Manitoba Hansard — 1 May 1979 (Sitting 51B, 31st Legislature, 3rd Session)

31-3-51b

Manitoba — Debates (Hansard)

- ... • ISSN 0542 - 549 2 Third Session - Thirty-First Legislature of the Legislative Assembly of Manitoba DEBATES and PROCEEDINGS 28 Elizabeth II Published under the authority of The Honourable Harry E. Graham Speaker VOL. XXVII No. 518 8:00 P.M. Tuesday, May 1, 1979 Office of the Queen 's Printer for the Province of Manitoba

..,. Time: 8:00 p.m. LEGISLATIVE ASSEMBLY OF MANITOBA Tuesday, May 1, 1979 CONCURRENT COMMITTEES OF SUPPLY SUPPLY - ECONOMIC DEVELOPMENT MR. CHAIRMAN, Mr. Morris McGregor (Virden): Call the committee to order . We're dealing with Page 24; 2.(b)(1)-pass - the Member for Brandon East. MR. EVANS: Now that we're on the very important topic of transportation , I have a number of areas that I would like to explore with the Minister and his staff , and find out precisely what the position of the government is on a number of matters; and also to ask some questions as to recent developments .

Because I think it goes without saying that transportation continues to be a very vital fac tor in the economic development of the Province of Manitoba, transportation as it affects our agriculture industry , but also transportation as it affects the tourist trade , as it affects the development of manufactur ing , among others .

I'd like to begin by discussing the issue that's very uppermost in the minds of many farmers, and that is the whole question of the Grow's Nest Pass Rate Agreement , which goes back in our history into the 19th Century , nevertheless has played a critical role in maintaining relatively cheap rail transport costs for Manitoba farmers and western Canadian farmers .

As we know , I think, as we should know in this room , the railways have been rather unhappy with the Grow 's Nest Pass Rate situation for .. . in order to save time , let's just refer to it as the Crow Rate - I think that's the common terminology ; that the railways are unhappy with the Crow Rate , they maintain that they're not receiving adequate revenues from the Crow Rate in order to maintain their infrastructure, in order to maintain the kind of service that is required to get Manitoba, Saskatchewan and Alberta grain products to internat ional markets.

So therefore, generally speaking, the railways are in favour of abolishing the Crow Rate, of getting rid of it, or somehow or other changing the situation so that, as they would explain, that there be less of a subsidy involved. Now traditionally, the provinces of Manitoba, Saskatchewan and Alberta - and by traditionally , I mean for decades - have opposed the railways, have opposed any move by the railways and the federal government to , in any way, undermine the Crow Rate. And this fight that has been fought over the many decades is going on.

In fact, we may be on the verge of some very serious changes in the Crow Rate. I know there is some moving of position on the part of the Alberta government , and there may be on the part of the Manitoba government, I'm not sure . And this is something that I'd like to explore .

Just where does the Province of Manitoba stand with regard to the Grow's Nest Pass Rate Agreement , as that agreement affects the cost of transporting prairie grains, Manitoba grain products to market, because we know or we should understand in this room , that if those rates are increased, if the Crow rate goes out, if the railway rates are increased , it comes out of the pockets of the farmers of Manitoba. It's we in Manitoba that's going to pay the shot.

What's going to happen in effect, is we're going to have a real transfer of cost from the shoulders of the railways - if you like - or the federal government - I should perhaps say, and the federal government to the shoulders of the prairie farmers , to the shoulders of the prairie governments , to the shoulders of the prairie municipal authorit ies. So that generally speaking , there is something very basic here when we talk about the Crow rate. So I would like the Minister to advise the committee as to just where we stand with regard to the Crow rate .

Is the Manitoba government, is this administration in favour of the maintenance of the Crow rate as it now stands? That's question No. 1. Question No. 2: is there any consideration of a d ifferent position at some future time; and question No. 3: how does that relate to the positions that are taken by Saskatchewan and Alberta? And I ask that third question because I know the Minister does meet with the other Transport Ministers in the west and this matter is one of the primary topics for consideration. MR. CHAIRMAN: The Honourable Minister . 3489

Tuesday, May 1, 1979 MR. JOHNSTON: Well, Mr. Chairman, as the honourable members know, the Premier has been at meetings re this very topic of moving grain or agricultural products in the Prairie Provinces . The position of the provincial government is very clear, and I quote the opening statement of the Premier : "This is the Manitoba position, the benefits of the statutory grain rates must continue to accrue to the western farmer unless it can determine that a superior system will result.

" Now , the problem is that naturally , the railways are complaining that they are not making enough money , and the federal government is looking at studies or ways that these rates can be looked at so that all parties are happy , but that Manitoba 's position has been and will continue to be that the grain rates that are presently in western Canada must continue until there is something better to be pu t in its place. Now we also say that grain handling and transportation system is being hampered by inadequate rail revenue . Consequently railways require additional revenue for transport ing grain .

This may mean a change in the means of subsidizing the movement of grain . So the position of Manitoba has been made very clear by the Premier. We as a province, or the Premier of the province , has brought it together as everybody knows .

He's brought the people from the loading in B.C., from the grain companies , from the railway companies and from the government s of the three prairie provinces together to discuss this particular problem, only on the basis that the problem of moving grain is there and it's going to get greater , and unless we can get a meeting of the minds on this situation that is satisfactory to all, we will continue to be in a very bad position , and that is that we will not , in the 1980s, be able to move the amount of grain to the ports or markets as it should be moved . ........

So thl3 provinces are really a leader in trying to solve the problems that are facing the farmer, the grain companies, the railways, and also the people that are loading grain at the ports. We haven't at any time said that we want to see the rates go, unless something better can replace it. MR. CHAIRMAN: The Member for Brandon East. MR. EVANS: Well, I guess the Minister , Mr. Chairman, alludes to a dilemmma I guess that's facing us, and that is on the one hand we know that if the Crow rate is in any way altered , it's going to be altered to the immediate detriment of the farmer .

In other words we believe , as I understand Saskatchewan and Alberta also believe that if the Crow rate is changed it will mean that the cost of transporting grain to market will rise, therefore money will come out of the pockets of our farmers. So there fore there 'll be less money, less income available to us in Manitoba or in Saskatchewan or Alberta . On the other hand it's recognized that the railways are not receiving what they consider to be adequate revenue to maintain this entire system .

Whether it be branch lines, whether it be rolling stock, whatever it be, to take the grain from the prairie basin, from the grainaries of the • prairies to the Canadian seaboards , to world markets .

So there is the dilemma , and I suppose an argument could be made that Manitoba should not insist on maintaining the Crow rate , that we should recognize that the railways have increasing costs and that the rates should be allowed to be raised in some fashion so that additional revenues could accrue to the railways and that they in turn would have a greater incentive to put the equipment in, to upgrade the branch lines , etc. in order to ship out our grain and therefore to have a better grain handling system . So I say that there is a legitimate dilemna.

But I would gather , while the Minister alluded to it, I would gather though that the position of the government of Manitoba today is that the Crow rate is inviolate; in other words no way , shape or form is the Manitoba government going to agree with any change whatsoever in the Grow's Nest Pass Rate Agreement . MR.

JOHNSTON: Well , that 's our position , as I mentioned in No. 1, and as I follow down to No. 2, this may mean a change in the means of subsidizing the movement of grain and our position is that until all parties are satisfied with their lot as far as the grain handling is concerned, we'll have a problem and maybe solve it in one area, and we'd have it crop up in the other . We'vH made an attempt to try and bring all parties together in order to solve this problem .

The province has maintained our position , that the statutory grain rates must continue to be there, unless it can be determined that there is a superior system will result. In Saskatchewan , the Minister has presented the proposal that if the federal government would pay the difference between the Crow rate and the Snavely rate suggested in the Snavely Report, that he in turn would pay the difference - on grain, that is - he in turn would pay the difference on other farm products in Saskatchewan . That has been brought forward .

We have a situation where Alberta has subsidized oil for shipment on the basis that they would pay 90 percent of the rental costs of tank cars, which would be costly. The Saskatchewan Program would cost the Province of Manitoba approximately $2.5 million , and the Alberta move , with rapeseed 3490 ..

- -- ... Tuesday, May 1, 1979 oil alone, would cost us about $160,000, and that's just the beginn ing. Alberta has already had requests from other agricultural groups to ask for the same type of subsidy. So if it starts there, it could go on peas , or many other products . We in Manitoba say that there must be a continuation of the present situation until a better situation can be found , or until a better system can be found .

I don 't think it's going to be found overnight, but I do think that the moves that Manit oba has made in trying to get everybody together to solve the problem is a step in the right direction. MR. EVANS: The Minister referred to a figure of $2.5 million as a cost to Manitoba, I believe he said as a subsidy in the movement of grain . If I'm correct I think he said $2.5 mill ion. Could he indicate how that comes about, and what do we get for that $2.5 million?

What happens if Manitoba - I'm not advocating that Manitoba should spend that money - but the Minister said that that was a cost, that was a number he mentioned. What do we get for that $2.5 million? MR. JOHNSTON: Well, the $2.5 million is the figure that it would cost Manitoba if we went to the proposal of Saskatchewan , and Saskatchewan has proposed that the federal government pay the difference between the Crow rate and the rates published in the Snavely Repor t. Now, that would be paid by the federal government.

If the federal government does that , the Saskatchewan government says that on rapeseed, alfalfa , peas, lentils, etc ., they would do the same thing . They would subsidize the movement of those particular products in Saskatchewan . Under those conditions, or under that system, that would cost the Province of Manitoba approximately $2.5 million.

If we were to immediately do what Alberta has done, which is to subsidize . the movement of rapeseed oil by giving a subsidy to only 90 percent of the rental cost of tank cars, that would immediately cost us $160 ,000, so the proposals or the movements of the Saskatchewan government would be costly to us and the proposal of - or not actually a proposal - the decision of the Alberta government to do what they've done would cost us money also and certainly I don't think it's the end in Alberta , I think that they will have to subsidize other products as well.

So we in Manitoba don 't want to see a situation where everybody is going their own way. We would rather see a situation where we could have a meeting of the minds to solve the problem that would be beneficial to all and until that 's done, until that particular situation comes about, we maintain that the present rates of subsidy should be maintained. MR. CHAIRMAN: The Honourable Member for Brandon East. MR. EVANS: The question then , Mr. Chairman, the present rate of subsidy should be maintained . You mean the Crow rate should be maintained as it is. Is that what the Minister means? MR.

JOHNSTON: The Crow rate should be the present rate of subsidy , or Crow rate should be maintained until there is a better way of doing it that is satisfactory to all parties in the movement of grain in western Canada . MR. EVANS: Well, I would think implicit in the Minister's statement in referring to the Crow rate as a subsidized rate, implicit in there is the thought or the conclusion that the Crow rate does not provide adequate compensation to the railways to cover the costs of moving grain from the prairies to ports.

Is the Minister saying that the government of Manitoba accepts the cost estimates of the Snavely Commission? Do you accept the Snavely Commission which was set up among other things to cost the actual expenditure involved in moving grain? Because there is a big argument, there is a lot of area for argument as to what is the cost facing the railways . It's a whole question of depreciat ion rates , depreciation methods, and it's a very very complicated thing, and the federal government set up this Snavely Commission to do this costing .

And the Snavely Commission , I believe, concluded that the railways weren't being compensated fo r the movement of grain . I am asking the Minister , does he accept the Snavely Commission's conclusions and is he therefore saying that the Manitoba government recogn izes or agrees with the federal government , with the railways , with the Snavely Commission , that the Crow rate is not compensating the railways adequately? MR.

JOHNSTON: Well , the Province of Manitoba and the Province of Saskatchewan agree that the Snavely rates are uair rates for moving grain, and I believe that it's obvious why the Saskatchewan government came up with its proposal to the federal government to try and see that the railways were properly compensated for the movement of grain . The railways lost $240 million last year . Now , under those circumstances , a person losing that kind of money is not happy with the 3491

Tuesday, May 1, 1979 and are trying to find ways that they can make a profit and we say that we would be agreeable to them making a profit or at least breaking even, but only if a system can be devised that will not change the lot of the farmer in Manitoba. MR. EVAIIIS: The Minister refers to a loss of $240 million by the railways. I imagine that's a per annum loss and I imagine it refers to the entire prairies , or does it refer to Manitoba only? MR. JOHNSTON: It's a per annum loss. MR. EVANS: For Manitoba or the prairies? MR. JOHIIISTON: No, that's for all the prairies . MR. EVANS: Thank you , Mr. Chairman .

Well, it seems then in what the Minister is saying, and I'm not quarrelling with the numbers or anything like that , it seems though that there is now a recognitio n by the Province of Manitoba that the Crow rate is putting the railw ays at a disadvantage . I know the Minister has told us that until a better system is devised, Manito ba is sticking with the Crow rate . But it seems to me from his remarks that a better system , whatever that is - or a new system , or another system - I don't know what other system there can be that is not going to cost the farmers of Manitoba more money .

If the minister has some ideas along these lines, I think the members of the committee would like to hear these suggestions , these items, but it seems to rne that the way the railways would look on the matter and the way the Federal Government would lool< on the matter , is that it's high time , they say, that the Manitoba farmers and the prairie farmers pay more for the shipment of grain and this means , as I've said earlier , a deduction of income from prairie farmers.

Now maybe when the minister says another system be devised, or a new system . or a better system bE! devised that can replace the Crow rate, maybe he's got something else in mind , but either you're going to be subsidized if you agree that subsidization is involved - and you know, this is a revelation because at one point the Prairie Provinces argued that there was no subsidy involved -- they argued that the railways were doing very nicely with the Crow rate, that they had other advantages, they had other subsidies that they could get by with.

For instance, I remember Chief Justice Emmett Hall saying to us that the railways were heavily subsidized for branch line maintenance and they weren't using those moneys for the branch lines, they were using them to build towers in Toronto or goodness knows what they were doing with it, but they weren't necessarily using it for the branch lines and yet they were being subsidized to the tune of millions of dollars for this.

And of course , there 's the old old story of all the land rites, all the mineral rites included given to the Canadian Pacif ic Railway, and all the other advantages and other benefits and my God , this has been the banner cry of farm movements long before any of us were alive around this table . Years back the farmers in Manitoba , Saskatchewan and Alberta were very concerned about the monopolistic position of the railways and how they were treating the farmers of the prairies unfairly .

So traditionally we have not accepted the premise of the Federal Government in the railways, that the Crow rate did not cover the cost when we also considered the other advantages that the railways have and the other subsidies that they get. If the Prairie Provinces and if Manitoba is now prepared to accept the Crow rate as being a rate which doesn 't cover the cost of grain movement ,tthen you have to look to another system as the minister himself said .

The question then is if there 's another system being thought of, does this system mean money out of the pockets of the taxpaye rs in Manitoba, money out of the farmers pockets of Manitoba , or doe it mean a different kind of Federal Government subsidy? MR. JOHNSTON: Well , I'd like to make it clear because the honourable member tries to infer that the Province of Manitoba is looking towards the farmer having to pay more money in the province , and I want to make it clear at the present time that that is not our position . The current level of benefits must be maintained ; that is our position .

There are many ways that you can do it. You could have a straight subsidy to the farmers as the province of Saskatchewan has done ; they 've said that if the Federal government will pay the difference between the Crow and the Snavely on grain that they would in turn , as a provincial government , pay a subsidy to the railroads to move other types of products. So the Saskatchewan government has come up v.ith something, at the present time the province of Alberta has come up with something and both would be very costly to the province of Manitoba.

We have put together a study , the University of Manitoba study , the study is being funded by the Depar tment of Agriculture at the cost of $30,000 .00. A consultant to the study is the Department 3492 • .. .. _

Tuesday, May 1, 1979 of Agricultural Economics, University of Manitoba. Dr. Ed Tyrchniewicz and Mr . Chuck Framingham comprise the princip study team. The study is being conducted in two phases, (

a) a historical

summary and a review of current issues , June 1 completion . We're asking for that completion. (

b) an analytic analysis of changes in rail line network , using mathematical model , agricultural production .;: patterns under the various rail rates scenarios, determined by a linear programming model. And the impact on communities utilizing regional input-output tables, requested by September 30th. No, I'm not in a position to tell you that we have the answers or what we believe the answer should be. But we are working on it, and we have seen what other provinces have recommended. We have seen what one province is doing, which we believe is not the way to go.

We believe that we should possibly be able to find a solution with the Federal government and with all the parties involved to maintain the present level of benefits to the farmer in Manitoba. MR. EVANS: Yes, I thank the Minister for his statement and I'm interested in hearing about this particular transportation economics study , which is fine . Will the government of Manitoba, because I'm sure it is not a new question , inasmuch as the Minister has told us that Alberta has already ·or is about to buy railway cars and that Saskatchewan -(Interjection)- They are now buying . Okay .

Well that's fine, so that Alberta is now spending money to buy railway cars. Saskatchewan has made an offer, a subsidization offer to the Federal government that the Minister has described to us. Will the government of gmanitoba be prepared to put cash on the table at some point in some way so that the farmers of Manitoba are not going to be hurt? MR. JOHNSTON: I'm not prepared to say that until we have the results of the study that we have ongoing at the present time.

One of the most important things is that there is no reason for farmers to grow anything if we can 't move it, and if the Federal governments and provinces have to take a look at it from a different point of view, that's what we're trying to do. Unless you're going to have a completely national railroad that is completely subsidized by all the people, I don 't know of any other way of looking at it, other than to try and have studies and get all the people involved together to find the best solution to the problem . MR.

EVANS: Well, is the Minister then telling us that - first of all, he says he can 't make a commitment at this time in any detail but that there is a study going on, that he does appreciate that our sister prairie provinces are either spending money or are about to spend money in some way to protect the position of the farmer. My question to the Minister is, will the Manitoba government be prepared to take initiatives at the appropriate time to ensure that the farmers of Manitoba are not hurt economically by any alteration in the method of assessing transportation costs for grain? MR.

JOHNSTON: Well maybe I haven 't been saying it right, but I think that's what I've been saying, that the Manitoba government is moving to find a solution to the problems in such a way that the farmer will not be harmed. And we have said until we come up with a satisfactory solution that will maintain the benefits that are presently there, we don't really feel that there should be any changes made . If the reports and the studies and the work that's being done by the - I might say that there's a study being done by the Federal government as well.

If all these reports come together with recommendations, certainly we would have to take a look at it. As I said, the two provinces to the west of us are prepared now with provincial taxpayer dollars to subsidize the farmers . MR. EVANS: I thank the Minister for his statement. So I would indicate that if it came down to it, the government of Manitoba would be prepared to do something in the way of materially assisting the farmers so that they are not going to be hurt financially . If it should come to pass.

It's hypothetical, but it may not be that hypothetical in a few months from now if it should come to pass that the Crow rate is changed or disappears . I gather then - I'm not trying to be repetitious - I'm just going to assume, from what the Minister said , that at some point the Manitoba government is going to be prepared to put some cash in the system somehow to ensure that the farmers aren't hurt. MR. JOHNSTON: Well, the province of Manitoba , as I said , is working very hard to see that the benefits that are there now, at the present time , are maintained to the farmer .

We also understand that if the other provinces - and the other provinces are not prepared to sit back idly at the present time. You have two provinces to the west of you that can subsidize this thing without batting an eye and they are prepared to do so. And both of them have come up, one with a suggestion and one has made a move . 3493

Tuesday, May 1, 1979 Now, we are not about to agree to move into anything like that until we have our studies. We don 't agree that we should all be going in different directions and we would like to have something standard across the western provinces . MR. EVANS: Well, as the Minister will appreciate, there has been considerable co-operation among, not only the prairie provinces, but among the four western provinces, at least since 1973, emanating out of Western Economic Opportunities Conference that was held in Calgary, at which time there was a Ministerial committee set up on western transportation problems .

And goodness knows, studies have gone on. A lot of money has been spent by the provinces and by the Federal government to do various kinds of studies to somehow or tther come to grips with some of these problems that we're talking about. And there have been a number of suggestions made . Moving off the Crow rate per se, it's hard to dissociate yourself just with rail transport costs, dissociate yourself with those and some of the other elements, such as the branch line operations.

I'd like, though, to go to another area , which has been considered in the past , but I'd like to . put it point blank to the Minister . And that is, is the government of Manitoba in favour of the nationalization of the railway roadbeds in Canada? MR. JOHNSTON: The Government of Manitoba, as far as I'm concerned as a member of the treasury bench, has never really discussed that at any time that I can recall. That discussion has not come forward at any time . So I am not in a position to say whether we favour it, or whether we don't.

I would like to suggest that the philosophy of our party is one of not nationalizing anything . MR. EVANS: Well, . the Minister says that that has not been discussed by Cabinet. Has this item been discussed by the Minister with his western colleagues, the western Ministers of Transportation Policy, this item of the nationalization of the railway roadbeds . I'm talking about the railway roadbeds , not the railways per se. MR. JOHNSTON: I personally have not, and I can't speak for other ministers, I personally have, with other ministers , not been in any discussion of that nature . MR.

EVANS: So, is the Minister saying that the government has no position on this matter, or is that they are against the question of nationalization of the railway roadbed? MR. JOHNSTON: To my knowledge , we have not developed any posit ion on that matter . And I might say, I heard the Honourable Member for Burrows say "any thing ". I said, "The philosophy of the government is such that we do not favour nationalization of anything ." But I did not say to him that we had any program or position on it. MR. EVAN!): Mr.

Chairman, going back to the WEOC Conference, Western Economic Opportunities Con ference of 1973, a position paper was developed by the governments of western Canada at that time, the four provincial governments, which favoured the nationalization of the railway roadbed .

I might add for the information of the Honourable Minister that the initiation of this proposal , the idea, came from Peter Lougheed, and the Alberta Conservative government , that the railway roadbeds of Canada should be nationalized , to put the railways on the same basis as the harbours of Canada , whereby all the major ports in Canada, all the major harbours in Canada, are owned and operated by a federal government or a municipal government.

In some cases by provincial, but mainly by federal, such as Churchill , so that that infrastructure is owned by the federal government - Churchill , Thunder Bay, Vancouver. A ship comes in, it uses the facilities, it pays a fee, a charge, whatever , and so on. But the facility nevertheless is owned and operated by the government of Canada . In the case of air transportation, the airlines of Canada do not own and operate the air terminals. The air terminals , all the major air terminals in Canada , are owned by the federal government ; a few are owned by municipal authorities .

And the taxpayer s in general pay for the operation and maintenance of these air facilities , air terminals, the air terminal infrastructure; not only the maintenance of the runways , but the provision of weather information , the provision of assistance to the pilots to land , etc . With re~Jard to road transportation , obviously the trucking companies do not own the highways . The highways of the country are owned by the provincial governments , and in some cases by the municipal governments, and a fee is charged to the truckers and others who use those 3494 :..

Tuesday, May 1, 1979 A MEMBER: Is it sufficient? MR. JOHNSTON: I don't know whethe r it is suffic ient or not. Mr. Chairman, the Member for Wolseley asked me whether it's sufficient. Whether the fee is sufficient I'm not sure, Mr. Chairman. I'm not arguing that point.

The point I'm making is that it was agreed to, after Premier Lougheed of Alberta had suggested it and presented us a brief with it on the matter, it was agreed by the . western provinces that we should press the federal government to nationalize the railway roadbed so that therefore the railways would be put on the same basis as water transportation, as road transportation and as air transportation, and that the C.P. and C.N., and indeed other railways - there are two or three other minor railways - the B.C.

Railway and the Alberta Northern Railway and the Northern ; , Ontario Railway, and so on, would use, in common, would use this roadbed.

And the theory behind it ultimately was that we would, hopefully, lessen the burden on the taxpayers of western Canada, ultimately lessen the burden, because it may not have been stated explicitly, but it was at least implicit that perhaps we could reduce the cost burden to western Canadians by having the roadbed, the railway roadbed, owned and operated by some federal or national agency, and that the C.P. and C.N. and other railways could be free to operate over that roadbed, as the airlines are free to operate into air terminals, as the trucking companies are free to operate over the roads, as the ships are free to operate in and out of harbours.

So perhaps the Minister has nothing further to say about this matter, but , for his information, I say that there was unanimity and I just wondered whether that unanimity was still there or whether Manitoba has disassociated itself from that position that the other provinces had agreed to. MR. JOHNSTON: I can say that the Manitoba position on that has not been one of disassociating from it or working with it. I am informed that neither Alberta or Saskatchewan have raised that issue at any of the conferences on railway or handling of grain in the last two years. MR.

EVANS: Well, the Minister may be correct; they may not have raised it in the last two years, but if his staff would care to look back to the WEOC Conference and other documents prepared and consult with their colleagues in Alberta, they will indeed find material on this matter. MR. JOHNSTON: My staff informed me that it was something that was brought up. It has not been carried through as an issue or a subject for discussion at the meetings in the last two years, so the Province of Manitoba presently does not have a position on it. MR. CHAIRMAN: 2.(b) - the Member for Brandon East. MR.

EVANS: On the question of branch line abandonment, I wonder if the Minister could give us an update as to where we stand now in this whole matter . Just by way of background, as members may appreciate, there was the Hall Commission, Chief Justice Emmett Hall, a very fine gentleman, who conducted what I thought a very thorough review of the whole question of branch lines, you know, the continued operation or the discontinuing. And let's face it , some of them should be discontinued.

No one is suggesting that every branch line in Manitoba, Saskatchewan and Alberta should be maintained; obviously some of them should not be.

But, on the other hand , there are many that Manitoba believed and our staff in their research - it wasn't my research; it was the research of the staff - in consultation with information given by the municipalities of Manitoba, the farm organizations , the Manitoba Branch Lines Association, and others , in consultation with all these groups we came to the posit ion that this is what we thought, in Manitoba , that if there has to be abandonment we'd go this far, but no further, because this was a realistic position .

And we were pleasantly surpr ised that by and large the Hall Commission was fairly sympathetic to the position of the Manitoba government at that time and treated us , I would say, very fairly and indeed went beyond that and said there should be a prairie rail authority that would oversee the operation of branch lines in the prairies that too long they had been neglected by the Canadian Pacific and Canadian National Railways .

Too long had those railways been recipients of subsidies, millions of dollars of subsidies for branch line improvement , branch line maintenance and too long .,. had those railway lines been using them for other than branch line maintenance . .., I remember in a discussion with Chief Justice Hall along with my colleagues from Alberta and Saskatchewan on one occasion a few years ago, he said to us, and this is after his report had been handed down and been made public, he said you know if you or I were recipients of public money for one purpose and spent them on another purpose and another cause, we'd be thrown in gaol, but the railways of Canada can get away with it.

They receive millions of dollars for branch 3495

Tuesday, May 1, 1979 line maintenance and upgrading and they turn around and spend it on other purposes , and that this is unconscionable, and I agreed with the Chief Justice at the time. At any rate he suggested in his report that there be a prairie rail authority which would oversee the upgrading of those branch lines that would be left. He said okay, let' get rid of X, Y, Z, etc ., those will go but these others will stay at least till the year 2,000 and certain others will be protected in a certain fashion and they must be upgraded and these moneys must be utilized in a fair fashion to upgrade them .

If we are going to have them, let's use them, let's keep them in good shape . Now the federal Minister of Transportation, the Honourable Otto Lang, was not very happy with Mr. Hall's report , in fact I think he was highly annoyed with the Hall Commission, I understand that he refused to discuss the Hall Commission Repo rt with Mr. Hall and his commissioners , which is almost unheard of. Where a Minister of the Crown who has set up a Royal Commission, gets a report and then doesn 't want to discuss it with the commissioners, obviously Otto Lang didn 't like that report.

He wanted to see more branch line abandonment , in my view, and I certainly do not sympathize with the point of view of Otto Lang. As a matter of fact , as far as I'm conc erned Otto Lang is a disaster for western transportation , a great disaster . We are far better off - I remember dealing with little Jean Marchand - little Jean Marchand from Quebec understood and ;. sympathized with the needs of western transportation and western farmers far better than Otto Lang could ever understand it.

At any rate Otto Lang proceeded to ignore the Hall Commission Report and instead of settinguup a prairie rail authority which would be a positive force to upgrade branch lines in the prairies, he set about establishing the Prairie Rail Action Committee ; and action indeed , the Prairie Rail Action Committee was to kill as many branch lines as Otto Lang could possibly kill without getting killed politically himself .

That's what the Prairie Rail Action Committee is all about, and it's made a farce, in my view , of the Hall Commission and I think that this government should be on its guard against the Prairie Rail Action Committee. I think it should be on its guard against Otto Lang because Otto Lang , as far as I'm concerned , is no friend of Mani toba. Whether you are talking about air transportation , whether you are talking about Churchill , or whether you are talking about the railways, Otto Lang is no friend of Manitoba , and he is no friend of the west , and the sooner he gets kicked out of Parliament the better .

Since there are no Liberals around I guess nobody will disagree with my statement. At any rate, I see a statement has been passed around . I haven 't had a chance to look at it, but maybe the Minister would comment on it. Where do we stand on the question of branch line abandonment?

Is the Minister concerned about the negative impact of the Prairie Rail Act ion Committee headed up by a cohort of Otto Lang by the name of Fred Anderson from Regina - whether you 're satisfied with what the Prairie Rail Action Committee is suggesting - whether your able to fight their recommendations - what progress can you report with regard to saving those branch lines which deserve saving . I know that's a matter of judgment , Mr.

Chairman, I know it's a matter of judgment because some branch lines shouldn 't go; they 've gone decades ago - there are bushes growing over them - the lines are there if you can find them underneath the trees , I mean, so we're not talking about some of those; let 's face it, let's be realistic , some of them have gone.

But there 's a grey area here whereby the federal government and Otto Lang in particular and his Prairie Rail Hatchet Committee are ready to kill them , but I think we should fight the good fight and try to keep some of these and keep them courtesy of the federal government, not the courtesy of Manitoba taxpayers . So, perhaps the Minister would like to update us on this . MR. JOHNSTON: Well the member is quite right as we've given him on the first three items of the report or the

summary that I have given him . The Hall Commission studied 1401 miles of line and recommended that 167 miles be added and 615 miles be abandoned. It's quite true that the Minister at the present time, and it's not my intention to comment on any of the Ministers in the federal governme nt or any other government in my Estimates , but the Railway Actio n Committee that was established in 1977 conducted a review, as we say here, an additional 448 miles for abandonment , and 170 miles for retention to the year 2,000.

Now following the release of the Prairie Rail Action Committee Report , the federal Minister of Transportation were at least advising communities of redress available through the Canadian Transport Commission , the CTC, that this would requi re setting up of local retention associations. Manitoba has encouraged the development of local associations through the branch line association of Manitoba, the Manitoba rural municipalities and media releases .

The pro vince has been providing , as I told the member in the House, technical assistance to any group that sets up a retention committee on how to set it up, how to make application to the CTC to maintain that line, and at the present time in the province of Manitoba there have been retention committees set up on the - well maybe I could do it another way for the honourable members -- the PRAC Report was Carman/Belmont to Somerset , 39 miles , 11 elevato rs; Birchwood 3496

... ~- Tuesday, May 1, 1979 to Baden 29 miles, 1 elevator ; Belmont to Elgin 42 miles , 13 elevators ; Lenore/Kenton to Wheatland 15 miles , 2 elevators ; Lenton/Delaney to Deloraine 22 miles , 6 elevators; Miami/Morris to Somerset 62 miles, 13 elevators ; Miniota / Quad ra to Hamiota 11 miles, 3 elevators; Neepawa to Rossburn Junction 4. 7 miles , no elevators; Oakland/De lta Junc tion to Amaranth 53 miles , 4 elevators; Ridgeville/Emerson to Fannystelle 6.9 miles, 1 elevator ; Rossburn Junction to Russell 104 miles, 21 elevators ; Ste.

R ose/ Ochre River to Yorkton 37.1 miles, 2 elevators ; Winnipe gosis, Sitt on to Winnipegosis 20.1 miles , with 3 elevators . The retention committees that have been set up to date in the province of Manitoba are the CN Morris to Hartney; CP Deloraine to Delaney ; Neepawa to Russell , C.N.; C.N. Ochre River to Ste . Rose; C.P. Ochre River to Crand all and C.N. Delta Junction to Amaranth, and assistance has also been provided to the indus trial centre at Rivers in efforts to maintain access to rail service .

And we're very sure or, as I am infor med, think that Inwood Subdivision CNR Interlake is in progress of being set up. Now, we have set up special assistance to provide development of producer trucking costs, establishment of current potentia l tra nsport demands and development submissions , and we definitely continue to press for full compensation to offset any losses resulting from the abandonment. We also re-propose the reduction of grain handling and transportation capacity at a time when the system is unable to meet present demands in a growing international market. Mr.

Chairman , the province has been active ly working to set up and work with the Retention Committees on how they should be set up, what they have to do to set them up after they have decided to organize , we go in and give them all the advice they require . We inform them how to make the presentation to the CTC, also Dr. Ray, with his department, works with the Department of Highways . They also are very active in this program in that certainly there will be highway costs involved .

Certainly , also' the effect of the farmers with the railroad line abandonment is something that the Minister of Agriculture is involved in and is working very closely with us. So that when the hearing for that particular line or Retention Committee is held the province will be in a position to make their posit ion known and only then, and that's the only place the province has to make their positio n k now n. I did , when I read out the names of the lines that were recommende d f or aband onment in Man itoba , I neglected to say that the re are dates here, and the ones in 1979 are Birc h R iver to Baden .

Well , you have Quadra-Hamiota ; i t's to be abandoned December 31st , 1979, and the rest are 1981 and 1983. So we have Retention Committees set up. That 's in the Ochre River-Crandall , which is Miniota, 19.6 miles , and the other one in 1979 is Kenton -Wheatland . There has not been a request for a Retent ion Committee set up on that particular one . I think that's the one , if I'm not mistaken - and I just checked with my staff - that that's where the manufacturers .. . No, that's down south . We also have a map here showing the lines according to the numbers that have been given you in your run down there .

We have numbered them one , two, three, the same as they are numbered in your small brief. I might say that the Province of Manitoba is certainly not in agreement with the figures of the PRAC Report of $24 million for the costs of highway upgrading, generally, and we certainly don't think the six cent a mile for 20 miles , I believe , or over 20 miles, is something that's of benefit to Manitoba. It might not be too bad in Saskatchewan but it's cer tainly not a benefit in Manitoba . And we oppose those parts of the PRAC Report and will be opposing them , certainly, when we have the opportunity to. . MR.

EVANS: Well , I than k the Minis ter for that information . It' s very useful. Would it be too much to ask for a copy of the map at s ome time, not tonight , but would it be possible to get a copy at some time ? You could send it to me. MR. JOHNSTON: Yes. MR. EVANS : Thank you. Okay, tha nk you . One other item unde r point (2) it says, "Detail listings of the Manito ba rail network and lines recommen ded for retention abandonment and the current status are attached for refe rence. " I didn't have it atta ched to my sheet and 1 just wondered is there something that I'm missing ? MR.

JOHNSTON: No, these sheets can be supplied to you , but that 's the detail with the dates and everyth ing on them , and that 's the PRAC one and this is the Hall one here . MR. EVANS: We'd appreciate gett ing a copy of those two, if that was possible . 3497

Tuesday, May 1, 1979 MR. JOHNl~TON: I can see that the honourable member gets more , I will give the member these now and we will make some extra copies for him . MR. EVANS: All right, thanks . Well , one copy is probably adequate; we can xerox it, too . Okay, :::, thank you very much. There are one or two other detailed items. The Minister stated that the preference was to work through the local Retention Committees, Retention Associations, which is fine and there is some logic in doing that.

I am really not knocking that, but what I am concerned with , is the Minister telling us that it is legally or constitutionally impossible for the government of Manitoba , per se, the government itself, is it impossible for it not to make direct representation to the CTC with regard to the railway branch line abandonment question? I mean surely it seems to me that we're not precluded.

And the reason I ask is I'm sure the Minister doesn 't mean that because I, myself, on behalf of the Province of Manitoba , have appeared before the Rail Committee of the CTC and presented briefs and have been submitted to questioning by the railways with regard to various lines in the past, and it seems to me that it's quite in order if the province so desired , to make that direct representation to the CTC. MR. J OHN!;TON: The province will be making a direct representation to the CTC, and we can. As I said in the House to the Minister , we don't have any other recourse .

We can make a presentation and we can write letters, but it's far more effective for the province if we can stand up and say that we believe this line should be kept or that line should be kept, and they say on what basis ; do the municipalities agree, this type of thing. We're in a much better position, we feel, and I might say all of the western provinces feel that you 're in a much better position when you're making representation on a specific line which has a Retention Committee formed . MR. EVAN S: Thank you, Mr. Chairman. Well, the Minister has confirmed my view, and that is that ~ it is possible.

Whether it's the best way to go that's a matter of judgment. I'm not quarreling with that because in fact there is a lot of logic to work with the local committees. In fact , I recommended that myself a few years back but it doesn't preclude, if circumstances should warrant, the province from making direct representation to the federal authorities as deemed necessary at some time and I gath ,er that's what the Minister has told us. So that's fine ; I don't want to belabour that.

Just one other detailed point on branch lines and that is under point (5) you state that the province continues to press for full compensation to offset any losses resulting from abandonment. Has the Minister's staff, Mr. Chairman, made any estimates to date of potential losses resulting from what looks to be those lines that will definitely be abandoned?

Maybe this is too early and if he says no, that's fine, but maybe there are some estimates and if there are some estimates of losses , you know , do we have any idea of what are we going to lose in Manitoba; and also what degree of success has the Minister and his officials exper ienced respecting the gaining of some compensation from the federal government to offset any losses resulting from abandonment? Is there any indication that the federal authorities or the railways are prepared to provide some compensation, either to the communities or the farmers, or to the province?

Because , as the Minister said, we've got to put more money into highways - and that 's a real expenditure - and so have the municipalities. The farmers have got to ship - some farmers , not all - some farmers have to ship thei r grain many many more miles, and that's a real cost: gasoline , wear and tear on the truck, etc. So I just wondered whether there has been any indication of compensation forthcoming from either the federal government or the railways . MR. JOHNSTON : No, there has been no indication forthcoming from the federal government.

There hasn 't been an indication from the federal government as to whether they agree with the figures that are presented in the PRAC Report. The PRAC Report gave a figure of approximately $24 million for the whole of western Canada for compensation and I suggest that we have been working in the Department of Highways at the present time. I suggest that across western Canada it would probably be five times that amount , to be the proper compensation , and the compensation of six cents a miiEl over 20 miles in the Province of Manitoba is not adequate . And we have made that posit ion known .

I must say that we have disagreed with those two suggestions in the PRAC Report and will continue to, and we say that full compensation must come forward to the provinces and to the farmBrs, who are going to be inconvenienced by the loss of these lines if they are moved , if the Retention Committee is not able to hold them there . So we say that it isn't the Province of Manitoba that has come along with the PRAC Report , or the Province of Saskatchewan or Alberta , or any other province ; it's the Minister in Ottawa who 3498

Tuesday, May 1, 1979 has commissioned the report and they have made suggestions, and we don't agree with them and we don't agree in the loss of many of these lines, as we have shown here. MR. EVAN S: Well, Mr. Chairman, the Minister is saying then, that the province is pressing for compensation but thus far there has been no positive sign that some compensation will be forthcoming . Is there any hope whatsoever for some kind of compensation for whatever? MR.

JOHNSTON: I think that, if I'm not mistaken, recommendation, if there is a presentation by a Retention Committee to keep the Morris to Hartney line and there is a fight put up to keep it, and the CTC say that they don't agree and it's going to go, we then would say that we want full compensation. I think it has been said, and if I'm not mistaken I have a couple of colleagues here ~ that are involved in that particular line that have been involved in the fight on that particular line, that there's no question that they would ask for full compensation . MR. EVANS: Well, my question, Mr.

Chairman, is whether there has been any sign or any indication from the federal authorities or the railways that some kind of compensation would be forthcoming? MR. JOHNSTON: The only sign that we've had at this point is what has been recommended in the PRAC Report. We do not agree with it. MR. EVANS: Mr. Chairman, I'd like to go on then to - this topic of branch line abandonment is very important and we could spend weeks on it -(Interjection)- At any rate, I thank the Minister for that information he has supplied us and we look forward to getting a copy of the map. I'd like to go on to another topic.

I have, I guess, three more topics on transportation . One of them is the Port of Churchill . Can the Minister update us on what's happening to Churchill. By way of historical perspective, I can mention, Mr. Chairman, that Churchill, the only prairie port in existence, has become somewhat antiquated in the past ten years, antiquated in the sense that shipping vessels, boats, have become larger, there have been changes in navigation, changes in techniques, and so on, and as a result there is a necessity for Churchill to be modernized.

In my view, there is a need for the harbour to be deepened, for new facilities to come in and so on. Now, I think it was about five or six years ago, the federal government announced that they would put some money into Churchill , but it seemed to me that that money was really, for all that was said and done, was really in the way of maintenance money , that is, sort of a holding action, you know, keeping it more or less on a status quo basis.

It wasn't money that would necessa rily bring the port of Churchill into the late 20th century, modernize it, bring it forward 50 years, because it's at least 50 years old, I had gathered . And I think it's incumbent upon any government of Manitoba to continue to press the federal authorities for the upgrading of Churchill, not just the maintenance but the improvement of Churchill so that it can accommodate these big new vessels that are coming in from Europe or wherever they come from .

There are a lot of other things that have to be done as well, but can the Minister update the committee on any recent efforts in this respect and just what is the assessment of the state of the Port of Churchill now? MR. JOHNSTON: Well, let me give you a brief run-down . I thank the members for giving me notice last night and we were able to put it into sort of a brief form. I have been reasonably close to the situation but I have had discussions with Mr .

Ed Guest who is the Executive Director, the Manitoba representatives on the Churchill Development Board are Bishop Robidoux of Churchill, and we have replaced Mr. O'Connor with Mr. Henry Einarson , MLA . The other provinces in western Canada have representation on that board by elected members, and we felt that to be very close to the situation, we would like to have an elected member on, too . We, this year, will be making a grant to the Port of Churchill Development Board of $26,400, and each prairie province is doing that.

The major expenditure, rail, in 1978 was $4,105,000 for siding extension and bank widening and bridges. 1979, there was $8,770 ,000 in rail relay and surfacing . And Item 2, the 1977-79 $6 million plus dredging program has not been completed but is still being carried on through 1980. The major activities and accomplishments are Number 1, season for 1979 extended from 90 days to 104 days , July 20th to October 31st . The experimental container movement for 1979, that has been carried on.

New ice-strengthened vessel Motor Vessel Arctic built in 1978 and commissioned for voyage into Churchill after season closed, further test facilities of season extension. I take that, and I believe and I know , that the Arctic has been commissioned and it is for voyage into Churchill after the season closes . And of course , then the further test 3499

Tuesday, May 1, 1979 facilities for season extension will be done when that vessel 1s m there . The grain program 1979 was a record year of 30 to 33 million bushels, anticipated, pardon me, in 1979. We hope to reach that record. In 1976 it was 28.4, 1977, 27 million, 1978 there was a labour strike up there, is was 23.5. So with the longer season that's atticipated from July to October 31st, we expect to have a record year in 1979. The ongoing research is the potential of movement of potash and the Port of Churchill Board are working with Saskatchewan Potash Corporation in this regard .

The examination of movement of non-board grains and a major research into effects of permafrost on rail subgrades by the federal government. The Port of Churchill Churchill Development Board reviewing a proposal to examine further increases in the shipping season, use of icebreakers and ice-strengthened vessels . That's basically what is continuing on the Port of Churchill, and I'd like to say to the honourable member that Manitoba regards itself as a Maritime province because we have a salt-water port , and we want to see every use made of it and every upgrading that can possibly be done .

It's something that only very few, well, we're the only inland province that has that terrific benefit. MR. EVANS : I thank the Minister for that information, Mr. Chairman. That is useful information. Obviously there are some developments that are occurring. We all look forward to a longer season, that's always been a hope to somehow lengthen the season. I don 't know whether members recall, but in 1970 the federal government tried to send the ice breaker, the St. Laurent into Churchill in DecembE!r - the St.

Laurent incidentally was the ship that brought the SS Manhattan through the Arctic seas and that was quite a famous voyage, but the St. Laurent couldn 't get into Churchill that particular winter, December 1970, this was a Centennial project, because of the buildup of ice. The wind had blown the ice in and it was difficult.

So at any rate this has been a long time endeavour to lengthen the shipping season for Churchill , and without getting into the details of how this might happen , because I know there are a lot of aspects to this, such as the icing in the Hudson Straits, and the question of insurance, and so on. I'd just like to ask the Minister whether the province of Manitoba is satisfied with what has gone on.

I know we have the board , and incidentally, the board that we have there that the Minister referred to and that the MLA for Rock Lake is a member of, which I think is a good experience for that MLA beca use he can get some idea of all those problems, and I think it's probably a good move because there are other MLAs from other provinces and I think it's a good move. But I think that we we've ~JOt that board because of the failure of the federal government to promote Churchill to the extent that it should be promoted .

It was a failure of the federal government in the view of the western provinces to promote Churchill as it should be promoted, to develop it as it should be - that led to the formation of this board, and in fact it was the late Gordon Beard who was very instrumental in pushing for a local port commission, a local board made up of prairie provincial representatives and local representatives. So, we've gone this far , and I wish that board every success.

But my question to the Minister then is, is the province satisfied that the federal government is doing sufficient to upgrade the Port of Churchill to bring it in to the late 20th century so that it can handle the new ships that are now available to take grain around the world? MR. JOHNSTON: No, I can sincerely say that the province of Manitoba believes the federal government should be doing even more, and we are certainly working with the Port of Churchill Development Board to try and accomplish that, and as a government we are trying to accomplish that.

The Board of Churchill Board has done an exceptionally good job since it's been set up and when I take a look at the history of it, it operates right here out of Winnipeg offices , very close to all the wain people in the area, and has worked very hard in the accomplishments since the board has been set up as one that was much better than before . And I think the pressures from them, from that board which has direct representation from government on it, plus the strength of the Manitoba government , anything we can do, is something that is good .

No, we're not completely satisfied with everything that has been done . We're happy that it 's been done to now but we believe there can be more done . MR. EVANS: Specifically and again I don 't want to spend too much time on this , but spec ifically could the Minister indicate, is there any major serious limitation with the Port of Churchill now? In other words , can the Minister indicate , what is the major obstacle now in the use of the port of Churchill, apart from weather.

What I've been alleging, more or less, or implying in my remarks about the ability to handle the big ships , is that still probably the major problem , to bring the bigger vessels in, or some of that equ ipment that they 've got on the Port , to put the grain into the vessels and so on. What is the major, if there is any one major , single major handicap that that Port has, that should be overcome to improve it? Can the Minister enlighten us on that? 3500 ::

Tuesday, May 1, 1979 MR. JOHNSTON: I'd like to suggest , and not being a complete expert, that the handling facilities, the handling of grain cars and the upgrading of the handling of grain cars is probably one of the most important items at the present tim e. MR. EVANS: The handling of grain cars? I'm not quite sure what the Minister means . Do you mean simply, is this the deficiency on the part of the railway organization, or is it some physical problem? MR.

JOHNSTON: It's the handling of the grain cars from a point of view of unloading the grain cars and again loading the grain into the boats, but the unloading of the grain car facilities, I think "'~ is one of the most important things that has to be done . MR. EVANS: Does this require some new equipment that should be put in place? MR. JOHNSTON: Yes, I'm told it does require some upgrading , and I think also the handling of the new type of containers , and they 're experimenting on that at the present time . I think those two items have to be overcome with the equipment that is needed to do that.

I'm told by the board that that's one of the most important things that has to be done, or the most important thing that has to be done at the present time . MR. EVANS: Is there any indication from the fed eral government that they're willing to spend some money on that in the near future? MR. JOHNSTON: I haven 't personally had any indication at the present time that they 're indicating that they will do it.

I can ask the Chairman of this Commission to maybe break a rule of the committee and ask the member on the board if the federal government has given any indication to the board that they will be doing that, but I personally haven't had any indication from the federal government, through the board . MR. CHAIRMAN: The Member for Rock Lake . MR. HENRY J. EINARSON: Mr. Chairman , I appreciate the comments made by the Minister indicating that I will be part of the Port of Churchill Development Board .

I should probably, for the edifice of the members opposite, inform them that an annual meeting is being held in Edmonton next week, at which time I will be officially placed on that board. Secondly , Mr. Chairman, the problem has been , it's a historical one, that the nature of the rail going into Churchill has not lent itself to hopper cars, which is something that we've had across this country.

And as a result of that, as the Minister did indicate to you, and he gave you a very good outline of what is happening today in regard to the upgrading of the Herchmer Line, which is between Gillam and Churchill , some $7.1 million and this is being replaced by heavier rail. Now , having said that, we have no indication from the Federal Government as to just what is going to happen when this is completed . We have yet to experiment I would suppose, by waiting to see how it's going to work out in regard to taking hopper cars over that rail after those heavier lines are put in place .

But if that does come to be successful, then it's going to mean that the unloading facilities of railway cars at the Port of Churchill will have to be redesigned in order that we can facilitate hopper cars. This is really in essence what I think the minister was indicating - proper track, according to this particular situation . But the Port of Churchill , the fact is the minister said it's in the Province of Manitoba .

It doesn't benefit us directly in this province but moreso it benefits the Northern Saskatchewan farmers and farmers who can grow are limited in what they can produce, and barley is one crop that is up in the northern part of Saskatchewan , and therefore benefits them. But as a result of the three Prairie Provinces I can add to the minister's comments that the famous Mr .

Gray, Secretary of that association for many, many years fought very dil igently , very hard , and it was a political battle whereby he had to compete with the Lakehead and Montreal , and all the rest of it, but more or less probably I'm diversing from the question a little bit. As I understand it, we can't indicate at the present time just exactly what will happen until such time as the rail has been upgraded and if we are able to get hopper cars in there, then we will be able to proceed from that point on. MR. EVANS: Well thank you, Mr. Chairman.

I thank the minister for asking the future member or the present member, or the about to be member of the Churchill Development Board , for that 3501

Tuesday, May 1, 1979 information, which really led to the question that I was going to ask and just for clarification 1 will ask it. Did the member, I guess I should ask the minister but maybe the member could answer, the Member for Rock Lake , and that is: Did the member say, Mr. Chairman , that there is no clear indication when that line, the Herchmer Sub-Division, when the line all the way to Churchill in effect, will be upgraded with heavier steel , so that it'll take the hopper cars?

Is there any year that we think that, because we've been talking about that for many , many years and I know there's been work on it, and Mr. Chairman , the member has indicated , when should that process be completed? Is there any indication at all? MR. EINARSON: No, Mr. Chairman , through you with the minister I would like to say to the Member for Brandon East, that that 's as far as it has gone so far. The Federal Government , which is a federal responsibility , has given us that assurance that this amount of work will be done, approximately $10.1 million and I think Dr.

Rea, you could correct me if I'm wrong on some of these comments , that is to be spent this coming summer . And that's as far as the Federal Government has indicated . The thing is, and the unfortunate situation, Mr. Chairman , is that we have an election coming up on the :!2nd of this month and we don 't know whether there could be a change in government, and as a result of that who knows what the future will tell?

There could be a complete change in policy, but that's all we know at the present time as to the commitment of the present Federal Government, is what the minister has indicated and what I added to it. MR. JOHNSTON: I'd just like to say I probably put the Member for Rock Lake on the hot seat a little sooner than he wanted to be on it, but I do know he takes his position on the board at the next meeting but he has represented me on two occasions at meetings of that board . MR. EVAN!): Thank you , Mr. Chairman .

Well, at least this development that money is being spent , may be spemt very slowly , progress may be rather slow on the part of the CNR but at least they 're moving in that direction because the Vice-President for the Manitoba Region , when the Hall Commission Report was published had stated that the CN was going to cease and desist from upgrading that line because of the Hall Commission Report , and I think there was a misunderstanding and I remember Chief Justice Hall being absolutely floored or flabbergasted by that attitude and statement by the CNR Vice-President , and I think there was quite a bit of communication and somebody or other in the CN I think, later said , well no, that was not the official position of the CNR, that they would continue and attempt to upgrade that line to Churchill .

I think , Mr. Chairman, the member wants to make a point. MR. EINARSON: Well, Mr. Chairman, perhaps I should indicate to the Member for Brandon East that the minister requested that I make a trip last summer to the Port of Churchill. It was just before the House prorogued. The CNR put on an inspection car and at that time a group from China and a group of experts from Russia went up to do a similar inspection of the Herchm er Line, what is called the Herchmer Line. I flew up to Churchill and then went aboard the train in Churchill in the evening .

We started off early the next morning to inspect this line and as the Member for Brandon East is familiar with the President, Mr. Ralph Hanson , I believe whom he was talking about, sort of gave me the impression that he wasn't really interested in upgrading this particular line . But having made my comments and I think perhaps , Mr.

Chairman, I should add that because of what the Premier of this province did when he was able successfully to summon a conference in January last, and because of the fact that he made mention of the Port of Churchill, and its importance to the whole of the grain movement in Western Canada, I believe that those two facts had some contribution insofar as impressing upon Mr.

Lang and the CNR railroad that something should be done . 1 do agree with the member with some of the comments he is making that they really weren 't interested, and as I said earlier , it's been historical and I believe if the truth were known, that the Federal Government and the CNR would have liked very much to see the Port of Churchill close up completely . But 1 want to say, Mr.

Chairman , as the minister did indicate that I've represented him while 1 haven 't been on the board , on several occasions and this was one of them - whereby 1 took a strong position insofar as this Port of Churchill is concerned , and as a result of these and as 1 said because of the Premier 's actions last January and meetings following from that, that 1 think there's been some change of heart insofar as Mr. Lang is concerned and as far as I am concerned the CNR had no choice but to carry out what they were instructed to do. MR. EVANS: Thank you .

Well I'm prepared to go onto another topic unless the minister wanted to add anything further. Well, very briefly , I don't want to belabour this particular sub-item in the 3502 '·

..

Tuesday, May 1, 1979 Estimates - into the field of air transportation, and ask the minister whether he has from his staff any idea, or from any of the information that's available to him in his department, any idea what has now happened to Transair, inasmuch as it has been taken over by Pacific Western Airlines We know that Transair has unfortunately had a history of many years of financial losses for some good reasons, one of the major reasons being that it didn't have adequate basic routes to serve and it simply wasn't given a big enough market area in my judgment to be able to make a profitable enterprise of it.

At any rate, the long and the short of it is that it was about to go bankrupt, and as a matter of interest to the minister, Mr. Chairman, on more than one occasion Transair approached the former government to be purchased by the former government, and the former government I might add, was not interested for different reasons. So much for ideology and all that.

We were not interested in buying out Transair although the owners at that time, the majority of the owners were interested in us taking it over and as we know now, of course, PWA has received permission of the Canadian Transport Commission to purchase it and is now integrating, the two are now integrated.

The question I have is: What has been the impact, and maybe this was a logical thing that should come about, you know, I think it would be good to have Manitoba's own air line functioning with head office in Winnipeg and so on, but that is not to be I guess, but has there been any negative impact on Manitoba from this takeover by PWA? Have we lost any jobs from this takeover, and if so can the minister indicate what the loss has been? MR. JOHNSTON: No, there has been an increase of 15 jobs since the ACT authorized the takeover by PWA. There were 122 jobs in Manitoba, April 30 and as of April 23, 1979 there's 677.

They have been able to overcome the problems with the pilots, flight attendants, etc., with the dispatchers, the clerical staff, customer service and the maintenance - the maintenance work Transair-PWA is getting additional maintenance work in Winnipeg, such as painting, eight Department of National Defence Buffalo aircraft, overnight maintenance for Nordair, overnight maintenance for Frontier Air Lines, building 200 bar boxes for PWA and repair and overhaul of all seat upholstery for combined Transair-PWA fleet.

The takeover as it's described has increased jobs and the problems with the different departments coming together have been solved internally by themselves . MR. EVANS: Well, that's good to hear, that there have been, I think the minister said 15 more jobs this year compared to last year roughly, and that overall there hasn't been any loss in jobs by this integration of the two coppanies. We'll have to watch this and that's good, if that's the case that's good. Okay. My other point on air service is with regard to the City of Brandon.

The City of Brandon is now serviced by a third level carrier; I've forgotten the name of the company, it's a small company, Perimeter, and it's operating under a subsidy that was promised by the Federal Government in the election of 1974, and there's a long history of ups and downs with regard to the implementation of that service. There were some promising reports in the papers about the Perimeter service to the City of Brandon.

I'm wondering if the minister has any updated information as to how Perimeter is doing in servicing Brandon and Dauphin, I guess they were servicing both City of Brandon and the Town of Dauphin? MR. JOHNSTON: All reports that we've had on that particular service through Dauphin, Brandon, to the western points, has been good.

You know , there was a lot of people I might say, that didn't think that the service would be used because of the price to fly versus the price to travel by car or by bus, but the reports that we have from Perimeter Air are that they are very satisfied with the traffic that they are doing at the present time, and they are giving good service to that area. MR. EVANS: Going on then to jet service, which is referred to as first-class service to the city of Brandon , is the Minister and his department making any efforts with regard to getting jet service east-west to the city of Brandon? MR.

JOHNSTON: We, in the department , the department is presently reading to start a research and survey of the amount of traffic going west from Brandon and going east from Brandon. Now, ,. PWA and both Air Canada have shown interests in that survey; and at the present time PWA can fly west but they can 't fly east, if I'm not mistaken . Air Canada is in the other position of being able to move east, and as you know , Transair cannot move east from Winnipeg . We did try to have , I believe Great Lakes Airways come in and supply a service from Brandon East but that was not allowed .

Nordair , which is owned by the federal government, fly into Winnipeg and back 3503

Tuesday, May 1, 1979 The jet service to Brandon is something that we, in Manitoba , believe in. We have talked to the Air Canada people in my office, we have had meetings with the PWA people, I unfortunately was wasn't able to attend but Dr. Rea and the Deputy met with them . We have had some discussions with them when we were at the Westac meeting in Saskatoon .

We havE! informed the airlines that our particular drive in economic development in Manitoba, which is to try and build up the rural areas in Manitoba and Brandon which is growing greatly, should have, as far as we're concerned as part of that development , good air service. And we intend to keep pressing for that, and as I said, Dr. Ray and his staff will be starting that survey and research in the very near future . MR. EVAN!;: Thank you , Mr. Chairman . At one time , of course , the city of Brandon was served by Trans-Continental Service .

Air Canada , Trans-Canada Air Lines used to come in there with a Viscount at one time and then Transair did later. But eventuall y Air Canada got out of it, got the CTC to agree to give the service to Transair and then Transair eventually got out of it and gave it to a subsidiary , Midwest, and there's been a general downgrading . Eventually Midwest got out , the only way we got Perimeter back in is with the subsidy program .

And indeed, there are the realities of transportation, air transport economics of whether there's simply enough traffic to warrant putting down a jet aircraft into the city of Brandon and out again . I say that because I recall my conversation with Mr. Reese Eaton , the President of Pacific Western Airlines at the time that the PWA and Transair were about to amalgamate , it was around that time in 1972, early 1976, early 1977, thereabouts, and Mr.

Eaton told me quite candidly at that time that he couldn't see any way of justifying setting down a jet aircraft in a city the size of Brandon and make any money , that they 'd be losing their shirts in other words , if they did this . It was just completely impractical. I think they would consider it with a subsidy , but as a normal operation the PWA stated at that time . I've also had conversations in the past with the former President of Air Canada , many years back, the same matter , and sort of the same answer comes forth . They don't see the economics of running a so-called first class jet air service .

I want a first - class jet air service , we would all like to see a first-class jet air service, but I don't know whether the population configuration , the population size, the market size warrants it, and also given the fact that there is good highway communications and other forms of transportation , highway transport and other forms of transport that are available as alternative forms to people who wish to travel.

So coul d the Minister indicate, while these studies are going on , some conversations have gone bn, is he at all optimistic of getting a first class air service into Brandon in the next year or two? MR. JOHNS,TON: The indications that we had from the Air Canada people while they were in our office were that certainly they weren 't really opposed to coming back into a jet service in Brandon, and the PWA people were the same way .

The member , when he states that it's not economical, and it hasn 't been economical for them , but we have been trying to make the case that western Manitoba , as far as we are concerned , is an area that as far as the economic development is concerned, is something that we are pressing for . And we think that jet service will certainly help that particular drive that we are going on. Now, thE! surveys that Dr. Ray and his staff will be doing , - and I would like to ask him , I know he's just planning to start it - how long it will take .

Approximately two months is the answer I receive , and at that time they've shown interest in those surveys and they certainly haven 't said definitely no to us on the proposals that we've put forward to them that the western part of Manitoba should have a jet service. MR. EVANS: Mr. Chairman, we'll look forward with eager anticipation to some good news in a few months from now .

Although I must say, not to be a pessimist but to be a realist , I doubt very much whether this would come to pass, whether jet service would come to pass , as much as I would like to see first-class air service come to Brandon , as I said a minute ago , I don 't knww whether the market is big enough to sustain that type of service , given the very high energy costs of just taking the plane down and bringing it up again . That's the reality of it and I think none of us are magicians .

On the other hand , if the federal government were prepared , because of some economic development policy , to say okay, we're prepared to have Air Canada go in there , or we're prepared to subsidize PWA as a matter of a developmental thrust , because goodness knows there 's been a lot of transportation subsidy in this country of ours for developmental reasons, where the railways have been subsidized to the hilt, where the airlines have been subsidized in cases, and other forms of transportation have been subsidized for the economic development of Canada , not for narrow 3504

Tuesday, May 1, 1979 market considerations but for long term developmental objectives . I've always argued that when I was involved in this in government, I've always argued that transportation should be used as a tool of economic development and I used that argument very much with regard to Churchil l, for example, and with regard to other remote areas in our province, and I think you could use that with rega rd to air service as well. But it's rather difficult to persuade someone like Otto Lang, who is very enamore d with service to central Can ada and so on. The irony of it all is, Mr.

Chairma n, as far as Air Canada is concerned, I understand for some years , and I think it's still true, that the weste rn traffic subsidizes the traffic in central Canada , that if it wasn't for the profits made in the western traffic areas of Air Canada, they would be in a much worse position than they are. To a large extent , it's the long trips that occur in western Canada that make money for Air Canada to sustain some of the losses that they sustain flying DC8s, huge aircraft between Ottawa and Montreal, if you please, and Ottawa and Toronto.

So, at any rate, unless there's a change in philosophy or a policy thrust on the part of the federal government, I can't see jet service occurring. But nevertheless , I do look forward to positive results .from this study and any negotiations that could or might take place, so that we indeed could have a decent first-class jet service to the city of Brandon. MR. CHAIRMAN: The Member for Transcona . MR. PARASIUK: I have just a couple of comments to make on this item .

In listening to it it's really as large an item as the entire department itself in terms of its impact, because we've talked about rail line, rail service, rail rates, rail line abandonment, air service, and I was looking at the reconciliation sheet and I really don't see any transfers of funds to the Department of Highways and Transportation.

The Task Force had recommended the creation of a Department of Transportation to rationalize government activity, and the name of the department was changed from Highways to Highways and Transportation, and I thought that maybe some rationalization had in fact taken place, but it would appear , at least in this year's general Estimates , that rationalization hasn't taken place and that the analytic functions relating to alternative modes of transportation , those alternative to highways espec ially, are being retained within th is department.

That may be fine, but to ask a specific in this respect, has this branch, - I guess I'd call it a branch - has this baanch done any calculations on what the impact will be on highway costs from rail line abandonment? What will the impact be to the province? Because these are costs that right now are being borne by the fed eral government through their subsidy program, and to the extent that we get rail line abandonment.

That means that that is a cost that's being shifted onto the Man itoba taxpayer generally , through its highways programs and it would strike me that that would be a very important function for this particular branch to do. It should be determining what the costs to Manitoba will be of the federal government getting out of providing rail line service , ultimately , because they are the ones ultimately respons ible for providing rail line service . I would like to ask the Minister what work has been done in this respect. MR.

JOHNSTON: Well, it's logical for the member to assume that the department would be the one as far as transportation is concerned in this area from the discussions we've had tonight , the research that Dr. Ray does . Dr. Ray does transportation, the department does transportation research for all departments of government.

Now, when the honourable member speaks of the costs of upgrading highways because of railroad line abandonments, the Department of Highways with their staff, has designated one person - one and a half - if we talk in SMYs and have developed a complete map of the railroad line abandonment and also a complete map of the roads that would have to be upgraded in the province, should this take place , and are presently working on estimated costs .

I'd like to say to the member that the PRAC Report was just released towards the end of January and that particular study that's being worked on by the Department of Highways, who reall y are the logical people to give us the figures of that cost so that we will have the figures available to us when we make presentations in sup port of retention committees. But the Department of Highways is working on those costs at the present time. MR.

PARASIUK: I understand then that the Department of Highways is doing calculations on the costs of upgrad ing highways , and I assume that they will be putting in and working into their calcu lations, annual maintenance costs as well. MR. JOHNSTON: Yes, that's certainly part of it. I might add that the federal government on one hand talks about rail line abandonment and cuts off $6 million for road strengthening , and the Min ister of Highways has made his position on that very clear to them . 3505

Tuesday, May 1, 1979 MR. PARASIUK: lthinkthatthefederalgovernmentreally is trying to transfer a cost on to the province, and the point is how great is the cost to the federal government of maintaining the rail lines, and how great is the cost to the province of having to absorb this cost with respect to highways?

I think that's a very critical and clear economic question that can be asked, and I think that some economic analysis can be done on it so that we can get some numbess in terms of making the argument , and I think that that's the type of agrument that probabl y can best be made by the departmen t and by the government , as opposed to arguments that in a sense can best be made by the Retention Committees . So if the Minister is saying that work is being done in that area , fine , I will try to keep myself app rised of what comes out of that and what figures are put out on that.

I do thi nk that the federal government is engaged in an exercise of trying to transfer both capital and ongoing costs on to a province, and to the extent that that's undertaken we will find our flexibility - our budget flexibility - constrained in the future , and that's why something like rail line abandonmEmt, is such a critical thing from a provincial point of view, not only in terms of the social costs involved with respec t to the deleterious effect that this has on communities.

But I think from the perspective of the Provincial Treasury, it also will have a deleterious impact, and I think both of these hav to be measured and I look forward to getting this information from the department when it makes its presentations to the appropriate federal authorities in this particular matter. That's all I have to say with respect to transportation . MR.

JOHNSTON: Well, certainly Ministers don 't want to prolong their Estimates, but I just go back to saying that the PRAC report that said $24 million for the whole of western Canada is obviously outrageous without even estimating , and we're estimating it at the present time. MR. CHAIRMAN: 2.(b)(1)-pass; 2.(b)(2)-pass ; 2.(c)(1)-pass - the Member for Transcona. 2~c)(1~ ~ MR.

PARASIUK: We're on Technology, and you have a fairly substantial decrease in this sub-appropriation on Other Expenditures and Grant Assistance , and rather than just dealing with the sub-item (c)( 1 ), (2) and (3), I think the general introducto ry question that I would like to ask the Minister is what accounts for this pretty substantial decrease? MR. JOHNSTON: Mr. Chairman , the substantial decrease in the Technology Department , is because the technology centres in Brandon and Winnipeg are the SMYs basically , and the operation has been transferred to the Enterprise Manitoba Program in this particular case .

We can 't transfer it all, because the federal government under the program is very fussy about how many people they take over as employees of the provincial government. But under the program it's a 60-40 split and we were able to move a lot of the work that is done by the Technology Department into Research and into the technology of Enterprise Manitoba . MR. PARASIUK: Mr. Chairman, I can assume then that there has not been an overall reduction of expenditure and service provided for technologica l service, but that rather the appropriation has been split? It is not possible to tell from (

k) that that's the case , you see, it's a lump sum . MR. JOHNSTON: Yes, if you take the $200,000 on Grant Assistance in 2.(c)(3), and you turn to Page 26 and you take a look at the Grant Assistance Manitoba Research Council , you find that there's a $:~ , 200,000 appropriation in that particular area. MR. CHAIRMAN: The Member for Burrows . MR. HANUSCHAK: Yes, is this a service offered to the private sector on a cost recovery basis, or is this another welfare program? MR.

JOHNSTON: Well, it's a partially cost recovery, and as I've told the member before , I do not regard giving technical assistance to small business in Manitoba as a welfare problem . MR. HANUSCHAK: Mr. Chairman , a Program of Assistance is a Welfare Program , and he could check any dictionary he wants. MR. CHAIRMAN: The Member for Transcona. 3506

Tuesday, May 1, 1979 MR. PARASIUK: Yes, I want to know if it would be possible for (k), just as a sub-notice for 2.(k), I think it might be possible to go through a number of the following items to lead to (k), but is it possible to get a better breakdown for (k)? Because what we have here are just lump sum amounts and it is very difficult to make that reconciliation because a lot of questions that one could ask about (c), (d), (

e) and a number of the programs that follow indeed , really many of them we could ask a general question on that and then defer some detailed questioning on it until we come to (k), which the Minister has indicated in past comments to past questions, in other parts . But when we come to (

k) we have one fairly large sum, which gives us a bit of difficulty in the Estimates : review. I'm not saying that this is anything unusual to this administration or to this particular department. That happens from time to time, but when you have sub-items that have some degree of specificity to them, and then when you get to the final item which in a sense pulls all these together and it comes in as a lump sum , it is somewhat difficult to deal with . MR. JOHNSTON: I'm informed that we can give you a breakdown of (k), not now but we can supply it to you tomorrow, as soon as we start in the Estimates. MR.

PARASIUK: Mr. Chairperson, I'd appreciate that. I think - tomorrow is Wednesday - we might go into Bills for an hour or so tomorrow, so if the Minister could possibly provid e me, as a critic on this, with a sheet of that say around Question Period or some time like that, then it would give me a chance to quickly go through it, and then I think it would be possible for us to go through a fair amount of the items today leading up to (k), and we might stop at (

k) and get into it tomorrow, and probably proceed fairly expeditiously with the Estimates in that way. Given that, just on 2.(c), if we could just get a capsule comment from the Minister as to what this does, just a quick capsule comment from the Minister on Technology, and with some examples, just a couple of examples as to what's provided? <' MR. JOHNSTON: The type of work that is done by the Technology and Supply Branch is analysis made to total operations of 80 companies and 40 selected for intensive technology assistance.

The technology assistance provided 114 individuals and companies plus 28 computer literature searches were made, and they interpret it on behalf of the clients . General assistance was provided to 117 inventors on terms of technology and economic merit of their inventions. In 28 cases, searches of the patent literature were made; 98 requests for sources of raw material were satisfactorily answered . For the above functions , direct cost savings to the clients were approximately $30,000 projected to economic benefit $200,000.00.

Staff supervised progress on the following major Manitoba Research Council Projects: Hydro D.C. current transducer for monitoring and control of high voltage D.C. transmissions; completed technical evaluation for silver panels on Legislative Building ; continued joint project with Atomic Energy of Canada and Trans-Canada Pipelines on using of peak electricity and generating hydrogen fuel. Raising costs of electricity makes projects less attractive.

A pilot study on system of possibly Saline water problem south-west of Winnipeg was completed, data being interpreted by the Department of Mines and Resources and Environmental Management. Support provided to three regional Science Fairs was $2,724 as a method of promoting understanding of technology. Three projects for new product development were cost-shared with the small private compan ies: provincial costs $14,466, projects sales $1 million , with 7 new jobs, it's a research and development type of work . MR.

PARASIUK: .. . given the size of Manitoba firms, I would think that a lot of significant reseacch and development will be done in the province; will in fact be done through a public body like the Manitoba Research Council. I can comment on that further , but we're positively in support of this type of endeavour. MR. CHAIRMAN: 2.(c)(1)-pass; 2.(c)(2)-pass; 2.(c)(3)-pass ; 2.(d)(1)-pass; - the Member for Transcona . MR. PARASIUK: Again, I assume that the explanation for Industrial Design is basically the same as the explanation for Technology. I see a reduction here from $255 ,000 to $146 ,000.00.

Is that the same situation? Was that found in (k)? MR. JOHNSTON: Well , the decrease staff reduction of contract employees and the Product Research Development Officer will be retained by the province to provide service under the Industrial Development Sub-Agreement. Other Expend itures , the Product Research and Development is a two year federal-provincial cost-shared arrangement approved by the previous administration by 3507

Tuesday, May 1, 1979 and MC227711-11A. The program will be terminated in the spring of 1979, and the remaining funds of the $45,000 arerrequired to meet provincial obligations under that agreement. So those are the reasons for the reduction in that perticular department. MR. PARA.SIUK: Could the minister indicate why the program will be terminated? I gathered this ~ is providing industrial design service; I understood that there was something last year, the Premier's Award for Industrial Design, I think that there was work being done in this area and I thought that the companies involved found this very useful.

Now, is there any particular reason why this program would be terminated? ~ MR. JOHNSTON: The work will be continued; the 1979-80 Program is going to be as large as it was before, and the Premier's Award in Design Excellence presentations are going to be carried on, and these will be more or less funded by a 100 percent or Funds Recoverable from the federal government ; there is also some of the design work that went into the Enterprise Manitoba has also been transferred into Enterprise Manitoba which we have some recovery from the federal government. MR.

PARASIUK: I'm getting a bit confused on this particular Item. I see a reduction from $255,000 to $146,000 ; the minister has indicated that some of this is in the Enterprise Manitoba Program, and what I'm trying to get a handle on here is the extent to which any of these Items (c), (d), (e), (f), you name it, are in fact being reduced or cut out.

If that's so fine, but it's very difficult when you see a whole set of reductions and then you see a fairly substantial increase in the Enterprise Manitoba Program; if this is a Program that is on-going and continuing, fine, if it has validity, if the department has made some assessment and it finds it's a useful program, we can debate that; if it's bein!~ phased out or cut back, again that's something that I'd like to know is happening.

What I'm not able to discern from the minister's answers is whether indeed this program is being cut back, because the figures themselves would indicate that the program is being cut back

whereas ~ with respect to the past Item that we passed - (

c) Technology, the minister was able to quite clearly tell us that the program wasn't being reduced. MR. JOHNSTON: Well, as I explained the reasons for the reduction in Staff are the Product Research and Design will be funded partly under (

k) and partly under 100 percent Federal Enterprise Development Programs and there will be more programs for less provincial dollars. I can outline the programs that are being planned for the 1979-80 Program : Promotions, Speaker Rosters, Media Publicity, Special Incentives, Industrial Industry Sectors ,

Part icipation in Industry Sector Advisory Board on Application of Design, Tourism, and Hospitality Sector, Assistance to the Department of Tourism on design products with Canada-Manitoba Tourist Development Agreement, Education, Design Management Centres , Seminars add Courses on Design Management, Implementation of Design and Development - we have under that, Counselling, Field Work and Assistants, Personnel Calls by Manitoba Design Institute Staff, Selected Industrial and Commercial Establishments, Consulting, Industry Product Evaluation , Evaluation of Design Quality, Developme nt of Comprehensive Manufactured and Processed Products for Five Priority Sectors , Designer A Day, Make Available a Product, Packaging or Graphics Design for One Day to a Manufacturer who will Demonstrate Potential Design Benefits , Program Support , Product Development Program, Financial Assistance to Manufacturers for a Specific Design Project under Cost Shared Arrangements .

Enterprise Development Program : Assists to Obtain the Federal Funding for Product Development, Demonstration of Design Achievements , Recognition , the Premier 's Award of Excellence, Performance, Display of Design Achievements, Exhibition of Design Projects Nominated for Design Awards in Seven Categories , Case Studies, Documentation of Manitoba Design Products, Projects in Printed or Filmed Format or Promotion in Educational Purposes .

We have a liaison inter-government , inter-department and intra-department coordination Design Programs and in-put with federal government and National Design Coun cil and other government departments, and within the Department of Economic Development. The departmen t is set up to work with businesses to help them, educate them and help them , and give seminars on the basis of the importance of product design within the industries . MR. PARASIUK: 1 assume then that the Manitoba Design Institute is funded out of this appropriation , is that correct? Because it's not indicated in the Estimates here. MR.

JOHNSTON: Yes, that is correct. 3508

Tuesday, May 1, 1979 MR. PARASIUK: And the $146,700 - does that all go to the Manitoba Design Institute and is it then dispersed from there, or what is the funding of the Mani toba Design Institute this year as compared to last year? MR. JOHNSTON: Well, I'm not saying that it goes to the Design Institute; those funds are, well, the Design Institute oversees those funds . MR. PARASIUK: I would like to ask one specific question - how much money is spent on running the Manitoba Design Institute? MR. JOHNSTON : Well, the operation of the Design Institute is the honorarium of the Board which is $3,200 .00. MR.

PARASIUK: There's no full time staff person involved with the Manitoba Design there an Executive Director of the Manitoba Design Institute? .? Isn't MR. JOHNSTON: The department staff of the Design Institute which is an Executive Director, also an Executive Directo of the Manitoba Design Institute, one Industrial Design Officer, and one Admi nist rative Secretary; they are the support staff for the Members of the Board of the Design Institute. MR. CHAIRMAN: 2.(d)(2)-pass; 2.(d)(3)-pass; 2.(e)(1)-pass; The Member for Burrows. MR. HANUSCHAK: Mr.

Chairman, this is the Item that deals with Human Resource Management, and the Branch is intended to provide service and support to improve the capability of enterprise to manage and develop its human resources; by that , I would take it that it means the human resources of the Province of Manitoba. Now , last night the minister told us, or he would want us to believe that through his efforts , through the efforts of his department that he had created some 1,000 and some odd jobs which formerly were non-existent and thanks to the government, this government's program, those jobs came on track. Well, Mr.

Chairman, we did some research on that and we find that the 1,000 and some odd jobs really isn't 1,000, but it's much, much less than that; it's probably something much less than 100 jobs, because many of them would have come on track anyway, in spite of the minister's efforts.

Anyway, the matter of Human Resource Management is still before us and I would suggest to this minister, as I had to a colleague of his, the minister responsible for another Welfare Program, for Social Development and this minister is responsible for economic welfare, that he and his colleague and Cabinet give some consideration to amalgamating or at least bringing about some closer liaison amongst all the Welfare Programs, all the Welfare Programs designed to develop our economic resources , designed or intended to develop our human resources .

And if the minister thinks that I am speaking facetiously, well , I'm not.

When we were government, we did have a Co-ordinating Committee of Cabinet, Manpower and Employment Sub-Committee of Cabinet and that Sub-Committee of Cabinet did have representation from Industry and Commerce, from Continuing Education, from Health and Social Development, and from all the departments which did have an interest in, and could provide some input towards the maximization of the human resource potential which we have; and I would suggest to the minister that the need fo that type of liaison, for that type of co-ordination inter-departmentally still exists, because here we have a minister who's charged with the responsibility of Economic Development and let us assume that he is going about his job very, . very diligently and he is developing economically, developing the Province of Manitoba, and in the process of economically developing the province, he does create jobs .

Let's for one moment assume that he is doing that.

In the meantime, there's ano ther department in government who is responsible for people who, for whatever reason, find themselves without employment, find themselves in need of retraining, upgrading, find themselves in need of being matched with a job because they may be in one location and the job is in another location; then there's the third department whose responsibility it is to provide a Manpower Training Program, and so here in this government - and there hasn't been anything to indicate that there is any sort of co-ordination amongst those three, we have three ministers , each in his own corner doing his own little thing and perhaps not really being aware , as the saying goes, of the right hand knowing what the left hand is doing and that type of thing .

So therefore I wou ld suggest that the minister do give some consideration , and I realize that he can't do that on his own initiative, that he would have to put this proposal to the First Minister, 3509

Tuesday, May 1, 1979 to the Executive Council , or whatever fashion this government makes its decisions, I don't know, I don't sit in Cabinet , not in this Cabinet, but that some co-ordinated effort be provided to bring together the econom ic resources , the economic resource potential that we have in the province and the human resource potential. I think , Mr.

Chairman , the more I think about bringing the two under one umbrella, as it were , putting them in one deparmment , the more the idea appeals to me because if you were to bring all the Welfare programs , the Economic and the Human Welfare Programs , put them into one basket, it would perhaps remove some of the stigma that's presently attached to our Welfare Program; because then you would have , you would have Mr. Weston and Mr.

Taylor and Lord Thomson sitting in the same waiting room, waiting to see the same minister as the Welfare applicants from my riding , and both would be applying for Welfare ; one would be applying for Welfare to develop ' seeking public assistance to put his economic resources to greater use for a greater benefit of the people of Manitoba ; the person from my riding will be there seeking assistance from the minister to put his human resources to greater use to make his own human resources more productive for his bwn benefit and for the benefit of the province. So I don 't think it will be all that bad , Mr.

Chairman , if Mr. West and Mr. Thompson and the people from my riding were to wait to see the same Minister with a similar application form in hand applying for welfare . And let the same Minister deal with both of them . And as I have said it would remove the stigma that 's attached to ... You know, people from my riding , they are embarrassE!d ; they are ashamed to apply for welfare . This way they would march into the Minister 's office with pride . And when the Minister will grant them welfare, they , together with the Westons and the E.P.

Taylors, and the Lord Thomsons, will put up their sign , maybe a smaller sign , a little modest sign on their lawn , but they , too, would put up a sign that they are recipients of welfare, the same way as Mr. Weston does . And if you travel through Inkster Industrial Park or through any other industrial community of any city , you find signs . The welfare recipients are proud of the fact that they are in receipt of welfare , that the taxpayer is assisting them by way of a grant in developing their economic resources .

Well , my people want to be similarly proud and they , too , would like the Ministe r to be present to present them the cheque and to have a photographer there and, you know , throw a little cocktail party in recognition of the event that they were given public assistance to upgrade their own human productivity . And there is really nothing wrong with that. And let's do it on the basis of what the individual . . .

Let the individual put forth a proposal to the Minister of what he or she thinks that he feels that he or she is capable of producing , the extent to which he feels tha t he or she is capable of enhancing his own productivity and thus, in turn , enhancing the productivity of the province , without a means test . Mr. Weston doesn 't have to submit himself to a poverty test. He doesn 't have to plead poverty .

He simply comes to the Minister , to this Minister or to a federal Minister , or to this Minister in applying for federal funds that this Minister may be responsible for the distribution in this province , and he doesn 't plead poverty ; he simply comes forth with a proposal and says I feel that I can expand my operation to this extent and this would create X-number of jobs, and this would produce X-hundreds of thousands of manufactured products , whatever it may be, and thEm the spinoff benefits of that, and that would enhance the economy of the Province of Manitoba by X-hundreds of thousands or X-millions of dollars and therefore I feel that I am entitled to this welfare assistance .

Well, my people can also , and constituents of other members can also present a similar case , on their own behalf and in the ir own support, demonstrating how they could enhance their own productivity and thus make a greater contribution toward the econom y of the province .

So, as I have said initially , I am not suggesting this is any way facetiously , because ther e was a co-ordinated effort in the previous government; there is a co-ordinated effort in many other governments relating the supply of manpower, relating the economic resources that the province has that could provide employment, tying in the economic resources that could be developed to create jobs , to create employment. So there has to be some co-ordination amongst those various areas of operation , various areas of responsibility of government , which in this government does not appear to exist.

Because , for all the time that we've spent dealing with the Minister's Estimates up to this point in time , I have yet to hear what is the connecting link , what is the pipeline and the liaison between this Minister and his colleagues, the Min ister of Labour , the Minister of Education , the Minister with his present title of Health and Communit y Services , all of whom are involved in the whole business of making our human resources as productive as possible to their maximum degree . And here is a Minister , as I have said , who is involved in the Economic Development of the province .

Here is the Minister who, a few months ago , was busy taking a survey of the number of people who wanted to work in Altona or Wink ler, or whatever it was that he was interested in attracting -- Morden - an agricultural implement parts manufacturing firm to, and, if there would 3510

Tuesday, May 1, 1979 be some co-ordination, he would be able to say, all right, here I have an investor interested in building such and such a plant; here I have a supply of manpower ; here I have a suppl y of manpower that is readily available to go to work; here is a supply of manpower that, if I talked to the Minister of Educat ion, I could upgrade , I could train and have that supply of manpower available for this prospective employer.

And it would lead to some co-ordinated effort, rather than proceeding just by chance, flying by the seat of one 's pants bec ause, as I have indicated, our research does not show that the Minister had created 1,000 jobs or 1 ,000-plus jobs , or whatever the figure was, but I would say about 47.5, according to our calc ulation. And this is using an old reliable formula. It works out to about 47.5 jobs that the Minister can really take credit for, but not the 1,000-plus.

But, if there were some co-ordinated effort, then he would be able to get a better handle on both issues : The potential for economic development , the needs and the supply of manpower that he has to work with, and train it to fit the economic needs that he is developing within the other area of his operations . MR. CHAIRMAN: (2) - the Honourable Minister. MR. JOHNSTON: I will outline for the member the purpose of the Human Resource Branch, which was started under the previous government , which has been very successful.

To improve the capability of enterprise to manage and develop its human resources , as well as to assist in the general improvement of all management skills, the Branch is responsible for the provision of professional consulting service, the development of comprehensive human resource development and training packages in selected companies, the delivery of small business owner-operator courses throughout Manitoba, the provision of assistance to industry in the recruiting and training of special needs persons, as well as co-ordinating departmental activities related to special needs in industrial development projects .

The consulting, in 1978-79, but the consulting that's continuing is 121 new companies contracts made regarding human resource management matters ; 275 repeat contracts made regarding human resource management matters, for a total of 396 contracts. Human Resource Development: 46 firms agreed to undertake comprehensive human resource management projects. These firms committed themselves to examine their human resource management practice , plan and put into place practices and procedures to properly manage their people resource .

Training : 225 small business owner -operators are trained under the Department of Sma ll Business Management Training Program . 80 special needs persons were placed in employmen t as a result of departmental efforts in working with companies to employ special needs pers ons. There is a co-ordination provided through the Canada-Manpower Needs Committee , involving federal Department of Employment and Immigration, plus the Manitoba Departments of Economic Development, Labour and Manpower , Education and Community Colleges . Institutional : For industr ial training and general manpower needs. I might also say, Mr.

Chairman , that the Minister of Labour also sits on the Board , the Committee of Economic Development Ministers, and this type of work is discussed among the Ministers certainly when the subject is on the agenda , which it has been . So the department is very busy working to the benefit of the people of Manitoba, working with industries so they will have a knowledge of how to manage their human resources and how to work with them. And it has been a very great benefit for our small companies to have this service . MR. CHAIRMAN: (2) - the Member for Burrows. MR. HANUSCHAK: Yes, Mr. Chairman .

Would the Minister agree that it would make the whole process so much simpler if both the Westons and the Taylors and the Thomsons and the welfare appl icants who go to the Minister of Health and Community Services , if they were all in the same office ? You know, and there the Minister could match the two . Along comes Mr . Weston . He wants welfare. So the Min ister gives him welfare and then he says, having given you welfare, you will need manpower .

Here is a man applying for welfare to upgrade himse lf, and here we could train him and I could put him to work , rat her tha n go th is cumbersome circuitous route that the Minister has outlined . It would make it so much simpler if all welfare programs, human and economic resource development welfare programs were in the same department. MR. CHAIRMAN: 2. (eX1)-pass ; 2.(e)(2)-pas s; 2.(fX1)- pass - the Member for Brandon East. MR. EVANS: On the Promotion and Information Services I see under Salaries some reduction and 3511

Tuesday, May 1, 1979 obviously this particular

section or branch has been downgraded . Two questions: How many people are now employed in this particular branch? And the other question is, whether any advertising money is included in here, well that may be under the Other Expenditures , so if you want to talk about that at that time, fine , but my question was related to advertising expenditures and whether that 's under this

section (

f) or whether that information is also included in the other sections of the department? MR. JOHNSTON: Mr. Chairman, your decrease of $51,000 in the Salaries is due to the provision of funds for general salar y increase shortfall of $5,000.00. Salary adjustments when a position is vacant , it reverts to its minimum step. Three positions were vacated and subsequently abolished . The abolition of three vacant positions was : One directo r, one clerk-typist and one contract writer, bringing it to a total of $51,100 .00.

The present staff includes the provision of three staff: One co-ordinator , one illustrator and one graphic artist . MR. EVANS: Can the minister adv ise whether any promotional or informational service work is being done for the department or is being planned by the department on a contract basis and paid out of other items in the departmental Estimates? MR. JOHNSTON: The total advertising budget, Mr. Chairman, is on advertising and is in industrial design. I'm sorry , Mr.

Chairman, the total Advertising Budget for this department is $216,800 and that the Advertising and Industrial Design you 'll find $4,700; Business Development , $70,000; Small Enterprise Development , $1 ,500 ; Market Development , $1,500 and Enterprise Manitoba, $138,600.00 . MR. EVANS: Yes, so that the item Promotion and Information Services relates directly to the payment of three staff years plus and then when we get to Other Expenditures, expenses involved with those personnel. But as far as the total advertising expenditure of the department, it amounts to $216,800 and that's scattered throughout.

Could the minister indicate the name of the advertising agency or is there an advertising agency assigned to the department? MR. JOHNSTON: The McKim Advertising is assigned to the department at the present time . MR.

EVANS: Is it expected that some of the promotional act iviti es of the department will be done on a contract basis through the advertising agency or through a P.R. agency , because it seems to me those three persons that you have are , well besides the co-ordinator, the other two are technical low grade, low classification technical people - I'm sure they 're good people - but they're low grade people so that where would be the innovation for whatever promotional material that . the department may wish to have?

I see a lot of it will be spent on the small enterprise, $135,000 I think it is, some large sum , and $70,000 on business development - those are the two biggest single items and you have McKim Advertising , but will that be the sole source of the innovative material or will you also be contracting in addition to that, to have promotional work done? MR. JOHNSTON: No. The promotional program will be developed by McKim Advertising, which has been designated as the agent of the department for the purpose of the agreement.

The agency may also provide services to the department as the need arises, and the man in charge of the Promotional and Information Services is the co-ordinator , who works with the advertising people and with the department. MR. EVANS: The $135 ,000 , if I have the figure correct approximately - $138,600, is that item to be foun d under (i)(2)? Is that included in the $162 ,1 00.00? MR. JOHNSTON: Well, the $138,000 relates to Enterpr ise Manitoba, under (k). MR. CHAIRMAN: The Member for Transcona. Pardon me, the Member for Brandon East. MR. EVANS: Yes, just one follow-up question on this particular item .

What would be the nature of the Promotion or Informational material under this $138,600 item - now we can defer that discussion until we get to (

k) but that was my only other question, what would we spend the money on, what would we be doing for that? One of the things, you'd be making the potential users of the program available , give them information so that they would have it available to make up their mind wheth(3r or not to apply, and I guess general advertising of the program. 3512 •

Tuesday, May 1, 1979 MR. JOHNSTON: To outline it for the honourable member , I can give him the following list of materials required : News Releases , all components ; Speeches and Speaking Tours; Writing ; Editing and Organ izing Brochures; Advertising ; Media and Collateral, I think that word is; Mass Media , Manitoba only; Trade Development ; Industrial Development; National and International Sport Advertising; Yearbooks; Ethnic Publications; Special Programs , etc .; Special Event Advertising; Semina rs; Tours and Conferences ; Direct Mail Advertising, and

Document details

Collection	Manitoba — Debates (Hansard)
Citation	31-3-51b
Type	hansard
Volume / chapter	31st 3rd hansardpdf 51b.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	614dcff5c496cb5e295cd5864a26d7d2b11566e0

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