Manitoba Hansard — 12 March 1974 (Sitting 49, 30th Legislature, 1st Session)

30-1-49

Manitoba — Debates (Hansard)

THE LEGISLATIVE ASSEMBLY OF MANITOBA 2: 30 o' clock, Tuesday, March 12, 1974 Opening Prayer by Mr. Speaker. INTRODUCTION OF GUESTS 1291 MR. SPEAKER: Before we proceed I should like to direct the attention of the honourable members to the gallery where we have 30 students of Grade 6 standing, of the Robert Browning School. These students are under the direction of Mr. Wermann. This school is located in the constituency of the Honourable Member for Assiniboia. We also have 17 students of Grade 7 standing of the Westgate · Collegiate. These students are under the direction of Mrs. Funk.

This school is located in the constituency of the Hon ourable Member for Wolseley, Leader of the Liberal Party. And we have 25 students, Grade 11 standing, of the St. James Collegiate. These students are under the direction of Mr. Wilcosh. This school is located in the constituency of the Honourable Member for St. James. On behalf of all the honourable members, I welcome you here today. Presenting Petitions; Reading and Receiving Petitions; Presenting Reports by Standing and Special Committees; Ministerial Statements and Tabling of Reports. The Honourable Minister of Labour. MINISTERIAL STATEMENTS HON.

RUSSELL PAULLEY (Minister of Labour) (Transcona) : Mr. Speaker, as is. the custom in this House when we receive the reports from the Dominion Bureau of Statistics on the unemployment situation, it is customary for I, as Minister of Labour, to make a statement. I am pleased, Mr. Speaker, to indicate to the House that Manitoba's unemployment rate is the second lowest in Canada, and stands at 3. 9 percent, second only to Alberta whose unem ployment rate is 3. 5 percent.

When one considers that it's generally accepted that three per cent is tantamount to full employment, I think that we can be proud iri Manitoba that we stand in the position that we do at the present time. Our seasonally adjusted rate for February was 3. 1 percent lower than 3. 6 percent January 1970, and lower than 4. 2 percent in February a year ago. Manitoba's labour force in February of 1974 was 2, 000 lower than the previous month but was 13, 000 higher than it was a year ago. The total employment figure, Mr.

Speaker, indicates an increase of 2, 000 over the previous month and a whopping 19, 000 more people employed in Manitoba than a year ago. I would indicate to my honourable friends, Mr. Speaker, that while we are not compla cent and realize that there are still areas for advancement, I think that I can justify that the economy of the Province of Manitoba is still advancing and that we, while not being compla cent, are at least one of those areas in the Dominion of Canada that is showing progress. When one considers, Mr.

Speaker, our actual rate of unemployed of 3. 9 percent and that the average across Canada is 6. 8 percent, we have reason to be satisfied to a degree with the forward thrust of the economy of the Province of Manitoba and I suggest this is due to the policies of this government. MR. SPEAKER: The Honourable Member for Lakeside. MR. HARRY J. ENNS (Lakeside): Thank you, Mr. Speaker. I respond briefly to the welcome news by the Minister of Labour with regard to the labour situation in Manitoba and particularly the unemployment situation in Manitoba. Mr.

Speaker, the situation that we have in Manitoba is one that has fortunately been with us for the last little while and one that has of course traditionally been with this province regardless of who is government or not. There are, of course, some other questions that could be asked and might have been included in the Honourable Minister's statements.

That is at least some indication as to just what is the government's role in the maintenance of these relatively low unemployment figures by some cataloguing of the numbers of persons employed in the various programs, direct government aid programs, PEP programs, STEP programs and so forth. There could also have been some consideration about possible out-migration figures included in this kind of a statement - which normally is legitimate information, you know - provided.

1292 March 12, 1974 MINISTERIAL STATEMENTS (MR. ENNS cont'

d) I would also indicate, Mr. Speaker, that it leaves one to wonder a little bit, in view of this government's peculiar attitude and objection to the consideration that specific industries have in our province to help our economy with respect to problems of obtaining employees. The Minister takes great pride, and I think with some concurrence on our part, in suggesting that the figure of 3. 9 and the adjusted, I think 3. 1, comes very close to full employment. Then perhaps, Mr.

Speaker, there's all the more reason for some kind of consideration to be given to those specific areas where there has been a standing cry for employees, more em ployees to take up the waiting jobs -I won't name any specific industries but the Minister is aware of some that I am referring to - that perhaps that should become a greater concern to this government and at least not add to its complacency about the present situation. Mr. Speaker, with those few comments I do congratulate the Honourable Minister of Labour.

I envy the Honourable Minister of Labour; it is indeed an enviable position to be able to be in to rise and report these kind of figures to the people of Manitoba. MR. SPEAKER: The Honourable Member for Assiniboia. MR. STEVE PATRICK (Assiniboia): Thank you, Mr. Speaker. I also wish to comment on the Minister's statement to the House and I thank him for giving us the report.

I think it's to a great extent satisfaction to all of us here that the unemployment is as low in this province as it is, and I think that a significant factor is not that the unemployment is 3. 9 percent but I think a big factor is that there are more people employed today. I think that's the whole sig nificance of his statement. Because, as I mentioned in the Ministe:rr' s Estimates the other day, we are still not finding the jobs for all the people that are coming on the labour market every year.

There's quite a few thousands that are unable to find job opportunities in the province, so invariably they have to go to some other provinces to get this opportunity. So I think the big point here is that we have a considerable larger number of people in the labour force to day than we had last year and I think this is some satisfaction to this House. But a point that I would like to make to the House, Mr.

Speaker, I think that the most en couraging factor in the employment field is because we had 7 percent growth in the economic field in the private sector, as was indicated just last week, or this week, by the Minister of Finance, Mr. Turner in the House of Commons, and the result was due to the reduction in the corporation tax which really generated the private sector to expand and employ many people, and this has shown significant results by the growth in the private sector of some 7 percent.

This is due to some extent, and to a great extent as far as I'm concerned, because of greater expansion in the private sector, Mr. Speaker. But the point that the Minister should really concern himself with, and he has not given much answers to the House as yet, as far as the young people are concerned, because as far as the young people that will be coming on the labour market within the next few months or so, which are not in these statistics, Mr.

Speaker, and I think that the Minister will have to really concern himself to create some jobs for the people that will be coming on the labour market from our universities, colleges and high schools, and this is an area that will change the percentage, I'm sure; it will change the percentages pretty quick. So, while the Minister does take some satisfaction, I think that some credit is due and should be given to the Federal Minister of Finance who has reduced the corporation tax and which has created expansion by the private sector, Mr. Speaker. MR. SPEAKER: Any other ministerial statements or tabling of reports?

Notices of Motio� Introduction of Bills. The Honourable Member for Sturgeon Creek. INTRODUCTION OF BILLS MR. J. FRANK JOHNSTON (Sturgeon Creek) introduced Bill No. 31,

an Act to amend The Highway Traffic Act (2). ORAL QUESTIONS MR. SPEAKER: Questions. The Honourable Leader of the Opposition. MR. SIDNEY SPIVAK, Q. C. (Leader of the Opposition) (River Heights): Mr. Speaker, I have a question for the First Minister. I wonder if he can indicate to the House when in 1973 allegations regarding the fishing co-operatives in Northern Manitoba and the Department of Co-operative Development were first brought to his attention?

March 12, 197 4 ORAL QUE STIONS MR. SPEAKE R: The Honourable First Minister. 1293 HON. EDWARD SCHREYER (P remier) (Ros smere): Well, Mr . Speaker, not knowing the nature of the allegations my honourable friend is referring to, it's difficult if not impossible for me to answer. I would say that there was some indication brought to my attention in the autumn of 1973 that there was some disgr untlement with respect to the operations of the co-op, but nothing that would suggest anything near being something of a fraudulent nature.

There was disgruntlement of a general kind and cer tainly nothing was brought to my attention which would constitute any kind of prima facie evidence upon which to conduct any kind of sys tematic investi gation. MR. SPIVAK: Mr. Speaker, I put to the Minister: were charges of a criminal nature ever brought to his attention in 197 3 regarding any members of the Co-operative Department or the members of the Department of Co-operative Development? MR. SCHREYER: No Sir, Mr. Speaker, not to my knowledge. MR. SPIVA K: Mr.

Speaker, I wonder if the First Minister would indicate to the House whether prior to the summer of 1972 the former president of the Fres hwater Fish Marketing Corporation, Mr. David Corney, indicated that offices of the Department of Co-operative Development were engaged in irregular and illegal activity. MR. SCHREYER: Well, Mr. Speaker, certainly I have no recollection whatsoever of any intimation of activity of an illegal nature.

I do know that there was some disagreement being expressed back and forth between the Freshwater Fish Marketing Corporation and the Depart ment of Co-operative Services as to the point on whom lies the greater onus for the providing of financing in order to enable local fishermen to upgrade and improve their fishing operations.

There were those who contended that this was something properly and completely under the aegis of the Freshwater Fish Marketing Corporation, and there were those who suggested that this was a function which could best be brought forward or enhanced by some assis tance through the aegis of the Department of Co-operative Ser vices. That's about the nature of the disagree ment that was expressed back and forth, but nothing, as I say Sir, of anything to suggest that there was fraudulent activity on anyone's part. MR. SPIVA K: Mr. Speaker, to the First Minister another question.

I wonder if he can indicate whether he or any members of his staff commenced an investigation of the Department of Co-operative Development as a result of allegations that had been made to him. MR. SCHREYER : Well, Mr.

Speaker, there were certain meetings held, again I believe in the autumn of 1973, between representatives of the Freshwater Fish Marketing Corporation and the Department of Co-operative Services, in order to iron out certain problems specifi cally having to do with bridge financing while awaiting the Federal Government• s Department of Regional Economic Expansion grant in the case of the South Indian Lake Co-op, which I believe is in the order of $400 , 000 to $500, 000 and there was some bridge financing required in the interim, but those meetings were held not pursuant to any allegations of wrongful activity or illegal activity, but rather were held because there was need to have a better understanding of just who was responsible for what in relationship to the operations of that particular Co-op.

MR. SPIVA K: I wonder if the First Minister is in a position to indicate that the bridge financing that he is referring to, is in fact the references to fraudulent solicitation by members of the Department of Co-operative Development from the Freshwater Fisr Marketing Corpora tion. MR. SCHREYER: Well again, Mr.

Speaker, not to my knowledge, but it would strike me that if the financing involved were truly the bridge financing, that with the payment forward of the DREE grant in the order of $450, 000, that whatever amount had been provided in the way of bridge financing would have been repaid to whichever of the agencies in fact provided the bridge financing, and that is a point which I am not in any specific recollection of at the moment and I can certainly add as well, Mr.

Speaker, that at no time was there any prima facie evidence brought forward to indicate that there was some grieviously wrongful activity on the part of any officials to my knowledge and recollection. MR. SPIVA K: I wonder if the First Minister is in a position to indicate whether minutes of a meeting held September 1st between the Freshw ater Fish Marketing Corporation and the Deputy Minister of the Department of Co-operative Development were ever placed in front of him or in his hands. MR. SCHREYER: No, Mr. Speaker, certainly not to my recollection, and I have just been

1294 March 12, 1974 ORAL QUESTIONS (MR. SCHREYER cant's) ••. advised of it today, that there were in fact minutes kept of that meeting, and I understand further that the conclusions reached at that meeting were reached mutually and that there is no basis for suggesting that there was wrongful activity, and if there was, that it wasn't upgraded on thirty days' duration in any case, so as to render the entire matter academic even if it did take place in the first place, which is doubtful. MR. SPIVAK: Mr. Speaker, my question is to the Minister of Co-operative Development.

I wonder if he can indicate to the House why William Kalinowsky was demoted? MR. SPEAKER: The Honourable Minister of Agriculture. HON, SAMUEL USKlW (Minister of Agriculture) (Lac du Bonnet): Mr. Speaker, I be lieve that was a mutual arrangement between William Kalinowsky and his superior, the Deputy of the Department. MR. SPIVAK: I wonder if the Minister can confirm that William Kalinowsky appealed to the Civil Service as a result of the demotion -- as a result of this mutual understanding. MR. USKlW: Yes, Mr.

Speaker, my understanding is that he did subsequently change his mind and did appeal, and the Commission ruled in favour of the Department, because in fact it was understood that there was a mutual understanding in the first place. MR. SPIVAK: I wonder if the Minister ofLCo-operative Development can confirm that William Kalinowsky was the individual member of his department who wrote him a letter saying that there was no wrongdoing. MR. USKlW: No, as I recall it, Mr. Speaker, I have a copy of a letter sent to the Fresh water Fish Marketing Corporation but I don't recall a letter sent to me direct. MR.

SPEAKER: The Honourable Member for Assiniboia. MR. PATRICK: Mr. Speaker, I have a question for the Honourable Minister of Co-opera tive Development. Could the Minister inform the House as to the auditing procedures the Department follows with regard to fishing co-ops in Northern Manitoba, and specifically is the year end for all the co-ops the same time or does it vary from co-op to co-op? MR. USKlW: No, Mr. Speaker, I'm of the understanding that the year end differs with respect to each co-operative.

There is no standard procedure through the departmental auditing service, depending on when they are launched and so on -- the anniversary date. MR. PATRICK: A supplementary, Mr. Speaker. Which department of government have performed the audits and are the audits available for all the co-ops now, and would they be available to the House? MR. USKlW: I didn't catch that, Mr. Speaker. Would the honourable member repeat that? MR. PATRICK: Yes.

Which department of government have performed the audits and are the audits or financial statements available for all the co-ops and can we have them in the House- MR, USKlW: Well I'd have to take the latter part of his question. The Department of Co- operatives does provide an auditing service. Only where there is a request for an indepen dent audit have we used independent auditors, and we have used independent auditors with respect to two or three co-operatives wherein there were other than provincial moneys in volved, namely DREE moneys or federal moneys through Indian Affairs. MR.

PATRICK: One question, Mr. Speaker. The Co-ops that are in financial difficul ties, they have some outstanding bills. Will the government be responsible for the financial debts owing to many of the suppliers? MR. USKlW: Well, Mr. Speaker, I don't believe that the Department has any obligation other than what is a legal obligation by contract. MR. SPEAKER: The Honourable Minister of Finance. HON. SAUL CHERNIACK (Minister of Finance) (St. Johns): Mr. Speaker, thank you. I wanted to respond to questions asked by the Honourable the Leader of the Opposition, on Fri day, March 8th.

He asked of me if I would indicate how many authorized signatures are on the cheques drawn-- I'm assuming he didn't really mean how many, but who -- and also if I could indicate whose signatures are authorized for cheques on the PEP program. I took the questions as notice and I might inform the honourable member that under

section 48 (2) (3) and (4) of the Financial Administration Act, payments out of the Consolidated Fund are made by cheque, every such cheque is executed by such officers as may be authorized by the Minister for that purpose, and these cheques may be signed by hand or by mechanical devices.

March 12, 1974 1295 ORAL QUESTIONS (MR. CHERNIACK cont'

d) By Order-in-Council 1307 of 1969, the officers authorized to sign the cheques are the Minister of Finance, who is also known as Provincial Treasurer, whose name you may know; the Deputy Minister of Finance, who is also known as the Deputy Provincial Treasurer, Mr. Stuart Anderson; the Assistant Deputy Minister of Finance for Administration, Budget and Finance, Mr. Charles Curtis; the Director of Financial Administration, Mr. Neil Benditt; and the Departmental Accountant, Mr. Wood.

Over 99 percent of the cheques prepared in the department bear the Deputy Minister's signature which is put on mechanically, but in certain other cases, for example where a cheque has been spoiled or in case of emergency or when cheques cannot be issued through the computer, the regular pre-audit procedures are followed, and of course only those persons authorized by Order-in-Council sign these cheques.

There are a number of other bank accounts that have been set up to meet special needs, such as the Field Payroll Accounts - the Department of Highways and Mines have that kind; Accountable Advance Accounts and Emergency Accounts. The Department of Health and Social Development have been authorized to sign cheques on these special bank accounts and the persons authorized would be the responsible officials from the department concerned. They are authorized to sign on these accounts by the Minister of Finance and there is a limit, I'm informed, on all Field Accounts of between $200. 00 and $500. 00.

In response to the second question regarding PEP program grant moneys, these are paid by cheque out of the Consolidated Fund in accordance with the standard accounts payable procedure - that is pre-audit and computer cheques. One PEP program, the rural PEP organi zation, operating out of the Department of Agriculture, has 13 persons authorized by the Mini ster of Finance to sign the cheques. Now incidentally, there are a few departments that have clearing accounts which are deposit accounts only.

They deposit in certain banks as a matter of convenience and the deposits are either automatically transferred to the central bank account or a cheque is issued from the department, but the only cheques that is permissible to be issued is one made payable to the Minister of Finance. Now the question of the PEP organization. The persons authorized to sign, as I indicated they are all employees of the Department of Agriculture. The maximum cheque they're author iz'Cd to sign is $500. 00 and may I parenthetically say, Mr.

Speaker, that every employee of government is bonded for $1 million per event for fraudulent practices. The persons authorized to sigri for • . . MR. J. DOUGLAS WATT (Arthur): Did the Minister say that the maximum was $500. 00? MR. CHERNIACK: Tha�'s my information - per cheque. MR. WATT: Per cheque but not per person. MR. CHERNIACK: Well of course not per person. It's an annual authority, I should think, and they're authorized to sign more than one cheque when they deal with their program. The people involved, the names are: G. A. Arnott, H. Beauchamp, B. Bracken, W. R. Macklem, R. Mitchell, T. A. Nebbs, T. L.

Pringle, F. J. Slevinsky, Caroline Steele, W. T. Uhryniuk. A. A. Watkins, L. Vigfusson and H. G. Sigurdson. MR. SPEAKER: The Honourable Leader of the Opposition. MR. SPIVAK: Mr. Speaker, I wonder if the Minister of Finance is in a position, and he may very well want the Minister of Co-operative Development to answer this, that once the Consolidated Fund trust cheque for the co-operatives is completed, that its payment is made out of the general fund, it is not within the jurisdiction of the Department of Finance. 'My under standing is there is $500, 000 ... MR. SPEAKER: Question please. MR. SPIVAK: Well, Mr.

Speaker, . MR. SPEAKER: The honourable member is debating. MR. SPIVAK: I am not debating, Mr. Speaker. MR. SPEAKER: The Honourable Minister of Finance. MR. CHERNIACK: The answer to the question would be that on Thursday at 10 o'clock there will be the meeting of Public Accounts, and the question seems to be one which logically should be asked at that level. Otherwise, if he wishes to write me a letter or talk to me in my office, I will be glad to hear his . . . MR. SPEAKER: The Honourable Leader of the Opposition.

1296 March 12, 1974 ORAL QUESTIONS MR. SPIVAK: I wonder if the Minister could confirm that there is no signature right from the Department of Finance involved in the moneys, PEP moneys, handled by the Department of Co- operative Development once payment of the bulk cheque is given from the Department of Finance to the Department of Co-operative Development. MR. CHERNIACK: Mr. Speaker, it's only a few minutes ago that I gave a rather compre hensive answer and I remember very clearly and I think it was very very clear.

Now, if the honourable member wants to debate what I said, that's a different thing, but if he just wants to ask questions to get at the same information I've already given, I see no point to that. A MEMBER: It's beyond his comprehension. MR. SPIVAK: Mr. Speaker, I wonder if the Minister of Finance can confirm that the $500, 000 PEP fund handle d by the Department of Co-operative Development does not have a signatory from the Provincial Government. MR. CHERNIACK: Mr. Speaker, I repeat the answer I gave a moment ago, that I think that the statement I made is very clear.

If it is not clear enough, then by all means he can ask for elaboration, but if he wants to get into a discussion on specific cheques and specific amounts I don't believe this is the place for it, I don't think I should give him the benefit of permitting another two hours and fifteen minutes in the question period. MR. SPEAKER: The Honourable Member for Riel. MR. DONALD W. CRAIK (Riel): Mr. Speaker, I'd like to direct a question to the First Minister.

Can he advise the House ho.v long the government has been aware of the more than $40 million overrun of Manitoba Hydro in the last 12 months, and if they were aware whether any investigation was undertaken? MR. SPEAKER: The Honourable First Minister. MR. SCHREYER: Mr. Speaker, we have bee..'l aware that there is a pattern of cost es calation in heavy construction projects in this province, everywhere in this province and every where across the country.

I've asked for briefings from time to time from the chairman of Manitoba Hydro with respect to the generality of progress on hydro construction sites, and also occasional briefings with respect to the pattern of inflationary cost escalation, etc. and also the nature of project changes, work order changes and the like. MR. CRAIK: Mr. Speaker, a supplementary question. In view of the cost given by Mr.

Cass Beggs two years ago, which were 50 percent of that indicated today, would it not be con sidered to be appropriate for the government to make inquiry for 100 percent overrun in two years of costs that were given as a basis for undertaking the project? MR. SCHREYER: Well, Mr. Speaker, I don't accept my honourable friend's figures as being precise, and in any case, Mr.

Speaker, if one wants to insinuate that construction cost increases are a reason for suspecting something untoward, I would merely ask my honourable friend to go back to the record of 1966 and look at the figures that were given this House with respect to Kettle Rapids, with respect to Lake Winnipeg Regulation and Churchill River Di version, all of which figures were given to this House, all of which in their totality were supposed to come in under $200 million. MR. CRAIK: Mr.

Speaker, might I then ask the First Minister a question relating to a more recent statement by himself in this House 12 months ago and not less than 12 months ago, where he questioned that $175 million was a high figure and said that it was a fallacious statement and that the fact was that the cost would be less than that and we're told today that they are $231 million. MR. SPEAKER: Order, please. The question is argumentative in that context in re lation to history. I would hope the honourable members would at least cooperate today. The Honourable Member for St. Boniface. MR. J. PAUL MARION (St.

Boniface): Thank you, Mr. Speaker. I direct my question to the Acting Minister of Ed ucation. I wonder if the Acting Minister could advise if the De partment of Education ... well whoever is the acting Minister of Education, is the Department pursuing the possibilities and the advisability of constructing multi-purpose school facilities that can be used effectively for both educational and recreational purposes throughout the province? MR. SPEAKER: The Honourable Minister of Health. HON. SAUL A. MILLER (Minister of Health and Social Development) (Seven Oaks): Mr.

Speaker, the department has been actively encouraging municipalities and school divisions to

March 12, 1974 1297 ORAL QUESTIONS (MR. MILLER cont'd) ..• work together to achieve that very aim, and they have been success ful in some areas and in some areas they haven't. MR. MARION: A supplementary, Mr. Speaker, to the same Minister. Has the department evaluated the results of the joint facilities that presently exist and have been constructed over the last short period? MR. MILLER: Well, I don't know to the extent of which an evaluation took place.

I think the best evaluation is the people living in the community themselves, but if there is an evaluation in the department I'll take the question as notice and report back to the House if I find one. MR. MARION: A final supplementary on the same subject to the same Minister. Does the department have a program of research on how to improve this multi-purpose use of a school facility that would probably enhance the multi-use services of the Winnipeg schools? MR.

MILLER: The department certainly has been working very closely with school boards and with municipalities wherever possible to encourage the kind of construction that is being discussed, and I know that they have put forward ideas and help in developing the kind of construction that the Member for St. Boniface is suggesting is preferable, and I know that the department has staff resources which can be made available to school divisions and to com munities. MR. SPEAKER: The Honourable First Minister. MR. SCHREYER: Mr.

Speaker, some time ago, a few days ago, the Honourable the Leader of the Opposition asked me to undertake to obtain a copy of the transcript of a conver sation aired on the CBC between Governor Link of North Dakota and the host of the local pro gram. I have done so, I perused the transcript and I can say that with respect to the state ments or comments made by the Governor of North Dakota that his statements I regard as being accurate and a fair commentary as befitting an honourable gentleman.

There is perhaps one reference here which I would take issue with, but later in that same transcript the Gover nor makes the correction himself in any case. So that is the only comment I have with respect to that question, Mr. Speaker. There is no reason to question the statement made or state ments made by the Governor on that occasion. Statement s made by other persons on that pro gram are completely another question. I take issue with almost everything that was said. MR. SPEAKER: The Honourable Member for Fort Rouge. MR. LLOYD AXWORTHY (Fort Rouge): Mr.

Speaker, I have a question for the Minister of Health and Social Development. In view of the announcement made yesterday by the Federal Minister of Health concerning a new Guidelines for Day Care, can the Minister now indicate to the House whether the Provincial Government is prepared to announce a permanent day-care program for the Province of Manitoba. MR. SPEAKER: The Honourable Minister of Health. MR. MILLER: Mr. Speaker, the guidelines, the announcement of the guidelines is most welcome.

We have been waiting for it; and I expect that within days, literally, we will be getting a formal announcement from Ottawa with regard to this agreement with Manitoba. MR. AXWORTHY: A supplementary, Mr. Speaker. Could the Minister indicate whether the indicated provincial program would also apply to commercial day-care centres and to lun cheon-after -school and home-care programs for children below the school age? MR. MILLER: Mr. Speaker, there are three questions, one dealing with commercial enterprises.

One of the criteria of the Federal Government is that it be non-profit co-oper ative bodies and therefore that would rule out private commercial enterprises. The second question, whether this would be for luncheon-after-school programs; we have to determine whether or not this is covered. We're not sure at this point in time. The third, will it be for children under the age of six, that is less than school age? Certainly, that• s the age group that will be the target group. MR. AXWORTHY: A supplementary, Mr. Speaker.

Is the Provincial Government then planning to supplement the federal program in these areas that were mentioned in the previous question, if they're not already covered by the federal .. , ? MR. SPEAKER: Anticipatory. The Honourable Member for Riel. MR. CRAIK: Mr. Speaker, I direct a question to the First Minister- it's with regards to the statement in Grand Forks last night by the Minister of Mines and Resources. Can the First Minister indicate whether the more aggressive stand taken by the Minister of Mines

1298 March 12, 1974 ORAL QUESTIONS (MR. CRAIK cont'd) ... and Resources regarding the Garrison project is a recognition by the province that likely damage will occur to Manitoba as a result of the flooding of the Garrison? MR. SPEAKER: The question is being framed in the argumentative again. The Honourable First Minister wish to take up the argument? MR. SCHREYER: Well, Mr. Speaker, I have too much respec t for the Chair to engage in argumentation during the question period but I would like the opportunity to reply to the question if it has been allowed - I assume. MR.

SPEAKER: Well it's on the floor of the House and that• s the whole problem with the Chair, that they all get on the floor of the House and then the Chair has no option but to allow answers. Now if this is the way the gentlemen wish to proceed I'm welcome to it, but I wish they would outline the rules so that I could follow them. The Honourable Member for Riel wish to rephrase his question? MR. CRAIK: Well, Mr. Speaker, can I ask whether this quotation taken from the wire service is correct, that Manitoba Cabinet Minister Sidney Green says the Provincial Government does not see how the Garrison Diversion • • • ?

MR. SPEAKER: Order please. Again, the question is asking whether a statement in a news account is correct. That's contrary to the rules. The Honourable Member for Fort Rouge. MR. AXWORTHY: Mr. Speaker, I'd like to ask a question of the First Minister. MR. SPEAKER: Order please. There can be no supplementary to something that• s out of order. The Honourable Member for Fort Rouge. MR. AXWORTHY: Thank you, Mr. Speaker.

I'd like to ask the First Minister if he could indicate to this House that when the Minister of Mines and Resources was on his sojourn to North Dakota, whether he had occasion to meet with officials of the State Government of North Dakota to discuss the Garrison Diversion Project again. MR. SPEAKER: The Honourable First Minister. MR. SCHREYER: Mr. Speaker, I think I heard the question in its entirety. My honour able friend was asking whether there are any plans to meet again with officials of the State of North Dakota? MR AXWORTHY: Mr.

Speaker, if I may repeat for the First Minister, I was aking whether on the occasion of the sojourn of the Minister of Mines and Resources recently into the State of North Dakota whether he has had occasion to meet with State officials of that State Government to discuss the Garrison Diversion project once again? MR. SCHREYER: Well, Mr. Speaker, Pm not in a position to say whether or not my colleague the Minister of Mines was able to meet with officials of the State of North Dakota. He was addressing a group in the State of North Dakota, I believe attached or relating to the Uni versity there.

I can advise my honourable friend that our position at this point in time is that we have received through the Government of Canada information from the United States De partment of State that no construction that is potentially affecting waters flowing into Canada will be undertaken unless it is clear that obligations under treaty law will be met.

We accept that statement as a tentative position and have agreed with the State of North Dakota and are arranging with our respective Federal Governments to ensure that there is a systematic follow-up and monitoring to ensure that there is no deviation from that ironclad commitment given by the U. S. to Canada and to our province. MR. AXWORTHY: Mr. Speaker, I have a supplementary to the First Minister.

Could he indicate to the House, then that in view of the statement made by the Minister last night that the Provincial and Federal Governments would consider all necessary steps that would be required, has the Minister or is the Minister planning to meet with his counterparts, mini sterial counterparts in Ottawa, or is he now meeting with ministerial counterparts in Ottawa to discuss this matter and to map out what possible steps would be available to be used? MR. SCHREY ER: Well, Mr. Speaker, the question asked, the answer's very simple.

The arrangements are in place for a continuing liaison with officials of the Government of Canada with respect to ensuring that the best and most systematic ways and means are followed to ensure a monitoring. in turn to ensure that the undertaking, the unequivocal, ironclad un dertaking by the U. S. is not deviated from in the future. MR. SPEAKER: The Honourable Member for Riel. The Honourable Member for Fort Rouge.

March 12, 1974 1299 ORAL QUESTIONS MR. AXWORTHY: Mr. Speaker, I would like then to ask the First Minister if he is then prepared to table in this House correspondence documents or communiques between himself or between the Province of Manitoba and the Federal Government concerning the Garrison Diversion project, so that this House may also know the terms of those agreements and under standings. MR. SCHREYER: I should think we'd be happy to, Mr. Speaker. It merely requires an Address for Papers through His Honour, and subject to the usual clearance from the authorities of the Government of Canada. MR.

SPEAKER: The Honourable Member for Riel. MR. CRAIK: Mr. Speaker, I address a non-argumentative question to the Minister of Finance. Can he advise when the budget will be coming in? MR SPEAKER: The Honourable Minister of Finance. MR. CHERNIACK: Mr. Speaker, that is still a matter of argument with my department. It's a question of mechanics.

I may say that I had hoped to do it this Thursday; I am changing my mind, I was thinking of Friday; and the probability is that it will be the following Thursday, but I'm conscious that honourable members - that would be the 21st - I'm conscious that honourable members opposite, some of them, are concerned about interference with the Federal Conservative -- (Interjection)-- Yes, which takes place next Monday and Tuesday.

If by any chance I find that I'm ready and anxious to go prior to that, then I've already discussed with the leaders of the two opposition parties the possibility of postponing the Monday and Tuesday debates and not to count as budget debates. This side has agreed to that principle so that there won't be any difficulty in that respect. I will inform the House further, certainly give some notice in the event that we go ahead sooner than the 21st. MR. SPEAKER: The Honourable Member for Birtle-Russell. MR. HARRY E. GRAHAM (Birtle-Russell): Thank you, Mr.

Speaker, I have a question for the Minister of Northern Affairs. I would like to ask him how much freight has moved north on the Hole River, Ste. Therese Road this week. MR. SPEAKER: The Honourable Minister of Northern Affairs. HON. RON McBRYDE (Minister of Northern Affairs) (The Pas): Mr.

Chairman, the amount that was estimated by the larger carriers hauling freight into the Island Lake Region, which I assume that's what the honourable member is referring to, their estimate that the total amount of tonnage that they would haul this year was 5, 228 tons, as of today's report, if the members will let me finish, was 4, 557 - excuse me - 4, 572 1/2 tons, and if the member wants to find out for this week he can subtract that figure from the figure I gave him last week and he'll have the amount hauled this week. The remaining amount to go on that road, Mr.

Chairman, from the estimates of the larger carriers, is 655 tons, which means that that amount could be cleared up within a very few days and the road is still in operation, and I see no problem that the communities of Garden Hill, Waasagomach and Ste. There sa Point will be fully serviced in terms of getting their goods in, if in fact the people there placed orders with the carriers and have orders that are coming in. MR. SPEAKER: Orders of the Day. The Honourable Minister of Labour. MR. PAULLEY: I was going to suggest, Mr.

Speaker, if there are no more argumenta� ti ve questions we might go into the Adjourned Debates on Second Reading. I notice . . . honour� able members had risen but that would be for . . . MR. SPEAKER: The Honourable Member for Arthur. MR. WATT: Mr. Speaker, my question is to the Minister of Agriculture and it's not argumentative. I'm just asking if he has followed up or what negotiations he's had with the Federal Government in regard to the loss of $300 million in sales for western grain in the past crop year? MR. SPEAKER: The Honourable Minister of Agriculture. MR. USKIW: Mr.

Speaker, I would not want to respond to my honourable friend on an assumption based on some hypothetical situation or figure. MR. SPEAKER: The Honourable Member for Assinihoia. MR. PATRICK: Mr. Speaker, I have a question for the Honourable Minister of Labour. In view of his announcement to the House just a few minutes ago about the unemployment situation would the Minister now undertake a labour supply study in the garment industry and ascertain if a labour shortage can be met without importation of labour?

1300 March 12, 1974 ORAL QUESTIONS MR. SPEAKER: The Honourable Minister of Labour. MR . PAULLEY: Yes, Mr. Speaker, I would be more than happy. As a matter of fact I would like to indicate to my honourable friend the Member for Assiniboia and all other members that I am studying various reports that have been made in respect of the garment industry and I am hopeful - I say that with some reservation - I am hopeful that the matter will be resolved internally. MR. PATRICK: Mr. Speaker, I just wish to thank the Minister for that undertaking.

Can I- I would like to havethe.privilege of the House or leave of the House to make a non political statement, Mr. Speaker. MR. SPEAKER: Agreed? (Agreed) The Honourable Member for Assiniboia. STATEMENT MR. PATRICK: Mr. Speaker, it does not affect my constituency but the reason I'm making the announcement because it was brought to my attention and I was asked to make the announcement, and I just want to bring to the attention of all the members so they're aware of a Manitoba All-Indian Hockey Tournament that will be held in Dauphin on March 15, 16 and 17.

This is a big occasion and I know there will be an influx of approximately 2, 000 people. I have watched these hockey tournaments in Winnipeg, and particularly in St. James, and I recommend them to all members of the House. And the reason I'm bringing it to the attention of the members is because I was asked to do it, Mr. Speaker. SECOND READING - GOVERNMENT BILLS - NO. 7 MR. SPEAKER: Orders of the Day. Bill No. 7 and the amendment thereto. The Hon ourable Member for Lakeside. MR. ENNS: Mr. Speaker, I wonder if I may have the indulgence of the House to have this matter stand? (Agreed) MR. PAULLEY: Mr.

Speaker, I have no objections at this stage - and I emphasize that to the deferment of the contribution of my honourable friend from Lakeside; I look forward to it in anticipation. But may I suggest that if any other honourable member wishes to make a contribution that they be allowed so to do. MR. ENNS: Mr. Speaker, that generosity on my part was, I believe, understood. MR. SPEAKER: Bill No. 17. The Honourable Member for Birtle-Russell. MR. GRAHAM: Could I have this matter stand please, Mr. Speaker ? (Agreed) BILL NO. 18 MR. SPEAKER: Bill No. 18. The Honourable Member for Winnipeg Centre. MR. J.

R. (BUD) BOYCE (Winnipeg Centre): Mr. Speaker, the other day there seemed to be an indication on the part of the opposition that they wanted this bill to go to committee andibeld it for the Minister of Highways to speak if he so chose. MR. SPEAKER: The Honourable Minister of Highways. HON. PETER BURTNIAK (Minister of Highways) (Dauphin): Mr. Speaker, if tl:ere•s no one else wishes to speak at this time I would like to speak on it,and probably closing debate on this particular bill.

During the last couple of weeks or so since this bill was introduced for second reading, I noticed that two members, honourable members on the Opposition side, have spoken on it and I would gather from their comments that perhaps the members are not just quite sure what we're trying to do with this particular bill.

I thought in the brief comments that I made on second reading that it was a rather simple bill that wouldn't require too much debate, I don't think it's very controversial, but nevertheless there were some questions asked that I would like to hopefully clear the problems that the honourable members might have with this particular bill. When we talk about, Mr. Speaker, when we talk about industrial roads, we simply mean just that, dealing with industry in that particular area of the province where industrial roads would be of benefit.

Now, first of all, I'd like to answer one or two of the questions that the Honourable Member for Virden had asked, and of course I would suggest, Mr. Speaker, that basically in his comments he was completely out of line as far as this particular bill is con· cerned, and the reason why I say this is because there is another program - and I appreciate

March 12, 1974 1301 BILL NO, 18 (MR. BURTNIAK cont'd) .•• the honourable member's concern insofar as railway line aband onment and so on, the larger trucks that will be perhaps used if and when some of these branch lines are abandoned, farm trucks I'm referring to, and of course I'm sure that to most of us rural members this is a concern -b ut I would say this, Mr. Speaker, at this point in time, thatThope that there is a change of mind, that maybe some of these branch lines that were scheduled to be abandoned perhaps in 1975 next year, will not be abandoned.

I think that we hope that there is a different type of policy. And just on that point I would like to also suggest that finally the Federal Government in Ottawa has realized that there is a Western Canada, and today and the last few months, in the last few months, Mr.

Speaker, we have been working with the Federal Government, not only the Province of Manitoba but also the other three western provinces, Saskatchewan, Alberta and British Columbia, because the Federal Govern ment now also realizes that something has to be done because eventually we will have to allow larger truck weights on our highways and they are dealing with us now, or we are dealing with them, to try and make some sort of arrangement and they are willing to contribute certain amounts of dollars to upgrade some of our road systems in order to make them capable enough to haul these larger loads .

But this has got nothing to do with this particular bill insofar as industrial roads are concerned. Now some of the other questions that were asked by the Honourable Member for Birtle Russell, and I must say that they were good legitimate questions, I don't think that he was implying anything that could be read into it, but there were a number of questions that he asked, and I think one of his biggest concerns, Mr.

Speaker, was the fact that if we called a certain road or a portion of a particular road, as an industrial road, he was concerned what about the travelling public where they have to pay insurance and license and so on. Well, may I say this, Mr. Speaker, that as I pointed out in my short explanation of this bill, that industrial roads are really meant for northern parts·ofthe province, where they would be allowed to haul larger loads, wider, longer and so forth, particularly heavier loads, and I must explain to the members what we actually mean when we talk about larger loads.

As far as the Department of Highways is concerned, we will construct - and I'm talking about the construction of some of these, there will be some construction of these roads, in dustrial roads, they'll be constructed up to a standard of, say, average PR, but if whatever the industry may be that will be utilizing or using these roads, will want to have them to carry these larger loads, they will then contribute something in whatever the amount may be, over and above a PR standard, and this will be their contribution.

We also say that sometimes there may be a situation whereby a portion of a PR or PTH may be declared as an industrial road.

I don't know just how much we should be concerned about that because there may not be that situation at the present time, but some time in the future this may be the case; and of course we cannot prevent the travelling public from using this road but this portion of the road will be declared as an industrial road, would be posted so that everybody could, the drivers could take the necessary precautions, and of course, after it's taken off as an industrial road at some time in the future, then for whatever the cost may be of repairing this particular group of people whether it's a company or whatever, will then be asked to contribute the dif ference in the cost.

MR. GRAHAM: ... ask the Minister a question at this time? MR. SPEAKER: The Honourable Member for Birtle-Russell. MR. GRAHAM: Would the Minister consider the Hydro Road from Gillam to Kettle to Long Spruce as being that type of industrial road which he is considering? MR. BURTNIAK: Yes, that's right, because basically it's for the hauling of larger equipment and so on.

Now I'm pretty sure that the honourable member is also concerned about some of these roads that will not be used by the general public and I think that there's a saving here because, you know, in my view, I think that in many cases where large equipment, heavy equipment is being transported from point A to point B for a certain type of development, I don't think that we're too concerned about the general public going to those places at the time of their construction, and I think that once that road is constructed, then when that equipment is not moving on that particular road, then of course it becomes either a PR or something and the general public can then use it, because in the first place perhaps the construction of the road could be just a very, very pioneer type of a road, and then once the road is punched through to a certain community, naturally of course the. pressure will be there to build up this

1302 March 12, 1974 BILL NO. 18 (MR. BURTNIAK cont'd) ••• road for the general public. That means it would probably be much more expensive doing it that way, and I don't think it would be penalizing too many people in that respect. As far as the question on the turning over these industrial roads when that term, as I use it, is taken off. when we do not need this road as an industrial road it will be taken over or turned over to the municipalities -W e do not mean any PR or PTH or portion thereof that is declared as an industrial road to be turned back to the municipality.

It's any of these roads that are built as industrial roads within a certain municipality; when we don't need them as an industrial road then they'll be turned over to the municipalities and of course I think the municipality is only too happy to have these kind of • QUESTION put, MOTION carried. BILL N0. 20 MR. SPEAKER: Bill No. 20. The Honourable Member for Virden. MR. MORRIS Mc-GREGOR (Virden): Mr. Speaker, this again looks like routine amend ments and I'll just draw the Minister's attention to 258 (1).

In talking to some truckers, and this is something that they've been looking for for quite some time, it's been a complaint over many years that I've been here as a Member, and I think it will be appreciated, that particular subsection. Another question that does come up - they've brought to my attention in any case - is the fact that some of the Autopac sales are going to customers and they in turn are loaded up and going right out of the province for resale in another jurisdiction entirely.

And also re garding your special license and it says insurance too, and I think we could agree with this providing this lower insurance up north isn't being subsidized by the regular Autopac customers in the other part of the province, and there's no stipulation of what this price will be. I think one of my -- the colleague from LaVerendrye will be carrying on in some areas that he has some question. Thank you, Mr. Speaker. MR. SPEAKER: The Honourable Member for LaVerendrye. MR. BOB BANMAN (LaVerendrye): Thank you, Mr. Speaker. I just have several points to make that I would like to make.

I'd like to emphasize the point that my honourable colleague made with regard to Autopac sales. At present, private individuals are buying cars at the au to sales; they can then take that car home, repair it in their backyard, sell the car once again privately and are not subject to any safety regulations whatsoever.

This matter is of concern to both the trucking association in Manitoba and also to the automobile association, and I think it should be of concern to the Consumer Protection people because somebody ends up buying this car without receiving a safety certificate and without possibly receiving any qualified attention at all. The other point I would like to make is that the trailer manufacturers in Manitoba have asked this government in a brief approximately six months ago to amend the Act, which would mean that all trailers sold in Manitoba would have to be CSA approved.

I would ask the Mini ster to have a look at this and see what the feasibility of this would be and see if it warrants the attention for a further amendment to the Act. I would also like to ask the Minister as to what the fixed amount of moneys would be with regard to the student driver program mentioned. I would also ask the Minister to have a serious look at the replacement equipment on vehicles. At present there are certain replace ment parts, I think, put on automobiles which I feel should not be made available to the con sumers in the province, One, for example, is mufflers.

At present many makes of mufflers are sold; some of them exceed the noise limits that the authorities and many local bylaws limit us to. The only way a person can find out if the muffler is too loud is to go ahead and put it on the car. If it does turn out that it's too loud, the law enforcement officers ticket him and he's once again required to take it off and replace it once again. So this is another area that I would like him to check into.

I have several other concerns related to the Highway Traffic Act and basically the safety of the vehicles on the road at present and it's my intention to introduce several bills and resolu tions in this session to try and make the motoring public a little safer on the highways. MR. SPEAKER: Are you ready for the question? The Honourable Minister will be closing debate. The Honourable Minister.

March 12, 1974 1303 BILL NO. 20 MR. BURTNIAK: Yes, Mr. Speaker, I will not elaborate any more on this. I would like to thank the members for their concerns and their suggestions. One of the things that we are doing, of course, and I appreciate the fact that the Honourable Member for LaVerendrye is going to be bringing some amendments insofar as safety on our highways is concerned, I also will be having more amendments coming in at a later time dealing with pretty well, I hope, pretty well the same kind of things that the honourable member has in mind.

On the question d' mobile homes, I would perhaps suggest that the Minister of Labour could perhaps answer that particular question, Mr. Speaker. QUESTION put, MOTION carried. MR. SPEAKER: The Honourable House Leader. MR. PAULLE Y: •.. to call Bill No. 9 Mr. Speaker, but I understand that that will be stood. My colleague the Minister of Finance will make the motion to go into Supply. MR. SPEAKER: The Honourable Minister of Finance. MR. CHE RNIACK: Mr. Speaker, I beg to move, seconded by the Honourable Minister of Labour, that Mr.

Speaker do now leave the Ch air and the House resolve itself into a Co mmittee to consider of the Supply to be granted to Her Majesty. MR. SPEAKER presented the motion. MATTER OF GRIEVANCE MR. SPEAKER: Order please. The Honourable Leader of the Opposition. MR. SPIVAK: Mr. Speaker, I rise at this point on a grievance to deal, Mr. Speaker, with the arguments to be advanced that there should be a judicial inquiry with respect to the Departme nt of Co -operative Development and the allegations that have been made both inside and outside this House. Mr.

Speaker, I intend to deal with this matter in the manner of first dealing with the questions and answers given by the Minister yesterday to a whole series of questions from this side, and in the course of doing this, Mr. Speaker, to demonstrate without quel!�.i.on that the information supplied to the House in most cases was inaccurate, misleading and, in certain cases, completely untrue, and having made that statement, Mr. Speaker, and having belief that I will be in a position to prove that statement, I then, Mr. Speaker, suggest that there is no question of the necessity for a judicial inquiry to be undertaken.

For many reasons Mr. Speaker, because the Minister constantly kept referring to the fact that it was the Depart ment's response to the questions, that the members of his department had given him the answers, and they of course are the very people to whom allegations have been made. And so, Mr. Speaker, I will do this by dealing not with every one of the 32 or 33 questions that were answered yesterday, but with some, but enough I think to be able to indicate the position that I propose to put to this House. Mr.

Speaker, the first question that the Minister of Co -operative Development dealt with was the bankruptcy of the present fishing co-operatives and the question that was asked whether it had been brought to his attention. His answer was as follows: "No co-operatives presently are in bankruptcy proceedings. There are 17 co-operatives engaged in commercial fishing; out of 17 only four are experiencing financial difficulties. These are co-operatives in remote isolated areas. The following is the list in difficulty: Southern Indian Lake Co-op erative; Kee Noe Zae; Manitou Sakahikun Co -operative; Ilford.

The Department of Indian Affairs has acted as manager during the 1973 season for Kee Noe Zae so that they are really relating most directly to the three remai ning that are in trouble. " First, Mr. Speaker, I put the question: is not the Minister relying on a legal distinction between bankruptcy and proceedings in bankruptcy? When one considers that the Co-ops assets will include, Mr. Speaker, receivables from the fishermen themselves, which are not collectible, the question of the insolvency of the Co -operatives becomes obvious.

On .the statements of the Department, the receivables will show the moneys owing by the fishermen, and I suggest, Mr. Speaker, they are not collectible . The only reason, Mr. Speaker, why creditors have not embarked on proceedings in bankruptcy is that they would be wiped out, and they are not about to try and destroy themselves. They are counting on the only thing which has been sustaining the Co -ops and that is the continued injection of new money into the Co-ops in the form of government grants. And while, Mr.

Speaker, the Department of Indian Affairs may have managed for the 1973 season for Kee Noe Zae, prior to that it was in fact managed -

1304 March 12, 1974 :MATTER OF GRIEVANCE (MR. SPIVAK cont'd) .•• supervised by the Department of Co- operative Development, and the accumulated loss up to that time was certainly under the management of the Minister's department. The second question answered by the Minister was the following. This was the question: "I wonder if the Minister can indicate whether he's had an opportunity of reviewing the balance sheets and financial statements of co-operatives. " Mr. Speaker, remember, he is the Mini ster of Co-operatives. His answer: "Well I discussed this matter with the department, Mr.

Speaker, and I want to say to my honourable friend that we have reviewed those that we have had a financial interest in, and where we have some difficulties, and it's the three that we were talking about earlier, but really, I don't normally look at the balance sheets of all our co-operatives because they are indeed private organizations, and unless we have some public interest in them, they really don't come before me. And to the extent that they come before the department for advice, that of course is an ongoing thing and has always been that way. " Mr.

Speaker, the Minister says that he does not normally look at the balance sheets unless there is some public interest in them. He does not construe the public interest. Questions were raised in this House, public moneys are involved, the audit and records are supposed to be kept in his department. Over a million dollars of PEP funds will have been distributed from last year .and this year, and they are to all intents and purposes handled by his department.

On his own admission financial problems have occurred, yet he said that he would normally not examine the balance sheet unless: the public interest was involved. I ask you, Mr. Speaker, how much greater would the:public interest have to be so, for him to get involved? Mr. Speaker, let me now deal with the third question and the third answer. Mr. Speaker, the Leader of the Opposition- and now I'm referring to myself - asked the following question: "My question is to the Minister of Co-operative Development.

I wonder if he can indicate whether his department is in the process of attempting to negotiate the sale of the fishing co-operatives to the Department of Indian Affairs, the Federal Government. " The answer from the department, the answer, Mr. Speaker, from the department, not the Minister, the answer from the department is as follows; "

(1) No, the department is not nor ever did negotiate to sell any assets of the co-operatives to the Department of Indian Affairs or any other party.

(2) All co-operatives are legal and spvereign entities by them selves and the department has no authority to offer for sale assets that do not belong to the department. The department in some instances assists the co-orrratives in negotiating for leases of their assets between the Freshwater Fish Marketing Co rporation and the co-opera tives for the purpose of agency appointment. There have been seyeral meetings between the Manitoba Government officials and the FFMC to discuss the scope of FFMC responsibility.

Discussions were held and continuing attempts to convince the Freshwater Fish Marketing Corporation to accept more responsibility in the area of lakeside facilities, plant equipment, transportation arrangements, agency fees, grading, etc. And continuing on "with respect to the three co-operatives that are in trouble and over which we have had some direct input, I should like to advise members opposite that there have been negotiations with the FFMC with the idea of arranging some sort of rental or lease arrangement on the facilities of these four co-operatives.

Those discussions are continuing at the present time. " Mr. Speaker, I question his assertion that the possibility of sale has not been discussed between his Deputy Minister and the Freshwater Fish Marketing Corporation. And I file a letter, Mr. Speaker, for the benefit of the Minister, dated February 1, 1974, dealing with the assets of 16 or 17 co-operatives. Until the people who were involved at these meetings are sworn we will never know whether the question· was one of sale or lease or whetl er it involved three or four co-operatives or most of them.

And further, whether there was any authority from the boards of directors as alleged by the Minister allowing him to negotiate either on a sale or lease of the assets of the co-operative. No. 4. The next question that was put and answered by the Minister. By way of another question of the Minister, I wonder if he can indicate whether the managers of the fishing co-operatives are in fact managers appointed and selected by the Department of Co-operative Development. The answer, by the Minister: "No, the board of directors of Co-operatives hire the managers. 2.

In some in stances the Department assists in hiring or locating managers. This however is done with the consent of the local boards. "

March 12, 1974 1305 MATTER OF GRIEVANCE (MR. SPIVAK cont'

d) Mr. Speaker, the answer that was provided by the Minister begs the basic question. Do the board of directors of the fishing co-operatives really understand the issues before them? We are dealing with largely unsophistocated people who substantially do what the department suggests. In the case of the Southern Indian Lake Co-operative, the co-operative develop ment officer of the department was ultimately hired as the manager and he resigned from the department. In the case of Ilford, the co-operative development officer became the manager.

In the case of Kee Noe Zae the co-operative development officer became the manager. Mr. Speaker, the board of directors of the co-operatives will sign anything placed in front of them by the Department of Co-operative Development; but even with that, Mr. Speaker I doubt if authority for much of what has been done could be documented by the department if a judicial inquiry took place. And involved in all of this is the money running through the hands of the department that may have been mis applied and rightfully belong to the fishermen of the north. Mr.

Speaker, --(Interjection)-- Well, for the honourable member ... MR. SPEAKER: Order. MR. SPIVAK: .•. for the Honourable Member from Thomps on, yesterday I held a document dealing with Ilford which indicated that .at the time of the annual meeting in 1972 it was impossi ble for the board of directors to meet because no one was present. A MEMBER: Nobody was J:hern. MR. SPIVAK: No one was there. And then finally what happened is that a power of attorney was given to the department and they then managed and ran everything.

So when you say it's an insult to the people up north, I say it's an insult to the intelligence of this House to suggest that for all intents and purposes the board of directors of the co-operatives are in dependent and in effect have a separate entity. They are run and controlled by the Department of Co-operative Development and by the Minister. Mr. Speaker, the next question and I put it as it was put by the Minister when he answered it.

"I then wonder by way of another question to the Minister if he can indicate how many of the fishing co-operatives managed by-his department are audited by external auditors rather than by internal auditors of his department?" The answer. "N o co-operatives are managed by the department - and I think I've dealt with this already and I'l l deal with this even further later on. In some instances the department assisted in direct management through develop ment offices where no management personnel were available when needed.

In 1973 co-opera tive development officers acted as manager at Ilford for the summer season at the request of the board. This was to be only until a manager was located. Three co-operatives were audited by outside auditors. Kee Noe Zae in 1972 in summer of 1972 season. Southern Indian Lake. And I want to repeat this, Mr. Speaker, and I want the Honourable Minister to listen to what I'm going to say. Southern Indian Lake for the period ending April 30, 1973 was audited by two different firms, Ernst and Ernst on behalf of DREE, Burch, Findlay at the request of the Department of Co -operative Development.

Of course there was one other one here which is the Indian Rice Producers Co- op, never audited by the department. The balance of the co-operatives audited by the department, Mr. Speaker. Mr. Speaker, I'd like to if I may, file, because I'll make reference to it later on, the financial statement of October 31, 1973 of the Ilford Co-operative prepared by the Department of Co-operative Development. And Mr.

Speaker, because I'm going to make reference to it in a few minutes, I'd like to file as well the financial statement for Southern Indian Lake Co-operative as of March 31, '73, which is eleven months, filed by the department. Mr. Speaker, I now say that the answers that were provided by the Minister are not true. And I want to repeat, Mr. Speaker, that the answers that the Minister provided are not true. A MEMBER: Shame. Shame. MR. SPIVAK: Mr. Speaker, Burch, Findlay and McFarlane did not complete an audit of Southern Indian Lake for 1973 and I challenge him to produce such an audit. Mr.

Speaker, the statements I have filed were put together and I•m now referring to the eleven mo nths of Sou thern Indian Lake - were put together by the department to obtain a DREE grant. Right now, Mr. Speaker,within the department there is a new auditor who has been hired for the last couple of months who's attempting to bring the records of Southern Indian Lake together. There is no external audit for 1973. The records cannot be reconstructed and the source documents are not available. And the statements that the Minister gave were false.

1306 A MEMBER: Right. A MEMBER: Shame. March 12, 1974 MATTER OF GRIEVANCE MR. SPIVAK: Mr. Speaker, I already have indicated that it is the tradition in our pro ceedings in a Legislature and House of Commons that when a Minister brings in information that is not correct that he should resign. Mr. Speaker, I now put it again, that the reference made that an audit was completed by an accounting firm indicated in the answer by the Mini ster, was not true. And, Mr. Speaker, I regret to say that it would be unlikely that anything the Minister said is going to be able to really stand the test of a judicial inquiry.

Mr. Speaker, our concern is that if the information I suggest is so, is correct, then the problem of whether the fishermen have been robbed with the moneys that have actually gone through the department is an issue which has to be settled independent, by the government themselves. Mr. Speaker, without an inquiry how will one ever know what these true facts are? A MEMBER: Hear. Hear. MR. SPIVAK: Mr. Speaker, the next question and the next answer.

"By the way of another question of the Honourable Minister, I wonder if he can indicate whether the officials of his department who provide this assistance have brought to his attention any misuse of trust funds by the co-operatives?" The answer is: "No, no misuse of trust funds. Moneys collected, unemployment insurance, Canada Pension Plan, income tax are placed in regular accounts and dispersed by the local manager or board. This is normal business practice in both co operatives and other corporate structures. Some co-operatives owe remittances to the Re ceiver-General.

In these instances payment is made out of proceeds of next seasons operations. That is, Mr. Speaker, trust funds are paid out of next seasons operations. The Manitou Sakahikun in the amount of $11, 297. 70, the llford Co-operative Limited also owes to the Government of Canada an amount of $10, 078. 36; Kee Noe Zae is in the amount of $16, 000, again to the Government of Canada; Southern Indian Lake is $9, 500, again to the Government of Canada. These are for the particular deductions. Now those particular aspects have been discussed with me, Mr.

Speaker, but nothing out of the ordinary has happened in this particular instance at least as the department advises and they are still under review. " And I want to point out_ Mr. Speaker, "as the department advises" --(Interjection)-- Yes, as the department advises. The Minister's prepared to stand up and say that the department has advised him. Now, Mr. Speaker, the answer is a complete smokescreen. MR. CHERNIACK: Why? MR. SPIVAK: Well, Mr. Speaker, I must say to the Honourable Minister of Finance when I'm completed if he wants to defend the fact that statements have been made here that are not correct • • .

A MEMBER: By your people. MR. SPIVAK: Well, Mr. Speaker, the allegations made originally were against the officials of his department and if the Minister stands up and says that all I have done is receive information from the department officials then I think the Minister's competence has to be questioned. Mr. Speaker, the Minister has indicated a number of breaches of trust involving funds withheld under the federal statutes for unemployment insurance, Canada Pension, have occurred. These are new revelations.

These are additional to the breach of trust alleged in the Minutes of September 1st meeting that has already been referred to. It is almost incidental to note that the explanations offered by the Minister is utterly preposterous. He tells us that co-ops who have taken deductions from fishermen to pay to the Federal Government have failed to make such payment, but that they will make payment in the future of funds already owing by deducting them from the future earnings of the fishermen. Mr. Speaker, if they have not already made those deductions the officers of the co-ops have contravened federal statutes.

If they have made such deductions and failed to make payment they are in breach of trust and personally liable. If they were to deduct these amounts next year they would be deducting them for a second time. But finally, how can they make deductions next year when the co-ops have ceased operation? The question remains, Mr. Speaker: what of the breach of trust re ferred to in the Minutes of the meeting of September 1st? The next question, Mr. Speaker. "I wonder if he could indicate to the House", referring to the Minister, "whether any officials of his department who provide assistuwe to co-operatives

March 12, 1974 1307 .MATTER OF GRIEVANCE (MR. SPIVAK cont'd) ..• have brought to his attention any claims by the Federal Government for moneys owing to them not paid by the co-operatives?" The answer to this is, "Yes, from time to time income tax office requests assistance in collecting overdue payments. In these instances the department passes the request on to co-operative management. Because of isola ted conditions the department through its development offices has assisted the Federal Government in obtaining payment or passing on the request.

At this time the Federal Govern ment has placed third party claims on three co-operatives, Ilford, Southern Indian Lake and Manitou Sakahikun. " I'm sorry about the pronouncement, Mr. Speaker. Mr. Speaker, I have been up north and I've been in some of these communit ies. Mr. Speaker I must tell you that my comments on the previous response would apply to this as well. I want to point out, Mr. Speaker, that in the statement that I filed on Ilford, if one looks at trust liabilities you'll find a great variation between the trust liabilities shown and that referred to by the Minister.

In a statement prepared by his own department the trust liabilities that are shown are $25, 000, not $10, 000 as indicated. It may very well be, Mr. Speaker, that $15, 000 has been paid in the interval, but I question that, Mr. Speaker, and I wonder whether in fact this is not another case of the information being given by the Minister not being accurate, misleading and for all intents and purposes not true. Mr.

Speaker, another question: "I wonder if the Minister can indicate whether any of the officials of the Department who provide assistance to the co-operatives have brought to his attention any disbursement of dividends by co-operatives and out of capital rather than of earnings?" The answer to this is, "N o, Mr. Speaker. It was done at least not that I have been aware of - it was done, at least, not that I can be aware of nor has the department any knowledge of this happening. Dividend payments have always been based on earnings provided that the cash position was not impaired.

In co-operatives dividends are paid on earnings and not not on share capital. " Mr. Speaker, in connection with Southern Indian Lake there appears to be money missin g - and I'm going to be referring to that in a few moments - and only a judicial inquiry can tell how it is to be accounted for. A MEMBER: Hear. Hear. MR. SPIVAK: Mr. Speaker, another question: "My question is to the Minister of Co operative Development.

I wonder if he can indicate to the House whether there has been any fraudulent or misuse of Governmen t of Manitoba funds or Federal Government funds by any fishing co-operatives in the Province of Manitoba?" Mr. Speaker, the answer of the Minister. "The department advises as follows: No, to the best of my knowledge there has been no fraudu lent or misuse of government funds by co-operatives. " Mr. Speaker, my understanding is that moneys are advanced in trust by the Freshwater Fish Marketing Co rporation to its agents. Whether such moneys are the property of the Government of Ca nada is a matter of opinion.

The question is have moneys been fraudulently obtained and have trust funds been misused. This question has not been answered. In a matter of the PEP grants, and I believe we are talking of over half a million dollars last year and a half a million dollars this year, I understand that these moneys are placed in trust accounts for the co-ops and civil servants have access to cheques drawn on these accounts and cheques have been signed in blank and funds have been dispersed in this manner. The Minister reports to the House that civil servants in question inform him that they have not misused the funds.

Would he expect them to say anything else? And I suggest, Mr. Speaker, that here we need a judicial inquiry. Mr. Speaker, I do. not have in my posses sion right now, but I will have for the Minister a letter from one of the members of the Co -operative Development forwarding written cheques in blank to the co-operative. Mr.

Speaker, the next question: "I wonder if he can indicate whether there has been meetings of his department with the heads of the Freshwater Fish Marketing Co rporation, its officials, the Departm ent of Indian Affairs dealing with the allegations of misman agement, incompetence by the Department of Co -operative Development in its assistance and supervision of fishing co-operatives in northern Manitoba. " Mr. Speaker, when the first question was put to him he didn't answer in the same way that he answered the other day. --(Interjection) -- Oh no you did not. He answered the truth. Mr.

Speaker, yesterday he said the answer was yes. Three days ago he said the answer was no. --(Interjec tion)-- Yes he did, Mr. Speaker.

1308 March 12, 1974 MATTER OF GRIEVANCE (MR. SPIVAK cont'

d) Many me etings between the Department of Co -operatives and the FFMC have been held reviewing all matters of northern fisheries. Allegations only relate to one meeting, Mr. Speaker. The specific meeting referred to in question was held on September 1st to deal with Southern Indian Lake Co-op. Peter Moss at the meeting brougtt a number of things to the Deputy's attention, many which were hearsay. The main points alluded to, mainly the obtaining of funds fraudulently, was reviewed and definitely cleared and proven false.

The department advises that there has been no further communication in this re spect and that no allegations were made formerly and all of the misunderstandings at that time were cleared up at the particular meeting. Mr. Speaker, if that was true, I wonder if he can explain what caused Mr. Kalinowsky to be demoted. Will he relate the nature of the conversation on this matter between Mr. Kalinowsky and himself?

Will he table a copy of the letter that he referred to following this meeting which came into his possession from a civil servant, obviously written to somebody else, but arising from the meeting of September 1st, and can he justify now his initial answer when the question was put as to any allegations with respect to the misuse of funds and the possibility that in fact there have been, Mr. Speaker, there have been a question of management incompetence of the department discussed. Mr. Speaker, I want the Honourable Minister to understand, you know, we are not here trying to win debating points. A MEMBER: Oh no?

MR. SPIVAK: Yes, Mr. Speaker. The Honourable Minister is smiling. --(Interjection) -- No, I'm not, no. Mr. Speaker, I want the Honourable Minister to indicate that I have already said that some of the statements he's made is false. I don• t see him jumping, Mr. Speaker, I don't see him rising right now. I don't see him saying that what I'm saying is not true. But I'm saying that what he said was not true, and I'm saying, Mr. Speaker, that what he is trying to do --(applause)-- Mr. Speaker, I want to put the question to him, Mr.

Speaker, and I want him to understand very directly that he has a responsibility to answer questions in the House, if he so decides to answer, in a correct manner, in a correct manner. And, Mr. Speaker, I suggest that his answers have not been correct and have been misleading. Mr. Speaker, we'll continue. MR. USKIW: Will the honourable member permit a question?

March 12, 1974 1309 MATTER OF GRIEVANCE MR . SPIV AK: Later. Mr. Speaker, yesterday the Honourable Minister read 36 ques[ions out and 36 answers and I think that I should be allowed to compl ete my presentation, and, Mr. Speaker, at the end --(Inte rjection)-- Yeah, and at the end, Mr. Speaker, I•ll be prepared to submit to questions and to answer them to the best of my ability. Mr.

Speaker, "I wonder" and this was the question that the Minister put, "I wonder if the Minister can indicate whether he has received a report of a me eting held on September 1st, 1973 between the office of the Freshwater Fish Marketing Board, the Department of Indian Affairs, the Department of Co -operative Development dealing with charges and accusations of mismanagement, incompetence in connection with the operation of the Southern Indian Lake Co- operative?" The answer to that is, •'Yes, " Mr. Speaker, but three days before he said, "No, Mr. Speaker, I didn•t receive any report".

He said, "I didn' t receive a report three days" - now he says, "yes" . Okay. "Many meet ings took place on the matters of mana ge ment, finance production and these are ongoing in nature and are not singled out." Mr. Speaker, I want to refer to his answer, and it was on page 1131 of Hansard when he said: "No, Mr. Speaker, " this is his first time, "I don•t believe that I received any official report from anyone because no one was commission ed to bring a report to me ." -- (Interjection)- Yes, but no one ever asked him whether he received any official report.

The word "official" was never used, that was his word. That wasn•t the word used in the opposition side , and what he •s basical ly trying to do i.S try to skirt around answering the question properly. But then, Mr. Speaker, when the min utes of the me eting were produced and the Minister was caught with the fact that the information he supplied was not accurate he then changed his answer. Mr. Speaker, the answers given three days afterwards are different and irreconcilable. The answer preceding that was referred to by me on March 7th ••. MR. SPEAKE R: The Honourable Minister state his matter of privilege . MR .

USKIW : Well the Honourable Leader of the Opposition is suggesting, Mr. Speaker, that I have misin formed the House, and I should like the honourable member to review the way in which he put the questwn s originally and now the way in which he is putting those questions together and relating them to the House. MR. SPEAKER: The Honourable Leader of the Opposition. MR. SPIV AK: Mr. Speaker, I will now put the question and I will put the first answer and I think I can deal with the second answer as well. Okay.

The question: "I wonder if the Minister can indicate whether he has received a report of a me eting held on September 1st between the officers of the Freshwater Fish Marketing Board, the Department of Indian Affairs, the Departmen t of Co-operative Development dealing with charges and accusations of mismanagement, incompetence in connection with the operation of the Southern Indian Lake fishing co-operative?" The first answer, Mr. Speaker: "No, Mr.

Speaker, I don•t believe that I received any official report from anyone because no one was commission ed to bring a report to me ." The second answer three days later, the answer to this is: "Yes, many meeting s take place on the matters of manageme nt, finance production and these are ongoing in nature and are not singled out. " And, Mr. Speaker, I want to point out this only occurred after the min utes of the meetin g were made public. Is he really trying to seriously say that on March 7th he knew nothing of the matter? MR. SPEAKER : The Honourable Minister. MR . USKIW: Mr.

Speaker, on a point of privilege, the honourable member stated that I had indicated that I had no knowledge of the issues raised. My answer was that the depart ment had not drawn to my attention any such report or finding. That•s quite a difference, Mr. Cha irman. MR . SPIVAK: I wonder, Mr. Speaker, on the questwn of privilege , whether he•s prepared to say that Mr. Kalinowsky in dealing with the question of his demotion did not bring the contents of that meetin g to his attention? MR. SPEAKER: Order please. I•m afraid that we're getting into a crossed debate and I can•t allow that.

The honourable member has a grievance, he can carry on with his grievance . MR . SPIV AK: Mr. Speaker, now I•ll deal with the next question. "I wonder if he can indicate whether any officials of his department brought to his attention allegations that advances that were forwarded to one fishing co-operative were solicited fraudulently by members of his own departme nt?" The answer, Mr. Speaker: "Yes, by way of a copy of a

131C March 12, 1974 MATTER OF GRIEVANCE (MR. SPIVAK cont •d) . . . • . letter from an empl oyee of the department denying the accusation. " 2. "l am now told that no money was ever obtained fraudulently as advanced from th.e Freshwater Fish Marketing Cor poration. Every time money was advanced to a co-operative the reasons for the request for the advance was explained to the Freshwater Fish Marketing Corporation in detail. At no time was money advanced used for other purposes than the purpose for which it was requested." Mr.

Speaker, this has already been dealt with and I would suggest that the only way that this can be effectively dealt with would be to have the people under oath before a judicial inquiry answer this question. Because , Mr. Speaker, I think that if this happened, that the information that is given would indicate that the answer that was given on March 7th should not have been given in the form it was by the Minister. The next question: "1 direct a question to the Minister of Agriculture regarding the Department of Co-operat ive Development.

Is it true that the Department of Co-o perative Development is certifying financial statements from fishing co-ops but it is impossibl e to reconstruct any of the accounts." Answ er: "The Department does prepare and certify statements based on information provided by the co-operatives. Deficiencies in accounting records are reconstructed during audit and recorded according to accepted principles of accounting." Now, Mr, Speaker, I will deal with this .

The Minister's answer states and implies that. there is an arms length relationship between his officials and from the fishing co-operatives which I suggest that they have been responsible for creating . In response , Mr. Speaker, I want to table a memora ndum , dated July 19 73, and this is the only copy I have and I would hope that the Clerk will be in a position to make a copy for the Minister as well as to leave for the record.o f the House and for myself . It•s signed by the Deputy Minister, Mr.

Speaker, and it basically assigns the staff personnel to the various manager ial and directional functions in the co-ops itself. Mr. Speaker, a Judicial Inquiry will reveal that these officers had signing authority that in many cases neither the members nor the regular directors had any idea, and I•m now referring to the fishing co-ops, had any idea of the nature of the detail of the trans actions managed and controlled by the officers of the department .

To say therefore the depart ment prepared and certified statements based on information provided by the corporation is correct, but it' s mi sleading because the personnel doing the providing and certifying were one and the same . (Hear, Hear) Mr. Speaker, another question that was referred to: "I ask specifically whether he is not supervising the accounts and certifying the financial statements in the case of Southern Indian Lake." "N o, Mr. Speaker, the accounts are supervised by local management of Southern Indian Lake." Mr.

Speaker, as I•ve indicated, the department is trying desperately now to put the records of Southern Indian Lake together. They ea nnot find source docume nts, they are in one helluva mess. The fact is, Mr. Speaker, although the Minister in his state ment says , and Iq uote: "Financial statements for 1973 , audited by a CA firm." That is not true. The next statement for April 1974 not prepared and not due. Financial statement for the period ending April .. . 1973 was audited by a CA firm, and I suggest to you, Mr.

Speaker, that the only statement they have is a statement that was prepared in which I' ve released for an 11-month period for March by his department which was used for DREE to be able to try and get the rema ining DREE funds. And, Mr. Speaker, I challenge the Minister to produce the audited statements produced by his department. Mr. Speaker, the next question is: "I have a que,:;tion of the Honourable Minister of Agriculture.

I wonder can the Minister indicate to the House how many of the loans guaranteed by his department for fishing co-ops , the banks and credit unions are now in arrears." Answer: "Of a total of 20 loan guarantees totalling $1, 632, 900 outstanding as of the date March 8/ 74 , three are in arrears - Ilford Co-operative in the amount of 5, 000, the other two are not fishing co-operatives; one is Crane River Feed Lot and the other is the Interlake Pulpwood Co-operative - a total of nine loans guaranteed to fishing co-ops for an amoun t of $1, 124, 90 0.0 0." Mr.

Speaker, I•m prepared to accept tentatively that the Minister' s statemen ts accurately reflect the present situation but I would ask one further question: Has there been any re negotiation, financial renegotiation with respect to the loans that were owing and the arrears that were owing by the co-operatives, and if so what are the particulars for us to understand the full extent of the financial obligations owing and the arrears that really are in existence?

March 12, 1974 131 1 MATTER OF GRIEVANCE (MR . SPIV AK cont•

d) Mr . Speaker, I now deal with an issue which is significant and one which will involve two questions and a rather lengthy answe r, and it deals with the question of the cost, the illusive cost of Southern Indian Lake and the co-operative . Mr . Speaker, the first question: "My question is to the Minister of Co-operative Development.

I would like to ask the Minister if the management services and supervision provided by his department to the Southern Indian Lake Co-operative included the draw ing up of the contracts and the tender specifications for the building of Southern Indian Lake Co-operative ." The answer: "The department gave ass istance in preparation of tenders and specification and contracts as per reque st from the Board of Directors of Southern Indian Lake Co-operatives .

Consulting firms and Federal Department of Fisheries approved specifications and designs ." Now another question which was asked by the Honourable Member for Birtle-Russell was as follows: "When the Minister is taking that as notice will he also take as notice the question of whether the tenders if any were called came to his department and if so how many bids were received and if there wer e any could he indicate what the tender price was for the construction of the Southern Indian Lake Co-op ?" The answer: "Yes, tenders were called for the main fish plant building, tenders came in as follows" - and I• m now repeating his answers, 11A .K.

Penner and Sons - $268 , 000; Peter Leitch Constructi on - $268, 000; Malcolm Construction $268 , 000; B. F. Klassen Construction Limited - $264, 292; F. W. Sawat zky - $257, 864 ; Baert Construction - $359,0 00 ." The above tender prices did not include refrigeration and mechanical. The Engineers Unies Limited had estimated refrigeration and mechanical to have cost approxi mately $250, 000. Had the co-operative awarded a contract to one of the tendering companies the final cost of the total project would have been 1. 3 million as has been suggested in the House .

It must be remembered that over and above the main plant building with refrigeration and mechanical the following was also acquired or constructe d. Dry goods warehous e, heated grocery warehous e, repair shop and dining hall , all for a cost of $388, 960.0 0. This contract was awarded to Perma Structures Limited of Winnipeg after all other tenders were refused and so advised by letter of September 3, 1971. All of the above was done after consulting with the Board of Directors , the Federa l Fisheries and DREE .

At that point there were other major expenditures necess ary to bring the total project loss into the operating complex. These were not part of the original tenders and not part of the contract with Per ma Structures Limited.

These consist of the following, all of which were approved by the Board of Directors of the Co-op and DREE as well as the Federal Fisheries, the Clean Environment Commission and the Department of Health, land site preparation, creek diversion, plant and office furniture and supplies, docks and conveyors , petroleum distribution plant, freight boats , two refrigerated trucks, one half ton truck; truck van for transport ing employees from plant to town; communication equipment, power lines, lot and house boat for manager in lieu of a car to inspect station. The final cost of the total project, Mr .

Speake r, in the Hon ourable Minister of Co-operative Development's words , was $786, 272. 00. As a result of refus ing the original tenders , as a result of the department acting as project man on behalf of the co-op, seeking the lowest prices through negotiation with contractors , the total project was considerably less than the one million dollars , a saving of several hundred thousand dollars . Mr . Speake r, the es timates and the cost figures given by the Minister are misleading and completely incorrect . Mr .

Speaker, there is material on file within the department if exami ned by the Judicial Inquiry , which would indicate the following, Mr . Speaker, and I 'm going to indicate to the Minister what his own files will show . First it would show , Mr . Speaker, that the cost of 1. 3 million would have resulted had the original bid - 1. 3 million would have resulted had the original bid of $257, 000 been accepted.

In fact the renegotiated price of $388, 000 although including some additional out buildings did not include some basic provisions such as site preparation, docks and mechanical equipment included in the original estimates . The department has rejected bids and in renegotiation neglected these items and the Minister neglected to mention this .

1312 March 12, 19 74 MATTE R OF GRIEVANC E (MRo SI:'IVAK cont'd) .... Mr. ·s peaker , I want to if I may deal with the original Estimates that the department had, the renegotiated price that it arri ved at and I want to indicate on the basis of what the Minister said would be the cost and suggest to you, Mr. Speaker , that there is $ 200 , 000 missing, and I'm going to suggest as well, Mr.

Speaker , that in total there is some $6 00, 000 that have not been and is not accounted for on the basis of the information supplied to the House and only a Judicial Inquiry is going to be in a position to be able to determine this. Mr. Speaker , in dea ling with this I have to ask the Minister why he reject ed the pro jective cost of $3 50, 000 to $400, 000 in 1971 and replaced the plant facility with three more out buildings but less site preparation and site services req uired for proper operations, but cost s0me $388 , 000 plus dock. Mr.

Speaker , I think I'l l deal with this in a different manner , I think it would be better to do it this way. Mr. Speaker , I want to go through if I can the original estimates , the prices that were renegotiated , the extras that occurred and a figure, and ind oing this I would simply indicate that I'm talking about site work, main plant, refrigeratio n, process equipment , miscellaneous, fuel storage, net shed, bank house, re sidence, floats , warehouse, repair shop , dining hall, office furniture , docks, conveyor , freight boats , trucks, half ton van, radios , power line and manager 's boat.

That' s all the items that he referred to. Mr. Speaker , the original estimate was $3 51 , 400 ; the renegotiated figure by the Minister was $ 388 , 960. 00. There were extras because of the renegotiation becau se these matter s were not included and should have been, of $92, 000. 00. Mr. Speaker , I'm allowing for all intents and purposes another $1 00, 000 to cover office furnishings, a conveyor and frelght boat and trucks and radios which were not really part of that contract. Mr.

Speaker , the information I would have would suggest that had it been added to the original estimate it would have been $443, 000. 00. Even with the renegotiated estimates to Pe rma Structures it was $580, 000 , yet the project is reported to have cost $7 86, 000; and I'm going to prove in a few moments, Mr. Speaker , that it cost $1, 200 , 000. 00. And , Mr. Speaker , I want to point out that this was based on an original estimate of $2 00, 000 , the original forecast was $2 00, 000; and, Mr.

Speaker , even if the Department chose the most expensive and least satisfactory means of constructing the basic facilities, there are reports of inadequate services and waste treatment facilities, how can he explain an expenditure of an additional S: 300, 000 on a few furnishings and boats ? Mr. Speaker , the Minister has already reported that there is an $80 0, 000 loan to Southern Indian Lake guaranteed by the government. There was a grant received from DREE of $4 24, 000. 00 . Mr. Speaker ,i f you take the loan of $ 8>)0 ,0 00 and the grant from DREE , you have $1 , 224 , 000. 00. I want to now repeat , Mr.

Speaker , what I' ve said. A facility which was estimated by the department to cost about $ 200 , 000, could have been constructed for $44 3, 000 , was apparently pro vided for $581, 000 , but the Minister reported a total cost of $786, 000, yet by a combination of the loan guar anteed by the government of $8 00 , 000 and the grant of DREE of $4 24, 000 , it cost $1, 300 , 000. 00. A MEMBER: Unbelievable. MR. SPIVAK: Mr. Speaker , the final figure of $1, 300 , 000 was reported to the Depart ment of Indian Affair s and to DR EE and I would like to table with the Clerk a letter from Mr . W. C.

Thomas who I believe is with the Department of Indian Affairs, a letter to the Pre sident of the Southern Indian Lake Co-op. This is the only copy I have and I would ask that copies be made for the Minister , for myself and left in the records of the House, in which he states and I quote - and the Leader of the Liberal Party - in which he states , "You have a 1. 2 million dollar packaging plant, including building and freez ing and holding service s" , and this was dated August 7, 1973. Mr.

Speaker , I'm not going to suggest that the honourable members opposite are going to be in a position to digest all the information and I'm suggesting that a judicial inquiry would; but I want to make this point and make it very clear. There is on the basis of this information, Mr. Speaker , some 500 to 600 thousand dollars that is missing, that is not accounted for. Mr. Speaker , that five or six hundred thousand dollarG was either put in in additional co sts that the Minister is not aware of, because he stated that it would only cost $780, 000 , and, Mr.

Speaker , is borne of the fact that the co-operative has a loan of $8 00 , 000 from a credit union guaranteed by the bank, and without question there was documentation to prove that $42 4 ,0 00 was given by DREE. Mr . Speaker , withoutquestion aJ udicial lnquiry is needed.

March 12, 1974 MATTER OF GRIEVANCE A MEMBER: To find the missing $600, 000. 00. MR. SPIVAK: Mr. Speaker, the next question . MR. SPEAKER: Order please. 1313 MR. SPIVAK: "Mr. Speaker, can the Minister confirm that the loans when obtained from the Freshwater Fish Marketing Co mmission by his own department were used for direct benefits for the fishermen and as a result , resulted in shortage of adequate cash flow for effective operations of the fisheries complex?" Answer: "All advances made by the Freshwater Fish Marketing Corpo ration are made to co-operatives and not to the department .

These advances are made to enable co-operatives to assist fishermen getting started at the beginning of the season. " Mr. Speaker , as with other answers, this one is based on a completely fictional separation between the department and the co-operatives. Mr. Speaker -- well the honourable minister can grunt, Mr. Speaker, but those are really the facts. "Mr. Speaker, I direct a further question to the Mini ster in charge of Co-operative Development. Can he indicate whether he is aware of any trust liabilities certified by the Department of Co-operative Development that are not now available for payment ?" Mr.

Speaker , and I put the question, "is the honourable member referring to the same co-operative that he alluded to a few moments ago", and the Member for Riel replied , "I am in this case referring to the Ilford Co- operative". Mr. Speaker , the answer: "I lford Co-operative has trust liabilities set out in its records of $1 0, 000, 000 - 10, 078. 36. No money is available at present to retire these liabilities. These are trust liabilities:• "The Department has at no time assumed responsibility for the liabilities of this co- operative. " Tha t may be true, Mr.

Speaker , in the sense of what he is suggesting but the Department had power of attorney, and if the Department has power of attorney I don't know how they're not assuming responsibility for the liabilities, And I'v e already indicated that in the Ilford statement that has been filed as of October, the trust liabilities are$ 25,0 00 and not $1 0, 000. "Mr. Speaker , I direct a question to the Minister of Agriculture in charge of Co- opera tive Developmen t.

Is it true that the Fish Co-ops at Southern Indian Lake were paying fisher m en 13 cents per pound instead of 17 cents per pound, which indicated that the co-operatives were shortchanging fishermen in order to pay for debts caused by mismanagement? Answer: Co- operative board of directors set prices to fishermen at lakeside based on posted FFMC Winnipeg price less expenses. The department exercises no control. The Co-op was paying 13cents for medium white fish which was later adjusted by directors to 17 cents. F FMC establishes fish prices f. o. b. Transcona, less freight from local pla nt.

Co-o p has to charge freight from lakeside stations to main plant. The Co- op also has to deduct from fish prices the cost of operating the lakeside station as this is not covered in the FFMC agency fee structure. " Mr. Speaker, in answer to this question the Minister admits that the Southern Indian Lake Co-o p was paying 13 cents instead of 17 cents. He then offers an excuse, an excuse rejected by the FFMC in the Minutes of September lst meeting , an excuse involving freight rates on lakeside stations.

Following rejection of this excuse , the price was raised, but no restitution was made for the long period preceding in which the lower price was being made. Mr. Speaker , the Minister has effectively substantiated the charge of theft that has been made. Mr. Speaker, I must tell the Honourable Deputy House Leader that these charges will stand the test of a Judicial Inquiry and the problem at this point, is that the honourable mem bers opposite are not going to be prepared for a judicial inquiry, and l' ll tell you why. Because they are afraid of this, very much afraid of this. MR. SPEAKER: Order please.

MR, SPIV AK: Mr. Speaker , I now would like to refer to another question put and answered by the Minister. "I wonder if the Minister could inform the House why Powers of Attorney of the Board of Directors were taken by his development officers to be able to run the co- operatives? " Answer: · " Powers of Attorney were never taken to run co-operatives.

They were taken at the request of the directors in some co- operatives to assist them with negotiations in areas of transportation agreemen ts, federal assistance programs, remo te locations of co- operatives, lack of telephone and other communication system s, which pre sented problems in deal ing with the outside world. The department assisted in a few instances through the Power of Attorney Agreement. I'm also advised, Mr. Speaker, that the facility

1314 March 12, 197 4 MATTE R OF GRIEVANCE (MR. SPIVAK cont'd) . . . . of operation has been used, I'm told away back, dating to 1964 by the same department even when it was a branch of the Department of Agriculture and that is not a new procedure. " Well surely, Mr. Speaker, in identifying the wide range of powers given by the power of attorney, can it be any lo nger pretended that the co-ops were free private agents. By his own admission his offices had power to buy, to sell , to solicit trust funds, to write cheques, to sign prommisory notes, in fact, power to conduct any business of the co-operatives.

They had in fact, the power to do all those things that it has been alleged were done improperly by them. Mr. Speaker , I believe that I have documented a case that cannot be refuted by the Minister, that basically indicates that the information given by him in answer to a series of questions were mislea ding; that further indicate at this point, if the government is not prepared for a Judicial Inquiry, comp licity in all owing the mismanagement and incompetence and potential theft from fishermen to have continued. Mr.

Speaker, the allegations of theft were not made by myself , they were made by the Chairman of the Freshwater Fish Marketing Corp oration. A MEMBER: To whom? MR. SPIVAK: To the Deputy Minister, to the Deputy Minister. Mr. Speaker, they were made to the Deputy Minister. Mr. Speaker ... MR. SPEAKER: Order pl ease. Order please. MR. SPIVAK: Mr. Speaker, I want to, if I may, just refer for a few moments to the Minutes of the meeting and to the statement alleged to have been made by Peter Moss. --( Interjection)-- Well I wooder, did the Deputy make it to Peter Moss?

I mean, if there was a meeting between Peter Moss and the Deputy and some individuals , did the Deputy then make these alle gations to Peter Moss or did Peter Moss make them to the Deputy? Mr. Speaker, all I'm doing is reading from the minutes of the meeting and I have not heard the Minister say that these minutes are not an accurate

summary of what took pl ace. A MEMBER: Let's have an inquiry. Let's have an inquiry. MR. SPIVAK: Mr. Speaker, I wonder if robbing the fishermen up north is a stupid alle gation? I wonder, Mr.

Speaker , if alle gations of robbing the people up north, or the fishermen up north who I suggest are completely unsophisticated and not able to deal with this , who in fact, have pl aced themselves in the hands of the member s of the department of Co- operative De velopment, is really an allegation, is really an alle gation that should be brushed off by an arrogant governme nt and by an arrogant grour; of ministers who believe that there's no such thing, or can be no such thing as wrongdoing by any of the officials and who are pre pared to cover this matter up, and who were aware , Mr.

Speaker, of the allegations and charges that have been mad e and were not prepared to act. Mr. Speaker, there was an election in 1973 and, Mr. Speaker, they didn't give a damn about ... (Applause\ Mr. Speaker, I look at the Minister of Northern Affairs, I look at the Minister of Northern Affairs, Mr. Speaker, I look at the Minister of No rthern Affairs and ask with his 300 people, 45 of whom were on contract, going up to the north and travelling into the com muniti es, that at one point they did not find or hear information of com plaints from fishermen of what was taking place.

His answers have indicated that he did nothing, they were not brought to his attention. His answers were that he was prepared to ignore them, Mr. Speaker. MR. SPEAKER: The Honourable Minister of No rthern Affairs. MR. McBRYDE: His answer was -- the member I guess was supposedly quoting from me -- that I never heard of any problems with Co-o ps in the north. Mr. Chairman , I said that there were problems with some Co-o peratives in the north. The thing that I said I didn't know anything about was the gutter accusations of fraud, that the gutter politicians opposite are making . MR. SPIV AK: Mr.

Speaker, the Minister or the memb ers of his department did not hear information from the fishermen complaining about the money being received, about the lack of financial information. Mr. Speaker there are documents that already, not been tabled in the House and released by mys elf which indicate that a meeting of the department officials , the department officials now, of the Department of Co-o perative Developmen t: they dealt with the complaints of the fishermen at Southern Indian Lake who basically said that they rece ived no financial statement nor monthly account. Mr.

Speaker, you know one question has to be asked, you know, at what point and how much has to be proved to convince the government that it is time that they started investigating those people who they themselves have relied on for the inforrmtion that' s been suwlied.

March 12 , 1974 1315 MATTER OF GRIEVANC E (MR. SPIVAK cont'

d) Mr. Speaker , the financial transactions that I referred to are a maze which we in the House will not penetrate. The Honourable Minister of Co-operative Development is not a guy to be trusted , certain matter s are clear. It will be noted that many of the Minister's answers are qualified - and I want to point this out Mr. Speaker , that many of his answers were qualified by the words "My officials advise me. " Mr. Speaker , given many of the allegations involve the Minister 's officials , he re ally is suggesting that they should be looked to for an independent accounting of what took place.

Before an inquiry their te stimony would be rele vant and impor tant, but to take it as the sole basis of their own defense , Mr. Speaker , is a procedure that is both incomprehensible and unacceptable. First the Gove rnment of Manitoba loaned $800, 000 or guar anteed $8 00 , 000 to the Southern Indian Lake Co-op. We have the Minister 's statement on that. Second, DREE advance $42 4, 000, that' s public information, The total is not less than $1 , 224, 000 and maybe more.

The Minister says the plant, the buildings, the trucks, the other buildings, the boats - in fact, all of the real as sets required cost them $786, 000. 00. Where is the balanc e, Mr . Speaker - some $60 0, 000. 00. And, Mr. Speaker , I ask the Minister , where are the record s? Where are the record s? Where are the records ? Where is this certified external account by auditors that I suggest does not exist, and where are the records, Mr. Speaker. In addition we have recorded minutes, and I'm referrin g to the minutes of September 1st, containing charges of fraud and theft. We have no documentation, Mr.

Speaker , which show that these allegations have been dealt wi�hby the Department and all we .have is an indication that it was satisfactory in the words of the Minister , but I suggest , Mr. Speaker , that based on the words of the Minister some of his answer s are incorrect , mislea ding and cannot be trusted , Mr. Speaker , with res pect to the question of the cost of the Southern Indian Lake Co-op, I know the consultants advised against the proj ect management, that they later recommended that the project be stopped. Mr.

Spea ker , this is only one of several reports of mismanagement, bungling and a waste of mater ials. This is a most serious matter , Mr. Speaker. A MEMBER: An election was on and the seat had to be won. MR. SPIVAK: What' s involved is breach of trust , false statements by the Minister , misleading statements by the Minister, allegations of theft, allegations of loss of records, and absence of audit. I am making an allegation right now that their records have been lost and they cannot be rec onstructed. And I'm also, Mr. Speaker , saying that there are absence of audits. Mr.

Spe aker , it brings to mind an earlier case in Manitoba called Pa tton and Cox. Mr. Spe aker , that so-called Bran don Pa ckers Ca se, and I want the member s to reflect on the outcome of that case, and I want to ask them to keep in mind that no civil serva nts and no members of the Executive Council were involved in that case. Mr.

Speaker , I charge that in the case of the Southern Indian Lake Co-op, there is a prima fa cie case at this point, of a breach of trust, and there is a prima facie case that the civil servants have in fact misman aged and have in fact misrepre sented information that has been supplied to this House. Mr . Speaker , I demand and the Prog ressive Conservative Pa rty demands, a Judicial Inquiry of all the events. I demand, Mr. Speaker, the prose cution of any of those who may have in fact been involved in any criminal activity. And further , Mr .

Speaker , and I think more important - and I say this directly to the members opposite because I have a feeling that in all of this they have ignored one basic' trust they have and one basic obligation they have -- I demand, Mr.

Spe aker , that a review be made by Judicial Inquiry so that it can be determined whether any fishermen have in fact been cheated , short- changed or gypped as a res ult of the actions of the officialH of the Department of Co-operative Deve lopment; and I demand that there be given an undertaking by the government that there be full re stitution to the fishermen involved so that the government can discharge an obligation that there is an onus on their part with res pect to the management of the fishing co-operatives and to their involvement. MRo USKIW: Mr.

Speaker , I wonder if it can be permitted that I ask the honourable member a question without exhausting my right to speak on the subject matter ? Would the honourable member , the Le ader of the Opposition, not agree that if there was any substance to any allegation, as he alleges, that indeed a letter should have come from someone making the allegation and that some court proceedings should have been undertaken by that individual. And the fact of the matter is, Mr. Speaker , and the honourable member

131 6 March 12, 1974 MATTER OF GRI EVANC E (MR. USKIW cont' d) .... knows it, that no such event took place , and I'm wondering why he is not prepare d to ta ble in this House the allegation made by whoever is making it so that we would know what the honourable member is talking about. Now I would sugge st to the Honour· able Leader of the Opposition he owes the House an explanation. MR. SPIVAK: Mr.

Speaker , for the re cord , I tabled the minutes of the meeting of September 1st, 1973 , dealing with a number of allegations that have been made, by Peter Moss , Chairman of the Fresh water Fish Marketing Corporation, and I want to partic ularly indicate , and if I can, No. 15 , advances given to the Southern Indian Lake Co-op were solicited fraud ulently by V. Hryshko and W. Kalinowsky, who I believe are senior officials of the department and I believe Mr. Kalinowsky was demoted after this, And the same were not used in fishery but to pay capital cost of construction. Mr. Speaker ... MR .

SP EAKER: Order , please. I wish the honourable member s that have to shout would leave the Chamber. I am trying to hear what is being said and it's· almost impossible. Now those people that want to be childish should not be here. The Honourable Le ader of the Opposition, MR. SPIV AK: Mr. Speaker , I want to also refer to Item 11 where it said three cent camp deductions were not ju stified.

They were opposed by fishermen and not in accordance with the Fre shwater Fish Marketing Corporation pric ing policy, and I'v e alre ady point out that as soon as this meeting was over the government immediately changed the procedures and the fishermen then did get the additional amount of money. Mr. Spe aker, I could go on. These charges are damning against the government.

They warr anted an investigation, they warran ted action which the Minister obviously was not prepared to do, and to that extent I question the complicity of the Minister in not recognizing that what was re ally being charged in this, aside from mi smanagement and incompetence, was that innocent fishermen, in the main native, unsophisticated , who do not understand , you know, the techniques or the accounting procedur es , do not understand the maintenance of records and the way in which they are kept, who do not understand the way in which banking procedures are followed , but who were putting their faith and trust in the Department of Co operation Development officer s, may have been put in jeopardy and may very well have been gypped, shortchanged and robbed , as suggested further on in these minutes.

And by the way , Mr. Speaker , for the record, these minutes refer to stealing--I haven't got the exact clause but I ca n, if the individuals want to, if members opposite want me to find it--but ref er to stealing, and I use the words "stea ling from fishermen. " It 's in these minute s. --(lnterj ection)- MR. SPEAKER: The Honourable Minister of Finance. MR . CHERNIACK: Mr . Speaker , would the honourable member agree to a que stion?

Would he indicate whether he has , during his lengthy discourse today, himself alleged that members of the Cabinet have been aware of these charges that he has made, and if so are they his allegations or somebody he's prepared to name and quote ? MR . SPIVAK: Mr. Speaker , the allegations of the Cabinet being involved were made by the media, not by myself, and those allegations were made, Mr. Speaker , as a matter of fact were made I believe on Fr iday night on television and were referred to in the pres s, and I must say, Mr.

Speaker , that if those allegations are true , I believe that action has to be undertaken and I believe that . . . MR. CHERNIACK: Can you name them? MR. SPIVAK: Well , Mr. Speaker , I would like the government to be in a position to stand up a:nd say that those allegations were untrue. MR. CHERNIACK: Would you name the ... MR. SPIVAK: No , I think that I would re fer the honourable member to the newspaper s, and I would refer him to -- I'm sure there can be a re-broadc ast made of the television state ments made. Well , Mr. Speaker, I must suggest, Mr.

Speaker , that I think if the allegations that have been made are fairly seriou s, and I think that if there is nothing to be concerned about, that the honourable members opposite better at least reply in kind. MR . CHERNIACK: You won't name them ? MR. SPIVAK: Well , Mr. Speaker , I don't think that I have to name them. I'm simply saying that I know the Honourable Minister of Finance, with his usual ingenuity, is quite able to look at the new spaper s of a few days back and to read them. I' m sure that he can be able to

March 12, 1974 1317 MATTER OF GRIEVA NCE (MR. SPIVAK cont'

d) comprehend that, and he can also call for a re-broa dcast of the television broad cast and any radio br oadcast that he wants. He has that ability and he has certainly people within his department to do it. And I think after examining that , he will then know that the allegations were in fact made by member s of the press. MR . CHERNIACK: But you don't know. A MEMBER: Look it up. MR. SP EAKER: The Honourable Member for Thompson. MR. KEN DILLEN (Thompson): Would the Member for River Heights yield to a question? He will? I didn't get an affirmative ... Yes.

When these allegations were brou ght to your attention, I understand that this has just been in the last couple of months, did you question Mr. Mo ss as to why he didn't take the necessa ry action to bring this to the attention of the courts? MR. SPEAKER: The Honourable Le ader of the Opposition. MR. SPIV AK:

Document details

Collection	Manitoba — Debates (Hansard)
Citation	30-1-49
Type	hansard
Volume / chapter	30th 1st hansardpdf 49.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	68b18bf38eac9eaffdad647528b972b1f2ddd461

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