. MR. PAULLEY: Mr. Speaker , it •s very obvious there would be no point in attempting to go into Law Amen dments Committee at this hour .

I am going to suggest that you adjourn the House, but before doing that I would like to indicate to members that there was an agree ment that members would meet at 1:30 , or certain members would meet at 1:30, in relation to the Mineral Taxation Bill, and what I would intend to do for this afte rnoon is to go through routin e proceed ings and if possible go into Committee of the Whole House to consider the Mineral Bill and have it passed.

Following that we would go into Law Amend ments Committee to consider bills ref erred, and this even ing I think it may be advisable to call the House for 8: 00 o •clock, and the n go into Law Amen dments following that. So Mr . Speaker . . . MR . SPEAKER: Agreemen t be ing to adjourn, the House is now adjourned and stands adjourned until 2:3 0 this aftern oon. (Thurs day)

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Collection	Manitoba — Debates (Hansard)
Citation	30-1-173
Type	hansard
Volume / chapter	30th 1st hansardpdf 173.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	5c5f3fe4cd4690c0ff593e1ec04b00fcaba96748

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