l ISSN 0542-5492 Third Session - Thirty-Second Legislature of the Legislative Assembly of Manitoba DEBATES and PROCEEDINGS 33 Elizabeth 11 Published under the authority of The Honourable D. James Walding Speaker VOL. XXXII No. 368 - 8:00 p.m., TUESDAY, 5 JUNE, 1984. Printed by the Off;ce of me Queens Printer, Province of Manitoba

MANITOBA LEGISLATIVE ASSEMBLY Thirty-Second Legislature Members, Constituencies and Political Affiliation Name ADAM, Hon. A.R. (Pete) ANSTETT, Hon. Andy ASHTON, Sieve BANM�N, Robert (Bob) BLAKE, David R. (Dave) BROWN, Arnold BUCKLASCHUK, Hon. John M. CARROLL, Q.C., Henry N. CORRIN, Q.C., Brian COWAN, Hon. Jay DESJARDINS, Hon. Laurent DODICK, Doreen DOERN, Ru•aell DOLIN, Hon. Mary Beth DOWNEY, Jame• E. DRIEDGER, Albert ENNS,Harry EVANS, Hon. Leonard S. EYLER,Phil FILMON, Gary FOX, Peter GOURLAY, D.M. (Doug) GRAHAM, Harry HAMMOND, Gerrie HARAPIAK, Harry M. HARPER, Elijah HEMPHILL, Hon.

Maureen HYDE, Lloyd JOHNSTON, J. Frank KOSTYRA, Hon. Eugene KOVNATS, Abe LECUYER, Hon. Gerard LYON, Q.C., Hon. Sterling MACKLING, Q.C., Hon. AI MALINOWSKI, Donald M. MANNESS, Clayton McKENZIE, J. Wally MERCIER, Q.C., G.W.J. (Gerry) NORDMA N, Rurik (Ric) OLESON, Charlotte ORCHARD, Donald PAWLEY, Q.C., Hon. Howard R. PARASIUK, Hon. Wil.an PENNER, Q.C., Hon. Roland PHILLIPS, Myrna A. PLOHMAN, Hon. John RANSOM, A. Brian SANTOS, Conrad SCHROEDER, Hon. Vie scon; Don SHERMAN, L.R. (Bud) SMITH, Hon. Muriel STEEN, Warren STORIE, Hon. Jerry T. URUSKI, Hon. Bill USKI� Hon. Samuel WALDING, Hon. D. Jame• Con stituency Ste.

Rose Spring field Thompson La Verendrye Minnedosa Rhineland Gimli Brandon West Ellice Churchill St. Boniface Aiel Elmwood Kildonan Arthur Emerson Lakeside Brandon East River East Tuxedo Concordia Swan River Vir den Kirkfield Park The Pas Rupertsland Logan Portage la Prairie Sturgeon Creek Seven Oaks Niakwa Radisson Charleswood St. James St. Johns Morris Roblin- Russell St. Norbert Assiniboia Gladstone Pembina Selkirk Transcona Fort Rouge Wolseley Dauphin Turtle Mountain Burrows Rossmere lnks ter Fort Garry Os borne River Heights Flin Flon lnt erlake Lac du Bonnet St.

Vital Party NDP NDP NDP PC PC PC NDP IND NDP NDP NDP NDP IND NDP PC PC PC NDP NDP PC NDP PC PC PC NDP NDP NDP PC PC NDP PC NDP PC NDP NDP PC PC PC PC PC PC NDP NDP NDP NDP NDP PC NDP NDP NDP PC NDP PC NDP NDP NDP NDP

LEGISLATIVE ASSEMBLY OF MAi'.IITOBA Tuesday, 5 June, 1984. Time - 8:00 p.m. CONCURRENT COMMITTEES OF SUPPLY SUPPLY - BUSINESS DEVELOPMENT AND TOURISM MR. CHAIRMAN, C. Santos: Committee, please come to order. This

section of the committee of supply shall be dealing with the Estima tes of the Department of Business Development and Tourism. We shall begin by requesting the Minister to give his opening statement. Mr. Minister. HON. S. USKIW: Mr. Chairman, I just want to make mention of the fact that there will be copies of the text made available in a few moments for those of you that might be interested. The preparation and presentation of department Estimates is always a demanding process, yet it is one which is vital to the health and long-term planning of any organization.

In the case of the Department of Busine ss Development and Tourism, this has proven especially true during the'84-85 Estimates process. Change has been and continues to be the keynote theme of the Department of Business Development and Tourism. The implementation of government reorganization which followed the division of the former Department ef Economic Development and Tourism in the formation of the sister departments of Industry Trade and Technology and Business Development and Tourism has had a major impact on the Estimates process.

At a time when small business, within the province, continues to be confronted with a tough economic and business-climate, the fiscal limitations of the government itself has resulted in an Estimates process which is unp recedented in recent years for the extent of evaluation and program assessment that has been undertaken.

Ho wever , despite the cutbacks, restraints and reorganization and harsh evaluation of departmental programs, we are confident that our Estimates package can provide a solid base from which our Business Development and Tourism branches can take advantage of the changing economy and build for the future.

Operational agreements: it was agreed between the new departments of Business Development and Tourism and Industry Trade and Technology that Economic Development and Tourism's Finance and Administration Branch would remain a branch of Industry Trade and Technolo gy, but would serve both departm ents; Economic Development and Tourism's Communic ation Branch would be split; Economic Development and Tourism's Strategic Planning Division would be split to give Business Deve lopment and Tourism the nucleus of a separate policy and planning branch; some detailed arrangements were made in respect of transfer of the Design Branch and the Manitoba Design Institute to Business Development and Tourism; transfer of the Venture Capital Corporation staff funds to Business Development and Tourism; closure of small Human Resources Branch; and rearrangement of specialized computer support staff.

The attached Estimates represent the balanced result from a process which has invo lved a variety of conflicting variables and circumstances. Firstly, for the past five years the resource allocation and program delivery capability of the Small Business Development Division was enha nced by the Canada-Manitoba Industrial Development Agreement - i.e., Enterprise Manitoba. Approxima tely one-half of all staff resources and two-thirds of program dollars were provided to this cost-shared agreement.

Termination of that $44 million agreement had a major impact on the actual Estimates process, as well as the level of program funding which is requested.' At a time when small business within the province continues to be confronted with a tough economic and business climate, the fiscal limitations of the government itself has resulted in an Estimates process which is unpr ecedented in recent years for the extent of evaluation and program assessment which has been undertaken.

The attached Estimates reflect a package of program initiatives, which on one hand are lean as a result of thorough scrutiny they have received, and on the other hand are suitable to provide the stimulus and support Manitoba requires to take advantage of the economic upturn which is predicted for 1984. lt is my expectation that the resources requested in these Estimates submission will provide support to Manitoba businesses, which will result in the realization of many new and existing opportunities.

These opportunities will provide for new employment for Man itobans and reinforce the government's commitment to making job creation its No. 1 priority. Before exam inin g one of the major eco nomic indicators, the make-up of the Manitoba economy merits several remarks. The vast majority of Manitoba businesses are small. To be specific, 30,000 or 90 percent of the 33,500 businesses in Manitoba have less than 20 employees. These busin esses employ approxi mately 80,000 people.

In terms of job creation, at least 70 percent of new employment in the private sector is attributed to firms with less than 20 employees, while firms with more than 100 employees, have actually experienced a net employment decline particularly over the last two years. During the prolong and severe recession, Manitoba small businesses were hard hit. The rate of business formation decline and the rate of business bankruptcy increased. The latter-point bankruptcies which in 19 80 had almost doubled from 90 in 1979, increased by 59 percent in 1981 and by 50 percent in 1982.

The trend peaked in the province in the second quarter of 1982 while it continued to worsen in all other 1612

Tuesday, 5 June, 118t provinces except Quebec and Ontario in 1983. During the recession, interest and inflation rates were at unprecedented high levels. Although these rates have declined signi ficantly, the real interest rate remains at a historically high level, that is the actual rate less inflation. The economic downturn has left many Manitoba busine sses In a weakened fina ncial position characterized by depleted inventories, high debt ratios, reduced equity and liquidity ratios, and at the same time as revenue growth has declined, an overall profitability has suffered.

Coupl ed with these economic factors are many of the factors which his torically have characterized Manitoba's small busi ness sector. These include inadequate management skills and technology base, trade barriers and a limited market size and market access. Manitoba businesses have also historically experienced a difficulty in attract ing adequate equity or risk capital. Despite the severe hardship of the recession, Manitoba's small business sector remains qu ite diversified.

This diversification has allowed us to cope with the recession more so than in other provinces, which have relied upon resource industries or large­ scale manufacturing. We also have been fortunate in having a stable labour force which has a wide range of skills and adaptabilit y. Another strength of our busi ness sector deals with the fact that businesses which have survived this severe recession have come out of these difficult times more com petitive and more aware of the effective management principles than ever before. By necessity, they h.ave had to cut costs and capitalize on opportunities.

The hard lessons these businesses have had to learn will serve them well as the economy turns around. During this critical period, as the economy continues its fragile recovery, it is crucial that the Department of Business Development continue to play an active and supportive role to Manitoba's business sector. Reference has already been made to the fact that the department has undergone a vigorous zero-base budgetary process. This process and the budgetary constraints impo sed upon it have resulted in an estima ted package, which Is almost 200,000 lower than that approved under Enterprise Manitoba last year.

Despite this, however, the Small Busin ess and Regional Development Division has retained the best of a program which it has taken over eight years to develop, implement and refine. Even with the budgetary cutbacks, it has retained the corps of professionals and support staff which it has taken several years to recruit, train and develop. A program component which has been developed maximizes the levtJrage of federal initiative programs to assist private sector operators develop opportunities and create employment.

As my presentation will shortly elaborate upon programs and services of the Sm all Busi ness and Reg ional Development Division are complementary and integ rated to ensure effective deployment of staff and resources. The approach that has been developed has been well-received by Manitoba's busi ness sector, despite the worst economic hardships in a half-a­ century.

The functional activities of the Small Business and Regional Development Division fall into the following areas: Small business development consists of a comprehensive set of activities designed to encourage entrepreneurship, assist in planning and establishing new businesses or expanding existing operations and in improving management capabilities. The program has been developed as a total resource or one-stop program orientation.

The major activities include entrepreneurial Identification and development, provision of busi ness informa tion, management counselling, cost-shared feasibi lity studies, assistance in business planning, business development including financial sourcing and the analysis of critical situations. These major program initi atives guide potential entrepreneurs through five stages of development: individual readiness, stimulation phase, business planning phase, financing phase which includes the go or no-go decision-making setup or formulation and second-stage expansion.

Existing Manitoba businesses are assisted largely through one consultant. The consulting to small business may involve any one of the following phases: General busi ness Information and assistance business expansion may involve feasibility and product development, second or thir d stage financi ng. Performance im provement involves a range of ccr..,ulting activity and accounting and financ e, inf ormation systems, assessing performance and productivity and making recommendations for improvement.

The crisis support, this phase may involve financial restructuring, identifying new markets or assisting firms In bankruptcy situations. The requested level of staffing and program funding will provide program components which have had a signi ficant impact on the Manitoba small busi ness community over the last few years. Some of the major outputs in the'82 to'84 period include busi ness information, with a response to 15,000 requests for busi ness in formation, management counse lling, consulting services provided to over 2,000 clients and firms.

Business development, advanced factory space and crisis support assisted in the creation of over 1,000 new jobs an1 the saving of more than 200 jobs. The mandate of the Small Business and Regional Development division means that the division inte racts with and has a potential client base which includes the vast majority of Manitoba businesses. In fact, contact with staff of the small business

section of the Provincial Government is the main source of interaction some small business have with the Provincial Government. For example, the Report on Small Business is sent to 30,000 individuals and small businesses throughout the province. This publication is a communication tool which the province utilizes to articulate policies and programs applicable to small business within the province. Through fiscal 19 84-85, the regional offices In Brandon and Dauphin will continue to play a pivotal ro: in assisting small busi ness firms to capitalize upon the economic upturn.

Rural clients will continue to be .... rovlded assistance through these regional offices and increased support will be provided to special need clients, cultural industries and communi ty and regional groups. Several new bold initiatives, complementary to the overall thrust of the Small Business and Regional Development division, will be funded through the Jobs Fu nd. For example, addi tional resou rces will be provided in 1984-85 for management development to 1613

'J'Ue.cley, 5 June, 1114 upgrade the management skills of busine ss operators in the province. The Jobs Fund will also be providing resources to encourage entrepreneurship among Manitoba's youth. To be more specific, a three-part program will be developed to apprise young Manitobans of employment opportuni ties in small business and to provide them with a hand s-on assistance to take advantage of potential opportunities. My department will also be announcing a new initiative funded through the Jobs Fund to facilitate employee ownersh ip.

This initiative will include an Employee Owners hip Management Development Program that will be utilized to assist prospective and current employee owners in the development of management skills required to operate successful businesses. No. 2 -Regional and Community Development: This program component assists communities in rural and Northern Manitoba to identify and facilitate economic development opportunities. Staff in teract with community and regional development corporations and other local interest groups.

Assistance is also provided to commun ities In accessing the Main Street Manitoba Program, analyzing and planning commu nity business projects and business impr ovement assistance to special needs groups. In the fiscal year'84-85, the government will continue to fund and provide support of assistance to the Regional Development Corporations operative through rural and Northern Manitoba. However, it is anticipated that this will be a year of evaluation and restructuring of the ADC Program.

An extensive review of the ROCs was completed in the fiscal year'83-84. lt is our intention to follow up on many of the recommendations for change that were made in that review. Through the Jobs Fund there will be a continuation of the Commercial Planning and Development Program, funding under Enterprise Manitoba for five years. This program assists rural and Northern communities assess commercial opportunities through the assembly and analysis of trading area information, problem and opportunity identification, and project planning in commercial design.

In addition to incorporating the major features of the former program, the new program will expand the mandate to include a tourist perspective and reduce the population size restrictions which limited the number of communities which would participate under the former program. The Jobs Fund will also provide an opportunity for the Regional Community Development Branch to work with residents of remote commu nities to identify and facilitate economic development opportunities. For fiscal'84-85 two economic development officers will be hired to perform this function.

The Jobs Fund will also be uti lized to work more closely with community development comm issions functioning in cities, towns and muni cipalities in rural and Northern Manitoba. lt is proposed that a communi ty development officer will be hired on a contract basis to provide advice and assist ind ustrial commissions, community development corporations and economic development committee of municipal councils. No. 3 -Financial Programs: Includes administration of three major small busine ss support programs. (

a) The Ven ture Capital Program was implemented in March, 1983, for a one-year period, because despite the recent improvements in the econo my, many Mani toba businesses are still experiencing financial problems resulting from an inaoequcne or deteriorated equity base. The program was instituted because there · was a gap in Venture Capital financing for Manitoba, based upon the limited amount of activity by some of the known sources of equity capital.

The Venture Capital Program that has been operative has generated enough int"'·��· •11"1� � significant new funding increase will be provided through the Jobs Fund for fiscal'84-85. Four million dollars will be available for Venture Capital and may enlarge to as much as $35 million over the next five years. In addition to the increased funding, several important changes will be made to thA VenturE! Capital Corporation Program. The revised format will combine the best features of the existing program with components of programs of other provinces where the Venture Capital concept has been implemented. (

b) The Interest Rate Relief Program has provided financial assistance to nearly 700 busine sses which employ approximately 2,400 Mani tobans. In 1984-85 this program will continue to provide second-year assistance to qualifying businesses. lt will also retain the management counselling improvement component which has been provided to businesses receiving assistance. A combination of financial assistance with management improvement has assisted In limiting the failure of businesses participating In the program to less than 6 percent. (

c) The Core Area Small Business Assistance Program is a component of the Tri-Level Core Area Ini tiative Agreement. Two staff consultants have been seconded to this program to assist in admini stering an incentives program for Inner City businesses, as well as to provide on-site busi ness mana gement counselling. Eligible busi nesses may qualify for incentive grants of a maximum of $25,000.00.

In fiscal year 1984-85, $800,000 has been allocated for business Incentives. lt is Important to note that the Estimates provide for only partial adminis trative costs of these financial programs, while the actual funding is provided through separate provisions. of The Loans Act. In summ ary, Manitob a's business community has experienced difficult times over the last several years. My department has undergone a rigorous Estimate's process, which meant that hard decisions had to be made.

Out of this process has come a ration alized lean base of services and programs which have the potential to assist Manitoba's business sector, take full advantage of the recovery which is now in progress. In addition, the initiatives which will be provided through the Jobs Fund will enha nce and expand the delivery capability of our Small Business and Regional Development division.

I'm confident these initia tives will play a crucial role in assisting our province's business commun ity, maximize opportunities and create new jobs, not only for the next several years, but also as we prepare to meet the challenges which await us in the 1990s. The next part of our department has to do with Tourism, Travel Manitoba. Tourism provides a stable growth component of our economy, an environmentally clean engine for economic development, a primary source of employment that has been very important 1614

1'uNdq 5 June, 1184 for youth and for women, and an important economic base In regions and commun ities which have limited other economic development alternatives. Tourism receipts impact at the retail and consumer level in areas such as accommodations, food and beverage purchases retail and service purchases. The linkages of these labour-int ensive sectors to the wholesale production and primary economic sectors are strong. As a result the economic impact of tourism receipts Is high. For each $1 In spending, 80 cents in provincial income is created.

This compares to 37 cents in grain production. lt's a very Interest ing comparison. Direct job years is created for every $28,000 in spending. Despite the impact of the economic recession, the tourism industry is showing some signs of a renewed positive growth. Travel Manitoba 19 83 performance: Manitoba was host to 2.4 million non-resident visitors In 1983. An additional 4.5 million trips were made by by Manitobans within the province. The massive volume of travel generated $592 million in travel-related expenditur es of which $225 million were received from non-residents.

Tourism activity began to im prove late In 1983. There was good growth in some markets. Ind ustry and provincial actions aimed at the package bus tour market appears to be paying off with United States bus traffic showing growth of 13 percent in 198 3 compared to the previous years. Summer months saw increases of 40 to 50 percent in bus traffic as visitors were attracted in growing numb ers to festivals such Folklarama. Speclalty sports angling market also remained strong in 1983 posting 3 percent growth in non-resident anglers and nearly 4 percent in resident anglers' activity.

Despite the good performance of these specially travel mar kets, overall tou rism activity remained constrained in Canada. Our total United States visitors declined by 9.3 percent and the num bers of trips to Manitoba by residents and other Canadians were down 5.3 percent from 1982 levels. Projections and major events: As the economies of Canada and the United States continue their forecasted improvements through 19 84, we expect that tourism activity will also post an improved level of performance · generally.

Our provincial tourism programming has been strengthened in anticipation of the Improved market environment. We are targeting for a growth of 3 percent in total travel activity to Manitoba for the current year. The target is exclusive of the very large numb ers of visitors expected to be generated by the Royal Visit in July and by the Papal Visit later in Septem ber. Target marketing strategy: The tourism marketing program for 1984 is targeted to obtain growth from all five of our prim ary travel market&.

We are seeking a 6.6 percent rate of increase in United States markets with emphasis being placed in the Min nesota and North Dakota region and with strengthened activity in the secondary use. markets further south. Within Canada, our principal efforts are being directed towards the resident market for travel and to the neig hb ouring Province of Saskatchewan and to Northwest Ontario. We will also continue to promote to the specially markets in the more distant Canadian regions.

Co-op advertising thrust: lt is clear that most can be gained in tourism marketing If government and private sector activities are planned and implemented in a complementary mann er. As a result during 1984, emphasis Is being placed In co-operative, promotional activities directly with the Manitoba Toursim industry on a 60 percent industry, 40 percent government participation basis. Some $83,300 has been allocated to this co-operative iniative. Travel Manitoba is conducting a provincial tourism advertising campaign, but for this year additional co­ operative campaigns are planned.

We will be actively seeking Industry partners for joint advertising activities. In addition, we have increased our co-operative efforts with neighbouring jurisdictions and work is being undertaken jointly with Saskatchewan, Alberta, the Northwest Territories and Tourism Canada directed towards the outdoor travel market that is so Im portant to this region of Canada. A futher aspect of this co-operative thrust add resses both the need to obtain as much market Impact as possible within our resources as well as provide a new opportunity for joint government and private sector activit y.

Beginning this year we will be seeking private sector advertisers for our major tou rism public ations. Appr opria te busines o::es will be able to purchase advertising space in the 1985 Vacation Guide and In the 1985 Fishing Guide. While this is a departure for Manitoba, paid advertising is seen in more and more government-published travel literature. Tour market development: Based on the excellent results being achieved in the bus tour market, Travel Manitoba will be expanding the group tour promotion activity.

We will be consolidating work in the nearby primary markets and we'll be expanding into new areas farther to the south in the United States. We will be undertaking work with travel wholesalers, tour operators and agents in the southwest U.S. and in Texas in particular. This market has shown good growth potential for Manitoba and has for a numb er· of years been a target for a commercial sports angling industry. Intr oduction of toll-free phone calls: Through our tourism promotion and advertising activities, a very large number of inquiries for more information are generated from prospective visitors.

In recent years people seeking information have been encouraged to telephone and a collect-call number has been widely publicized. The response to this technique has been sufficient to justify the provision of a toll-free telephone service which will be offered this year for the first time both in Canada and primary markets to the south. Teledon System information computer on line: In order to facilitate the provision of up-to-date and comp lete inf ormation to custo mers, we are also up grading our travel information system.

The inf0rmation base is being computerized to allow more Pf11Cient handling and to permit future access directly 1y remote computer terminals at information centres oy the travel trade and eventually by home computer devices. In the short term, we will achieve efficiencies in our own use of staff resources through this new system . Over the longer term, we will greatly increase consumer accessi bility to information on Manitoba's travel products and services. During the course of this sum mer, we will be pilot testing the application of the Teledon System in 1615

'IUiMiay, 5 June, 18M distributing tourism information. Termina ls will be set up at a numb er of information centres operated by the province as well as in locations provided by co-operating organizations. Federal-Provincia l Ag reement: The Federal­ Provincial Tourism Agreement has been the department's major instrument for the development of tourism over the past five years.

Over the course of this agreement, the six programs have significan tly benefited tourism in Manitoba from upgraded research and plan ning activity to new marketing thrusts, to the development of major new attractions and accommodation facilities. As was ann ounced in November of last year, the federal-provincial agreement for tourism and development is being extended for a further year. The original agreement was due to terminate on March 31st of this year. The extension has set that date ahead to March 31st of 1985.

As a part of the extension negotiations, there has also been a shift in the programming offered under this accord. During the extension year, funds have been set aside for the planning and preparation of a subsequent tourism agreement between the two levels of government. lt is expected that a proposal for this new agreement will be ready for review later this fiscal year. The Winnip eg Destination Area Attraction Development Program will function within its existing parameters.

The program has already assisted the development of the Western Canadian Aviation Museum, the Fort Gibraltar reconstruction and the upgrading of the Prairie Dog Central Excursion train. The full $3.5 million allocated to this program will be committed this year and it is anticipated some new and very exciting tourism attractions will result within Winni peg. The Rural Destination Areas Attractions Program has been extended with reallocated funds. The program has been extremely successful since it was started in July of 1982, and a large number of new and improved facilities are under way.

As an example, I can cite the Ukrainian Folk Arts Centre and Museum in Dauphin, designed to be the new home of the National Ukrainian Festival; the upgrading of the In ternational Peace Garden; the improvements to the Gimli harbourfront park; the new Stonewall Quarry Park; the new facilities in Flin Flon, The Pas, Snow Lake and many other areas have benefited from this program. To date, a total of $5.6 million in assistance has been committed in support of $14 million worth of capital development of attractions in rural destinations.

The Attractions Marketing Program, over the five years, has provided marketing assistance to almost all of Manitoba's major attractions and events and has served to enhance the provincial and regional strength in this area. A total of 150 grants have been made to the various events and attractions over the five years of this program. Under this program, five specific in itiatives will be funded during the extension year of the agreement. The marketability of our cultural, sports .and heritage resources will be improved through the development and packaging of a major new summer festival in Manitoba.

The new computerized travel information system will be developed and imple mented. The new and improved tourism attractions that have been assisted by the agreement will be agressively marketed and promoted to give the'm a strong profile in the market during the early years. Special long-term · program planning and development in itiatives aimed at improving major key events will be un dertaken. Stronger federal-provincial and ind ustry promotional activities will be undertaken as a part of our new co­ operative program.

Tourism ind ustry suppo rt: The tourism industry organization program will be continued during the extension year and will provide funding for the preparation of a Tourism Awareness Program to be delivered by the ind ustry association and for development of specific man power training programs that will meet requirements identified in the recently completed Hospitality Indus try and Manpower Needs study. This program has served to strengthen the various tourism indu stry associations over the past five years.

The Tourism Ind ustry Association of Man itoba has benefited with improved regional programming and a stronger membership. The Manitoba Hotel Association has new and improved man power training programs, our Ma nitoba Restaurant and Foods Services Association has been developed, and a new association of organiz ers of festivals and events has been formed. This program has assisted in the organization of the Manit oba Lodges and Outfitters Association and has assisted projects of the Man itoba Farm Vacations Association.

The sixth program under the agreement, Rural Tourism Ind ustry Incentives Program, is also being conti nued. The program provides low-cost loan assistance to private sector accommodation and attractions developments in rural Manitoba. We will be targeting this assistance more selectively to the destination areas and specialty market facilities, and have placed a greater priority on new developments.

In view of the new federal Indus trial and Regional Development Program, which also provides assistance to these sectors of tourism, and the general response to this program to date, fewer funds were ·required than were origina lly allocated within the agreement. So far, from the two years that this program has operated, a total of $3.4 million in loan assistance has helped $12.2 million worth of capital development of private sector accommod ations and attractions. it is expected that the full 5.1 million allocated to this program will be commit ted during this fiscal year.

These six development agreement programs are expected to commit a total of $8.5 mill ion to tourism development in Manitoba during this fiscal year. With the new activities and co-operative marketing, our improved Visitor Information Services, and with the new development in itiatives I have sum marized, new revenues, incomes and jobs will be created for Manitoba business and for Manitoba residents both in the current year and over the long term. Tourism is Manitoba's fourth largest earner of export revenues and is one of the. province's economic sectors with excellent long-run potenti al.

We believe that the new program thrust I have outlined will assist in real izing this potential. Mr. Chairman, I will be pleased to review in greater detail the various components of departmental 1616

. programs during the Estimates Committee process. Thank you very kindly. MR. CHAIRMAN: Thank you, Mr. Minister. Pursuant with past practice in this committee, the Chair now invites the leading opposition critic to give his reply if he so desires. MR. W. STEEN: Mr. Chairman, I thank the Minister for his very lengthy and what I hope is a very complete report. I was just commenting across the table to the Minister of Finance that this document is almost the same length as the Budget Address that we had a few weeks back.

I would like to comment on it briefly and say that the Min ister did make mention of the fact that his department, the Department of Business Development and Tourism, is a new department and, the Mini ster will recall from his earlier days In the Legislature, what used to be called Industry and Com merce and then, as time went on, it became Economic Development, and so on. has really been broken down Into three areas now: Business Devel opment and Tourism, Industry Trade and Technology , and the Manitoba Jobs Fund.

By breaking the old Ind ustry and Comm erce Department into three sections, hopefully, Manitobans will be better served as a result of this and, hopfully, they won't be confused and have difficulty in finding out which department and which Min ister they should go to for their needs and so on. In the Minister's Estimates, besides the administration area, there are the two areas, the business development and the tourism aspects which he covered in some detail with his opening statement.

I would like to comment on some of the problem areas that I see, such as taxation in Manitoba making Manitoba in some cases somewhat non-comp etitive with other provinces. The Minister made comment about the depressed business climate in Manitoba and that he was of the opinion that there was a turnaround scene and that things could get better. One of the areas that he remarked on was the fact that 90 percent of the businesses in Manitoba have less than 20 employees.

The Mini ster of Finance, in his Budget Address earlier this year, did look after the very very small business proprietors and business persons by taking off the payroll tax for those very very small businesses. The payroll tax, in my opinion, Mr. Chairman, to the Min ister, is still a tax that is the penalty for business persons for hiring new persons, for creating job expansion within their businesses.

Whether it be a business that has $50,000 a year in payroll, or less, is some help; but I think that if we were able to someday remove that payroll tax so that 90 percent of the businesses, the ones that the Mini ster referred to that have 20 persons or less, would not have to pay this tax because it is not a tax that encourages business expansion and new employment. Other areas that were mentioned in the Minist er's address was the gove rn ment holding back on expenditures.

The Provincial Government of Manitoba, the last two years, did have increased expansion in expenditur es this year that they have tried to hold the line, and it does make it more difficult for the Business Development and Tourism Department to expand and to assist busine sses if government monies are being restricted. He talks of the tourism aspect. One area in Manitoba in tourism, that the Manitoba Hotel Association people often refer to, is the price of liquor in Manitoba being exceptionally expensive, �articularly when they are trying to attract American visitors to Manitoba.

The restaurant prices for liquor, or the Liquor Commi ssion prices for liquor in Manitoba are exceptionally expensive, and one often wonders when Manitoba or when Canada particularly has today, our Canadian dollar worth some 77.85 cents versus American, why Canadians aren't able to attract more American visitors to Canada. I know that thi s problem doesn't just exist in Manitoba. lt is nation-wide.

In fact, the Government of Canada published a report recently that said that we have a deficit In tourist travel in Canada, where we have more Canadians going elsewhere for vacations than we have non-Canadians coming into Canada. One of the persons said one time, well that's because of our cold climate up In Canada, and that's why Canadians leave. But it's a fact in Canada that in the month of July, there are 'Tlore Canadians leaving Canada than there are visitors coming into Canada, with Canadians particularly taking trips abroad and visiting Europe and so on.

He mentions Interest Rate Relief Program in his statement. This is certainly a program that is welcomed by business people. I particularly would encourage government to enter into an interest relief program, rather than having government buy out businesses. If we can have the businessman go to the commercial banks to do his borrowing, and the government might help that businessman with some of his high interest rates and keep him in business, to me this is the preferred route to go, rather than having government buy into his business and so on.

One thing that the Mini ster did not make any comment about was the Racing Commission. The Leader of the Opposition today and a week ago asked about the Horse Racing Com mission's Annual Report.

We haven't seen this report for this year. lt is obvious that the Racing Com mission is in some degree of difficulty, and even though the fiscal year has been changed, I have always been of the belief that if you're going to go away from one fiscal year end to another one, and that fiscal year is going to be extended beyond 12 months, that there should be an interim report to make up the difference for the months between 12 months and the greater period. The Minister mentioned that two persons from his department are going to be working with the core area in Winn ipeg . To me, this is welcome news.

As a reoresentative of a Winnipeg constitu ency, I am of the b<..1ief that we have had this downtown Core Area Program in place now since the Con servatives were in office. We have been basically doing most of the administration work in regard to this, and we are seeing few results. Hopefully, over the next two years, we're going to see come concrete results in the downtown area, over and above the opening up of the Stephen Juba Park, which was officially opened today in the downtown area. I have been Into cities in North America where they have really done a marvellous job of rest oring their 1617

TuMday, 5 June, 1984 downtown area. One city that is very close to Winnipeg is Duluth, Minnesota. They have done a tremendous job in the downtown area of Duluth in restoring their area and getting people to come back into the downtown area to do their business. Hopefully, the Minister with two staff persons working with this area, that we will see results as a result of that. The Mini ster also made mention of job creation and venture capital programs, and naturally, the Government of Canada and the Manitoba agreement. One other area that he mentioned was the diversification of business in Manitoba.

We, as Manitobans, are very fortunate that we are not like some of our sister provinces, and we have the great peaks and valleys, like the Province of Alberta has, with their boom years and then, all of a sudden things aren't quite so rosy in the Province of Alb erta. They have what you might refer to as their partial bust years. In the better than 100 years that the Province of Manitoba has been in existence, we have shown that we are a diversified province, and we have been able to avoid these great peaks and valleys. So, Mr.

Chairman, with those few comments, my colleagues and I will press further for different answers from the Minister, in relation to his department and the various aspects of his Spending Estimates. My first question would be to him, has he any news to report to the committee regarding the Annual Report of the Racing Commission? If he hasn't got a report available, can he give us any indication as to when he will have one? Can he also give us an indication, further to my Leader's question of a week ago, about a reported change in the make-up of th e Hor se Racing Commission? Thank you, Mr. Chairman. MR.

CHAIRMAN: Before the Chair asks the Min ister to reply, I would like to make it clear that we are deferring Item No. 1. (a), relating to the Minister's Salary, to be the last item to be taken into consideration by this committee of supply. Since the staff members have already taken their respective places, I'll say no more about it. The committee will commence its proceedings with this opportunity for the Minister to make a reply to the critic's remark. HON. S. USKIW: Yes, Mr. Chairman, I thought it was proceeding in an unusual manner, in that we are into the specifics of the various sections of the Estimates.

But with respect to those couple of points, if it's in order to respond to them, I would like to suggest to the Member for River Heights that we have had ample debate with respect to Manitoba's relative position to other provinces on the taxation question. When you size it all up, Manitoba's position is quite competitive, even including what he considers to be the most object ionable, namely, the health and education levy. So there is no point in going through that again. I think we have had that debate in the Budget and in a numb er of other areas, and we'll leave it at that..

There is a concern on our part, with respect to another point tha t the mem ber raises, and that is the competitiv eness of our tourist industry to that of other areas and, in particular, the United States. Liquor pricing, of course, is one area that stands out. There is no question that a number of things are more expensive north of the uo ... .it�• ii ••m they are south of the border. Our department is doing some evaluation and study of that, to determine whether or not we would be in a position to make specific recommendations down the road.

At the moment, we don't want to take a definitive position, because those studies are not complete. But we recognize that may be an area of softness on our part that we should be addressing, and we will be reporting on our findings somewhat later. With respect to the Annual Report of the Manitoba Horse Racing Commission, I had checked into it further this afternoon, pursuant to the questions in the House, and I was advised that this decision was made and debated in the Legislature about a year ago.

The Auditor at that time suggested that the transition of 15 months would be reasonable with respect to the next Annual Report. In other words, he did not recommend an interim or initial three-month report after the end of the then fiscal year. So it's based on opinions and decisions that were made some one year ago, that we are now operating under. We're talking about history right now, so I have no further comment to make on that. MR. CHAIRMAN: I'd like to call Item 1. HON. S. USKIW: Mr. Chairman, I'm not finished. MR. CHAIRMAN: Mr. Minister. HON. S.

USKIW: Just to give the member an idea of where the report is at, the report has been audited and we are now in a position where we hope to be in a position to table that document fairly soon. When I say "soon," I would expect in the next week or 10 days. That's where it's at. it's gone through an audit, which it must do before it's finalized, so that's as close as we are to the tabling of the report which would be in keeping with the statutory provisions which require that the report be tabled within three months of the end of its fiscal year, which is now March 31s t.

With respect to changes in the Horse Racing Commis sion itself, I did indicate a week ago that we have been looking at the whole industry for a good number of months now, certainly since I came on the scene as Min ister in charge.

There's quite an extensive review under way with respect to not only the operations of the Commission but the question of whether current regulations are adequate for current circumstances, whether we are giving due recognition to the fact that we do have to respect a private entrepreneur who has an investment there and somewhat perhaps greater respect, if you like, than in a bankruptcy situation which we just came through where government had to be on top of, most intensiv ely, if you like, for a long period of time. lt's with that point of view in mind that the review is under way, a matter of how to protect the public interest, which is a regulatory function; public interest in the sense that we don't want the wrong people to get involved into the betting business, if you like, in Manitoba; and at the same time recognizing the legitima te rights of private Investors who are part of our industry. 1618

1\leaday, 5 June, 1884 So without wanting to be too onerous on that component and we will have a new, hopeful ly, position to state in a very short period of time which may - well, not only may, will likely - result in some changes in the membership on the Commission as well.

I say that not out of disrespect for members who are there, but, you know, we have the history to live with and that is that the Commis sion was attempting to apply a very firm rule based on a very tough situation that they had to deal with as a result of the bankru ptcy that occurred there. lt may be that rule might be a bit harsh for the entrepreneur who is there now and who has a lot of experience and indeed respect within the commu nity.

That is all under review and it may be possible that for the benefit of all Manitobans that we should put some new faces together to give it a healthy, new start, and to build the image of the industry as a major tourist promoter for Manitoba. So it's with those positive ideas that we are making some changes, not by way of reflection on anyone that's been there or is there. MR. CHAIRMAN: Proceeding, I'd like to call Item 1. (b)( 1) Executive Support: Salaries; 1. (b)

(2) Other Expenditures - the Member for River Heights. MR. W. STEEN: On 1. (b)( 1) Salaries, there's a major increase in expenditures here. Obviously it's an increase in the department size. Can the Mini�ter tell us the numbers of persons that this budgetary item is for and what are the general duties of these persons? HON. S. USKIW: We, of course, have a new department and there in itself lies the answer.

We have a Deputy Minister, which is an additional person; we have a Deputy Minister's secretary, which is an additional person; an executive assistant to myself and a special assistant to myself, so that's two additional people; and Other Expenditures of $36,000, so it's an addition of about $18 3,000 within our department that is involved here. MR. W. STEEN: Mr.

Chairman, when you look at last year's expenditure of $45,500, was that an Assistant Deputy Minister's salary that was a carry-over from another department or like an Assistant Deputy Minister, say, of Tourism that would have been in the old Economic Development that carried in with his new department? HON. S. USKIW: lt's obviously reflecting the staffing arrangement and reporting relationship that existed in the larger department at that time. MR. CHAIRMAN: 1. (b)( 1)-p ass; 1. (b)(2)-p ass. 1. (c)( 1) Strategic Planning: Salaries; 1. (c)

(2) Other Expenditures - the Member for River Heights. MR. W. STEEN: 1. (c)( 1), Mr. Chairman, we have a reduction in this area and yet in the Minister's wide­ ranging, opening statement he talked about a numb er of areas that his department was handling and a number of areas that they were serving the public, and yet the Strategic Planning aspect of his department is reduced from last year, even though salaries are increasing for individuals. Has there been a transfer from Planning in the Business Deve lopment area to another department? Is that why we have a smaller reduction here? HON. S. USKIW: Mr.

Chai rman, this reflects the agreement on the split that took place when we broke off this part of the department from the larger one. lt's not a great differential and I'm advised that there was also an extra pay period involved last year. MR. CHAIRMAN: The Mem ber for Sturgeon Creek. MR. F. JOHNSTON: Mr.

Chairman, the Strategic Planning, I'd ask the Minister, really, is up when you take into consideration the Strategic Planning of the Department of Industry and Technology, because when they have split the two the total is increased in Strategic Planning basically within the business or industry area of the Province of Manitoba. The Strategic Planning within the department was, last year, in the area of - or the Estimates last year for Strategic Planning was $249,600, and certainly when they did the split in the department it is fairly obvious what's happened.

But the overall Strategic Planning within the government has grown by leaps and bounds, but this one Is down, so I would ask - (Interjection) - I won't pay attention to chirping, Mr. Chairman. Anyway, this has grown by leaps and bounds and it's down, but there is a concern of it being down in this department.

Have we lost the researchers that we had within the department that used to do research for the small business people and the business people from the point of view of assisting them and the bases of expansion, assisting them to decide whether it was viable, all of these would be put forward from the small business or from the planning department that I believe used to be under Finance and Administration which has disappeared now? So is all of the assistance and research, as far as small business is concerned, taken from this department? HON. S.

USKIW: As I understand it, I think the member is asking whether or not there's been any diminution of research capacity where it involves support services to the private sector. lt's my information that there has not been a reduction, but there is a relationship between the various departments that provide for all of the services that were there before. This particular item shows a $3,000 difference from the year before in this department. I can't account for what's taken place in the other departments, but it's my understanding that there's no reduction of service in this area. MR. F.

JOHNSTON: How many people are involved in res• 1rch as far as support to small business is COI"�erned, I specifically say the tremendous work that th£ y do to help businesses decide whether it's viable or not to expand or viable to start a new business? Those particular stats as to availability of workforce, all of the inf ormation th at has to be taken into consideration in costs, what the opposition is within the area, that type of information which used to be done by the statisticians, is it still available? HON. S. USKIW: Yes, we have three people involved, Mr. Chairman, and we have shared-services 1619

1'ueadar. 5 June, 1984 arrangements with the Department of IT& T, so there is some overlapping between the two departments and co-operation if you like. MR. F. JOHNSTON: Thank you. MR. CHAIRMAN: 1. (c)(1) - the Mem ber for Emerson. MR. A. DRIEDGER: Just a matter of clarification here. We have a new department that has been established here, a break-up from a bigger department. There seems to be some confusion in the business community as to which Ministers are responsible for what. I wonder if the Min ister could clarify as to the jurisdiction that he has.

I believe the confusion that exists right now in many busine ss peoples' minds is as to who is the Min ister now responsible for the area that they are involved with. I'll use the example of Superior Bus in Morris, for example. Who is the Mini ster that would be responsible for a busi ness of that nature? The Member for Morris is here, he can probably pursue that a little further, but I'm using that as an example.

I wonder if the Minis ter could give us an indication as to which department covers what because right now the busi ness public of Manitoba does not know who is what and who is where with the new department having been establis hed. We've covered this report here and we have the Jobs Fund included and I don't know whether this has been done on purpose to try and fudge the issue, the services that are being provided, or whether this - (Interjection) - Wh at I'm asking you for, Mr.

Ch airman, is a clarification as to the responsibili ties of the various departments that are involved in Small Business and Economic Development. Right now it's a matter of pass the buck, because if somebody comes at this min istry he passes it on to the next one or he says he doesn't know where it's at. The public of Manitoba I think have a right to know exactly as to the responsibility of the various departments involved in Small Business and Economic Development, and I wonder if the Minister could maybe elaborate on that. HON. S. USKI W: Well, Mr.

Chairman, we haven't run into any difficulties that we could . . . MR. A. DRIEDGER: That is because the public doesn't know where they're at. HON. S. USKIW: . . . cite but there is an overlapping situation and th ere always will be. The various components, the three different departments that have been created, will try to relate to each other and even overlap in some instances. Essentially, as a the rule of thumb, Manit oba-owned businesses will relate to the Business Development and Tourism Department.

The Industry, Trade and Technology Department is essentially what it suggests it is. lt's the major industrial sector, the Imperial Oils and the lncos, and where it involves international ownership and internat ional trade and major technology, that's essentially a. rule of thumb that one should follow. MR. A. DRIEDGER: The government has spent a lot of money advertising all kinds of programs, etc. Is there some way that we can provide the busi ness communi ty with the information that they require in terms of who is responsible for what?

The Min ister has explained to us here, but many of the business people when they ask for advice or want to make contact - myself, as an elected member - have difficulty finding out where it's at, and that is what I'd like to establish here today. I wonder if there's a way that this process can be handled. HON. S. USKI W: Well, Mr. Chairman, first of all, I want to say that we've had no difficulty in explaining this to the business community with whom we met. MR. A. DRIEDGER: They can't find you. HON. S.

USKIW: Well, we have met with all of the representatives of the busi ness commun ity over the last several months and have had very meaningful discussions with those groups, and in the final analysis the way in which the departments function, and in particular this department, is that if a potential client of any of the departments enters our doorstep that particular person's needs are assessed and they are channelled in the right direction In any event. So we can readily receive all clients through our system and give them the proper direction if they do not properly belong within the confines of our program.

So that Is not a problem; it in fact gives the business communi ty three doors to go through rather than one. MR. A. DRIEDGER: How do they know which one to go through? HON. S. USKIW: Either one will get them there. MR. A. DRIEDGER: Is that right? Fine. Then I'd want to pursue it a little further. Can the Minister indicate whether under Strategic Planning for small business in the area of Manitoba, are there any directives or programs available to small businesses right now? Is th ere some ma jor thr t�st that this government is forwarding In terms of small businesses for development, for job creation? MR.

CHAIRMAN: The member is talking about Small Business, that's Item 2.(

a) which we haven't called yet. MR. A. DRIEDGER: Mr. Chairman, it's under Strategic Planning here and that's the area that I want to pursue. Is there Strategic Planning? HON. S. US KIW: Mr. Chairman, I think what's happening here is the Member for Emerson is confusing a planning capacity for the department with the planning needs of the private sector. Actually what he should be talking about when he talks about private sector is the area of involvement in the Small Business and Regional Development component of the Estimates.

Essentially, the plann ing . mechanism here that we're talking about is for departmental planning and thrust for the province as a whole as a department. MR. A. DRIEDGER: Oka y, we'll leave that then and wait until we get to that portion there. 1620

Tuesday, 5 June, 1884 MR. CHAIRMAN: That's better. MR. A. DRIEDGER: I think I understood that correction, Mr. Chairman. Under Strategic Planning, to what extent is this department involved in the Jobs Fund? The Minis ter in his open in g statement made reference to the involvement in the Jobs Fund allocations. Could the Min ister maybe elaborate as to the involvement in the Jobs Fund? Would that be, Mr. Chairman, in the right category? HON. S. USKIW: Mr. Chairman, there is perhaps a problem that we are now entering into. The Jobs Fund Estimates are listed separately in the Estimates book.

That is the time that we will be dealing with those items in a meticulous way. We have alluded to the fact tha t there are components within this department that are funded by the Jobs Fund, but every Minis ter will have to deal with the Jobs Fund package of his or her department when those Estimates are before us. Mr. Chairman, if the member will look on Page 140, he will notice tha t there are $9 1 millions of dollars allo cated for the Jobs Fund of which Busi ness Development has 35 million; Housing has 20 million, and Community and Capital Assets has 35 million.

That is where we should be discussing those Estimates; otherwise we will be doing it twice, Mr. Chairman. MR. A. DRIEDGER: Mr. Chairman, to explain why I'm raising the question, the Min ister in his report alluded to the involvement in the Jobs Fund and that's why I thought maybe it was appropriate under Strategic Planning to raise it, but if it's not the appropriate area then we will pass tha t too. But I want to illustrate tha t that is the confusion that the public has too, that it doesn't know where to get who and where at various times because it is always being passed on to a different time.

I think the Minister would maybe be more appropriate if he would allow discussion on these aspects of it at the time; if not, fine, I can live with that too. MR. CHAIRMAN: The Member for Sturgeon Creek. MR. F. JOHNSTON: Mr.

Cha irman, the Mini ster mentions the Jobs Fund - and I'll try to stay to Strategic Planning - if the Jobs Fund is making any decision as to expansion of business in the Province of Manitoba or attract ing a new small business for the Province of Mani toba, will this Department of Busi ness Development, strategic Planners be involved with the planning that is done or the monies being spent through the Jobs Fund, because I would say that this is the area where they will have the knowledge about small business? HON. S. USKIW: Mr.

Chairman, to the extent that this department delivers on a portion of that particular estimate on Page 140, then our expertise will be utilized no doubt. MR. CHAIRMAN: The Member for River Heights. MR. W. STEEN: Mr. Chairman, through you to the Min ister, some weeks ago he provided me with a description of his department, an outl ine of the department, and in it, it shows the Deputy Minis ter having really two areas reporting to him, and that is the Small Business and Regional Development, and the other being Travel Manitoba, two halves I guess you could say of the department.

But there are three particular persons or small areas that report to the Deputy Minister, and that is the Strategic Planning and Development, Finance and Adminis tration, and then he has an asterisk that says tha t Finance and Adminis tration is shared with the Department of Industry, Trade and Technology. Then he has a third

part called, Communic ations and Advertising Services. My question to the Minister is a follow-up to what my colleague was saying that Manitobans have some degree of difficulty knowing who to go to now and where to go to now that the old Industry and Commerce has been divided into two disti nct departments. Does his Communic ations and Advertising Services have an office that is available to the public, is well-advertised to the public? Is that where an entrepreneur in Manitoba would begin his commun ications with the department in trying to find out just what services are available? Mr.

Chairman, perhaps I can clarify and try and repeat my question. I am looking at the organizational chart which he provided me with a few weeks back. If a Manitoba businessperson wanted to find out what services through government are available to him or her, is there a place other than the Minis ter's office that person could start? Is there a starting point? My question is: is that starting point an office that is advertised and indicated to Manitobans clearly? Is that the Communic ations and Advertising Services? HON. S. USKIW: Mr.

Chairman, if the member looks at his chart, he will notice that we have in the Small Business

section a whole series of blocks that tell him or should sugg est to him where the se various components lie within the department. Now one can choose to go directly through the Min ister or Deputy Minis ter's Office and then be channeled down, or one can go directly to any of those squares if you like. Nothing has changed there. The only thing that has changed is that we have three different departments at work here, but all of these components were there before and continue to be there, and continue to provide service to the public as they have in the past.

Whether they report to a different Minister is neither here nor there as far as the general public is concerned. They have not been dismantled, and the same lines of commun ications that were there are there today. MR. Vi. STEEN: An example, Mr. Chairman, would be a p '>On called me the other day and wondered about bw .ess assistance, financial assistance. Is it available? H( �aid, where do I start? Well I said, start with the � .• 11ister of Bu£• ness Dev elopment and Tourism, and I gave the Minist er's number out.

But I would hate to see every person contac ting government being given the Minis ter's office number, because it's impossible for the Mini ster to serve all interested Manitobans. What I am driving at is: has the Min ister made a specific office available to the public as a starting point? Then that office will try and work out what the concerns of the taxpayer are, and funnel that person to the direct 1621

aspect of his department that that person should be dealing with, so that they aren't on a hit-and-miss basis, so that they can be served in the most economical and quickest fashion possible. HON. S. USKIW: Mr. Chairman, perhaps the member is not aware that there has been a centre for that very purpose developed, I think, by their administration some several years ago. lt still continues to function in that capacity, and that's the Enterprise Development Centre on Lagimodiere. Then we have Brandon and Dauphin as two regional centres, so that has not changed.

The fact that the reporting system has changed with respect to mini stries is an internal matter, but those offices are there and they continue to function as they have before. MR. W. STEEN: The three offices that the Minis ter speaks of, the Winnipeg, Brandon, Dauphin office, can funnel an interested person to the appropriate offices in any half of that branch called Small Business and Regional Development. HON. S.

USKIW: They are the sort of front door or the resource centre for small business; that's essentially what they are, and it doesn't matter what it is that a person wishes to find out, that's where they will get the information. MR. W. STEEN: That's what I wanted to find out from the Minis ter, was there a central spot that the persons could go to and, as he said it was done during our day, but I wasn't the Minister in those days and I haven't, fortun ately, had to go to government for financial assistance or busi ness development assistance yet .. MR.

CHAIRMAN: Thank you. 1. (c)(1 )- pass; 1. (c)(2)­ pass. 1. (d)( 1) Commu nications: Salaries; 1. (d)

(2) Other Expenditures - the Member for River Heights. MR. W. STEEN: In 1. (d)( 1) , I notice that there's just a very slight increase, so obviously there are no additional persons within this branch of his department and the Other Expenditures is virtually the same as last year, in fact very slightly down. lt says that this particular

section of his department "provides profes sional consultation and support services to the department and its communication with the public." Are those persons that are within this expenditure the persons he mentioned that were located in the three offices, the Winnipeg, Brandon and Dauphin offices? HON. S. USKIW: Mr. Chairman, this group is at 155 Carlton Street in Winnipeg. MR. W. STEEN: And they are available to provide the busi ness sector of the province with professional consultation and assistance. HON. S. USKIW: Mr.

Chairman, essentially, in the Tourism side of the department, that's where we do provide a lot of assistance, in brochure development and things of that nature. MR. W. STEEN: I see. I wasn't aware that this particular area of his department was closely associated with the tourism aspect. MR. CHAIRMAN: The Member for Emerson. MR. A. DRIEDGER: Thank you, Mr. Chairman. Under the Commu nications aspect of it, I raised it before, possibly at the wrong time, but the Minister alluded to communicating with the small busi ness people in the province.

Could he maybe elaborate to what extent commu nication has taken place, because the expenditures seem very much the same, and in terms of what is happening, could he maybe explain exactly to wh at extent the communi cations have taken place with the small business community? HON. S. USKIW: Mr. Chairman, maybe what I should do is read out to the members the specific achievement of the branch for last year. That will give them some insight as to what 's been happening with the Communic ations end. That would be helpful to the members.

Co-ordination and implementation of the new "Manitoba - Take Another Look" brochure, Is one example of their effort. lt's in the tourism campaign which is part of Travel Manitoba's major thrust. lt might be of interest to members to know that they won an award last year tor their best 19 83 advert ising campaign. MR. A. DRIEDGER: Was this under Tourism or was this under Small Business? HON. S. USKIW: lt's the Commun ications group that handles both sections. That's only one of their functions.

There are various other things that they have been involved in with respect to promotional programs, a booklet on co-operative venture. Essentially, what they are doing is providing the basic advertising tools for both Business Develo pment and Tourism. MR. A. DRIEDGER: Did the Mini ster want to read that thing into the record? · HON. S. USKIW: it's quite lengthy. I can go through it if the member wishes, but I just ·gave him some examples. MR. CHAIRMAN: The Member for Morris. MR. C. MANNESS: Thank you, Mr. Chairman. I hope my question is not repetitive. I'm sure you'll tell me if it is. MR.

CHAIRMAN: Yes, I will. MR. C. MANNESS: Thank you. I would like to follow a line of questioning by my colleague regarding the line of demarcation used as to how one company, small busin ess, falls under the purview of this particular Minister and how the next one might fall unde r the Mini ster of Eco nomic Development; and I'm .thinkin g specifically of the example used again by my colleague regarding Superior Bus, and also another example in Morris; namely, Brock Valley Steel.

The Min ister whose Estimates are before us now was in attendance at an official opening at a new small manufacturer at Morris of which we're all, 1622

of course, very proud, and like I said he was in attendance at that opening. Yet the other day in the House I posed a question regarding Superior Bus and it was referred to a different Minister. 1 believe one company employs some 25 people. I believe Superior Bus today Is employing 50 or 60 or 70 people. How does the government decide under whose purview one company falls into and how another one might not? HON. S.

USKIW: Essentially, there's no iron-clad rule because we do overlap, but Superior Bus is perceived by the government - and I believe, by the community - as being one that is interested in the marketing of its production beyond the boundaries of Manitoba and therefore logically falls into the Department of Trade and Commerce, or Trade and Technology, if you like. lt's not an intra-Manitoba market that they're dealing with exclusively; it's a pretty wide-ranging market, and then of course, the very size of their operation, so that's an example of IT& T area of responsibility. MR. C.

MANNESS: I can accept that answer In part, Mr. Chairman, although. certainly it's the intention of Brock Valley Steel to become an exporter, not in a national sense, but certainly in an Inter-provincial sense, I'm sure to become an exporter outside of the province, to other western provinces other than Manitoba, so again, in view of that stated goal of that company, I would ask him whether his answer would remain the same or is he really meaning trade outside of the nation? HON. S. USKIW: That's a good example of what I meant when I said there's some overlap.

We would tend to nurse them along in their infancy, if you like, and as they grow, we would be referring their larger needs, if they're inter-provincial or international trade requirements, to the other depart ment, but we would guide them in that direction, as their needs arose; so the two departments have. to work in harmony, in that sense. MR. C. MANNESS: One final question, Mr.

Chairman, . and the Minister may have, in not addressing a question 1 posed in the House a couple of weeks ago regarding events at Superior Bus, he may have given me the answer then by not answering, does his department have any involvement whatsoever regarding the events and the goings-on at that particular business? HON. S. USKIW: Mr. Chairman, I know we're involved with the communit y, who has an interest in what happens to Superior Bus or that plant, but directly with the plant, it would be the Department of Industry, Trade and Technology. MR. C.

MANNESS: I'll ask no further questions at this time, although once we move into Regional Development Corporations I may want to pose some questions regarding the community involvement in that bus company and the general thrust of the future. MR. CHAIRMAN: The Chair thanks the Member for Morris. 1 .(d)(1)- pass; 1. (d)(2)- pass. 2.(a)( 1) Business Developmer:t: Small Business and Regional Devel opment, Salaries; 2.(a )

(2) Other Expenditures - the Member for Emerson. MR. A. DRIEDGER: Thank you, Mr. Chairman. I'm just wondering, since there seems to be according to the Minister, a fair amount of overlapping between the categories of Economic Development and Small Business, could the Minister indicate here what is the rationale for the split to begin with? HON. S. USKIW: Well, Mr.

Chairman, I believe what the rationale Is, the government has decided that the economic question is the most important question facing Manitobans today and will likely be the most important question for a numb er of years to come, given the fact that we're still not out of the recession, and job creation and employment opportunity is No. 1 on the list as an initiative for government. Putting three Ministers to work in that area of responsibility is probably more effective than to load one person with that responsibility in tough, economic times.

So what we've done, essentially, is develop a specialty area for each of the ministries: one dealing with employment opportunities, one dealing with industry, trade and technology, and the other dealing - which is this department - with essentially almost all of the business communi ty of Manitoba, namely, the small business sector as a specialty area. MR. A. DRIEDGER: A further question then to this Minister regarding the small business development. Are there incentives at the present time for a small business that wants to expand and create jobs through their expansion, through the Government of Manitoba?

Can they look for assistance other than technical advice? Can they look for some financial participation in terms of building equipment, etc.? What are the thrusts in · this area that the Minister can relate to the people of Manitoba, because invariably there are always people that want to look at business expansions or getting into business and they ask what is available? Until now, there seems to have been virtually nothing available. I wonder if the Minister could indicate exactly what is available to the small business persons in Manitoba. HON. S. USKIW: Mr.

Chairman, with respect to provincial effort through this department, we don't have financial grants or loan programs. What we do have is Venture Capital for companies tha t are newly established or companies that are in trouble. That is a vehicle through which Venture Capital corporations could assist a new business or a business in trouble, to recover from whatever the problem is, whether it's equity problems. That has just been expanded, as I've a'1nounced some time ago, to $4 million from the $1 million.

The $1 million experiment proved to be successful, in that it was completely utilized, that is the dollars were. We've had some discussion with the business community on what we should be doing with Venture Capital, as a result of which we have made some modi fication and we' ll be announcing fur ther modification to the program fairly soon. But essentially, we've committed ourselves to $30 million or $35 million 1623

Tueed ay, 5 June, 1984 over the next four or five years in the Venture Capital idea, as a means of funding new businesses or new ventures, if you like, or existing ones. MR. A. DRIEDGER: Just a further question, would this funding be in terms of grants, loans or exactly what would this involve? When we're talking $35 million to $40 million that is going to be put into the system, how would people be able to take advantage of this -through what means? Through applying, like I ind icated -is it a loan structure? Is it a grant structure, or what is the system whereby people can take advanta ge of this? HON. S.

USKIW: Well, Mr. Chairman, Venture Capital is not new. lt's been with us now for over a year. lt's a situation where the province is willing to joint venture in a Vent ure Capital corporation. lt would invest in a company newly created or a company that's already in existence, but needs new equity financing. To date, we have been involved in 11 such companies. I believe the numbers are that we have created about 167, I think it was, new job opportunities through that program and saved about 130 jobs that were in jeopardy because of financial ins tability within the company.

So we have levered about $12 million with $1 million of provincial mone y, which is advance in the form of 35 percent shares in any new Venture Capital corporation. The province takes special shares in any new Venture Capital corporation on a 35-65 percent split: 35 percent, the province and 65 percent, the private investor. So we have levered $12 million with about $1,million of Venture Capital money in the last 12 months. MR. CHAIRMAN: The Member for River Heights. MR. W. STEEN: Mr. Chairman, through you to the Min ister, he makes reference to 11 companies that were assisted and so on.

Are the names of these companies available to the committee members, or if the particular names are not available for particular reasons, are the types of companies and what they are manufacturing or what they are producing available? HON. S. USKIW: Just to give the member an overview, we have had about 400 inquir ies, 20 applications and 11 Venture Capital corporations were formed which used up $970,500 out of the million.

Projects supported were in the area of computer software, electronic commu nication, blending and packaging, metal fabrication, primary metal production, equipment manufacturing, total jobs created and maintained -300 in those components. MR. CHAIRMAN: The Member for Sturgeon Creek. MR. F. JOHNSTON: Mr. Chairman, the Minister said that the Venture Capital money was in the Jobs Fund -at least, it's not shown on these Estimates. The Min ister also refers to the $12 million of leverage created by $1 million and he refers to the applications that come in.

In other words, the Jobs Fund just supplies the mone y, and all the work is basically done by this department? Am I correct? HON. S. USKIW: I'm sorry, I didn't get that last point. MR. CHAIRMAN: lt's a loaded question. MR. F. JOHNSTON: Well the Jobs Fund apparently supplies the mone y. As the Min ister said, the Venture ·Capital is in the Jobs Fund. This department does all the receiving of applications, processing of applications, etc. HON. S. USKI W: Yes, and remember, Mr.

Chairman, that this is a Capital Program; it is not a Current Account Program. lt is a fund that the province recovers on, ultimately, when the shares are redeemed. MR. F. JOHNSTON: But the Minis ter referred to the money, the Venture Capital, being in the Jobs Fund; if I am not mistaken, he did. HON. S. USKI W: Yes, but it's out of the Loans Fund, as I recall it. MR. F.

JOHNSTON: In other words, it was just a transfer of the provision shown in the Estimates last year for a Venture Capital Program that was In these Estimates as far as funding is concerned and now it has just been transferred to the Jobs Fund, which is the same old story again. lt could very easily be in these Estimates and not in the Jobs Fund. MR. CHAIRMAN: 2.(a)(1) - the Member for Sturgeon Creek. MR. F. JOHNSTON: Mr. Chairman, is this the area where we can discuss the regional development corporations? MR. CHAIRMAN: Yes, it is. The Mem ber for Sturgeon Creek. MR. F. JOHNSTON: Mr. Chairman, I refer to an

article in the Parkland Enterprise of April 5th where Mr. McGuire, who was speaking to the Parkland Regional Development Corporation Annual Meeting, stated that there is a threat to economic development in the rural areas and if the trend isn't reversed the Province of Manitoba will become the Province of Winnipeg. Mr. McGuire was stating to them that they would have to work harder out in the rural area if they wanted their children to find employment, etc. Mr.

McGuire was hired by the provincial Business Development and Tourism Department 18 months ago to review the role of regional development corporations. lt goes on to say that the department has just completed a review of the development corporations, which we have had presented to us in the Legislature. He goes on, "And Mr. Slogan, the vice-president of the Grandv iew Chamber of Commerce was not happy because he would like to see it opened up much wider." Mr. McGuire said the municip alities are balking at memberships.

"Let's face it," he said, "if employment could be created easily in Grandview or Dauphin or Swan River, it would have been done." McGuire said, "Not everyone in the government is sure RDCs are somet hin g it should suppor t." But the Mini ster responsible, Sam Uskiw, said, "They will be funded for one year on a trial basis." Uskiw is not looking for Nirvana, but kind of a professional network that will continue to work. 1624

TuesclaJ, 5 June, 1984 McGuire reminded the corporation about the 80 percent of people who are employed by small business, etc., and he said, "We are not just talking about business development." He said he should think of creating employment in a broad way, including tourism, agriculture, etc. McGuire said he hopes that by the end of the year-long trial period both government and the taxpayer will be convinced RDCs are viable entities. Now we are very aware that the RDCs had to have a study; as a matter of fact, there was no question that it had to be done. Mr.

Chairman, I would refer to a letter to the mem ber, Mr. Wally McKenzie, from the Town of Roblin, the mayor of Roblin, where he says, "What provision Is there regarding the future of regional corporations, or are we on trial for a year-by-year basis? Why do we have an axe hanging over our heads if we don't measure up to the government's standards of accomplishment? How can we perform if we don't know what kind of existence we have, and for what period of time?" Mr.

Chairman, I would like the Minister to clarify this to the RDCs of the Province of Manitoba because after the year's time is up, there should be some indication that there will be another program in place such as has been In place with the RDCs, that is upgraded and possibly better than the one that was there before. lt was there for a long time.

But should the RDCs in the rural communities of Manitoba be - as a matter of fact, the mayor of Roblin says, "have an axe hanging over their head and be on a trial basis from year-to-year, how do you expect to get membership with that kind of a situation?" As a matter of fact, the headline in this paper is, "Rur al Development Thr eatened." I don't know ttiat that's very good commu nication. Is the Minister planning to change that impression out there by saying that there will be something in place to work with the rural area as far as expansion is concerned? HON. S. USKIW: Mr.

Chairman, I think the Member for Stu rgeon Creek is probably more than aware as to the problems that exist within the existing mechanism in the ADC program. . We have a situation in Manitoba which has led to the study, and that is where there is not acceptability of the present program by many mun icipalities, local governments, in Manitoba. We have one area of Manitoba that doesn't have an ADC. it used to have one but decided to abandon it. We have another one that out of almo st 30 municipal ities only six are members.

That is the reason why a study had to be undertaken and an evaluation made of the current ADC program. Surely, members opposite aren't suggesting that once a program is launched that it should never be altered, regardless of the acceptability of it or the lack of it or whatever. So what is under way now is that particular review. We have the report, we are going to determine where we go from here before the next fiscal year, and there will be an announ cement sometime later on this year as to what we intend to do policy-wise with respect to the ADC program.

If someone asked the question: are we going to have the same ADC program in the next fiscal year? - I am not in a position to say yes to that, nor am I in a position to say no to that, because what will happen will be the results of our policy discussion which will be undertaken sometime In the course of the next two or three months. But we are currently looking at that report and having discussions throughout the province In an effort to determine just what should be done with it.

The RDCs, If they are going to continue as they are, or whether there is something else that is more attractive, I really don't know. it's really a period of evaluation that we are in at the moment, but it doesn't mean that the RDCs are out the window because that decision has not been made, but certainly they are under a great deal of scrutiny as they are presently functioning. They . are aware of it because we have interfaced with them on this question over some period of time. The program that we deliver has to have acceptability; otherwise, we must review its content. MR. F. JOHNSTON: Mr.

Chairman, the Minister has given me an outline of what is happening and what their research is doing to find out what they are going to do, but it's very obvious that the people out in the rural area don't know whether there is going to be any program or not. After a!! of your research, after all of your studies and after all of your communication, which I can say it has not been very good, especially with the remarks from this paper and the remarks in the letter from the mayor of Roblin, as the communi cation has to go to them as to whether you are going to supply another program or not. An example, Mr.

Chairman, last night in the Minister of Cultur al Affairs' Estimates, and Recreation, he said that he had come to the end of a program and he would be introducing another one very shortly. You took away all doubt. There is going to be a program regarding recreation and the funding. I think the Minister has to take away all doubt regarding this situation in the rural area from the point of view that they don't know what is happening and they have to know if something is going to replace it. In other words there may not be funding for RDCs.

Are you going to decide to have your own provincial employees doing the work out there with the RDCs? lt does happen in other provinces, but are you going to have something that will give the rural community the feeling that they are important and that you're be working with them? HON. S. USKIW: Well, Mr. Chairman, I don't anticipate that we're going to abandon the ship with respect to the need for providing that kind of support service to the various regions of Manitoba. The nature of the preceding program is what we have yet to determine. A program there will be of some sort.

I'm not in the position to say what the nature of the next year's p•ogram will be. I don't even wish to speculate on that ':ltlcause we have not had an opportunity to fully assess the research document that has been filed with us and to make a determination as to where we want to go with it, nor have we fully assessed the response of all the RDCs and the communities to that document and, until we have that assessment, we are not in a position to give a definitive statement. I think they're all reviewing that document very intensively at the moment, Mr. Chairman, and out of 1625

Tuesday. 5 June, 1984 that will come some response and some idea of where the people out in the country want to go. We're going to wait for that response and we're going to be involved with a great deal of discussion before we announc e new policy. MR. F. JOHNSTON: Mr.

Chairman, you referred to the program that was under Destination Manitoba where the program worked with communities or mainly towns, but to very great extent to help them analyze the reasons why business was declining or analyz e the reasons why people were not coming to do their shopping within that town, and then there were two other steps to that program to help the community after the studies and work had been done to make recommendations as to what could be done to help solve the problems for some of the commu nities within the area.

The commun ities did apply to have this work done within their area or within their town, and it was cost­ shared with Destination Mani toba. You refer to this being a continuing type of program. Is the program still being cost-shared with the communi ties that are going to be involved in it or not? HON. S. USKI W: Mr. Chairman, would the mem ber repeat that? Did he say are we going to cost-share? MR. F. JOHNSTON: Well, it was cost-shared with the communiti es to some extent and Destination Manitoba.

Will the commu nit ies that you're working with -you referred to the program as being a continuing program - will it still be cost-shared with the commu nities? HON. S. USKIW: Mr. Chairman, the province picks up 85-100 percent of the cost of that program depen ding on the ability of the community to contribute, to participate financially . So, we have picked up all of what was the federal portion plus retain the provincial and, in some instances, pick up 100 percent. We've also expanded it to smaller communities, so we're very much financially involved, yes. MR. F. JOHNSTON: Mr.

Chairman, there was a program within the department, the Ind ustrial Design Department, and you state that it is no longer in your department or no longer a program within the government. Can the Minister give us the reasons why? HON. S. USKIW: Mr. Chairman, no, we still have the Ind ustrial Design group. We still have a board and it reports to this department. The only change that has been made is that we've integrated the program into the department. We don't have an independent director of the Design Institute. MR. F.

JOHNSTON: I wonder if the Minister can explain whether it was a good idea for the government to tell a man just after he came out of the hospital that there was no place in the department for him and that there was nothing in the Estimates for his job and that he wouldn't be needed anymor e after he'd been with the government for nearly 25 years. HON. S. USKIW: Well, Mr. Chairman, there's two points I want to make. One is that particular individual was not part of the department which I inherited if you like or which I took over.

That decision was already made before so I did not have that person within the employ of this department. On the hand, I'm advised notwithstanding that comment, that the senior department which made the original decision did arrive at a settlement that was satisfactory to that individual. There was a negotiated agreement and I'm not aware of any ill feeling as a result of that. MR. F. JOHNSTON: The Minister explains it wasn't done while he was Minister of the department, I can only say it was a heartless and cruel decision by somebody else. MR. CHAIRM AN: 2.(a)( 1) -the Member for Sturgeon Creek. MR. F.

JOHNSTON: Mr. Chairman, he mentioned the Core area. Do you have two people working in the Core area? The mone y is obviously the money belonging to the Core Area Program, does the department or Minis ter have any decision as to what will be done? There can be counselling but here again we're talking about small business. Does this department have any decision making as to what small businesses will be developed? HON. S. USKI W: Mr. Chairman, it's my understanding that there is a criteria that's already established as to eligibility for the program. That's under the Federal­ Provincia l Core Area Agreement.

We are merely providing a consultative mechanism to help deliver the program for the Core Area Project. So, we're expediters rather than initiators of the program itself. MR. F. JOH NSTON: Mr. Chairman, the Min ister mentions the regional offices in Dauphin and Brandon, are the enterprise development centres that were set up during the Enterprise Development Program that would be assistance to small business or be their landlord for a short period of time at a reasonable rent until they became established -are those centres still going to be in operation in Dauphin and Brandon? HON. S.

USKIW: That function has been turned over to the Research Council here in Winnipeg. In Brandon and Dauphin, we're not able to provide that service anymore. That has been discontinued, Mr. Chairman. MR. W. STEEN: Mr. Chairman, in this same line of questioning that my colleague was asking, the Core Area and Small Business Assistance Program.

One of the complaints, as an urban member that I hear from persons in the Core area, particularly the busine ss people, is the great unc ertainty as to expropriation of their properties, when they're going to be expropriated, and are they going to be expropriated and busin esses appear to be suffering as a result of the great uncertai nty. These two persons that the Minister speaks of in his report as consultants, are they in there working on behalf of the busine ss person and trying to carry the businessman's concerns to the Core Area Ini tiative 1626

TuesdaJ, 5 June, 1984 people to relieve a great deal of this uncertainty, particularly as to which properties are going to be expropriated and which are not? HON. S. USKIW: Mr. Chairman, I don't believe that our people are at all involved in the expropriation proceedings. We are involved in the delivery of the Incentive Program, which is a grant and feasibility study program. MR. W.

STEEN: I didn't think for one moment that his people were involved in the expropriation, but the businessman's bigge st concern is the city or the tri­ party group expropriating his property for future plans and this great deal of uncertai nty, because the Core Area Program is now into its third year and it is going to be a numb er of years before it ever sees its completion date. The business person, north of Portage Avenue, has a great deal of uncertainty. Are these two persons from within his department talking to these business people, trying to assist them with these areas of uncertainty? HON. S.

USKIW: I am advised, Mr. Chairman, that our counselling services have to do with relocation potential and readjustment for those people that are being expropriated, but we pick them up at that end. We are not involved in the proceedings prior to and during expropriation. So it's when they wish to relocate or establish new business enterprises that we consult with them on it. MR. W .. STEEN: Mr. Chairman, earlier the Min ister mentioned the 11 companies that were assisted with Venture Capital, I believe. He said that they used up almost $900,000.00.

In his report, he talks about 1984- 85 fiscal year of having $4 million available. When he mentioned almost $900,000 being used up, was that from last year's appropriation? HON. S. USKIW: Yes, I believe it was $970,000 out of the million that was approved for the last fiscal year. This year we have $4 million for the somewhat changed program from last year, enhanced program. MR. W STEEN: This $4 million is in the Estima tes under the $35 million in the Jobs Fund? HON. S. USKIW: Mr. Chairman, that's where the $4 million will come out of, yes. MR. W.

STEEN: The Min ister mentions that this program of Venture Capital may be enl:t rged to as high as $35 million over the next five years. If there isn't such a thing as a Jobs Fund, then you would have the monies moved back specifically into your Estima tes under Capital Program? HON. S. USKIW: Mr. Chairman, we are now indulging in ... MR. CHAIRMAN: Speculation. HON. S. USKIW: . . . hypothesis. I don't know that it is very productive to talk about what will happen, if something else happens or doe.sn't happen, because then we will be here forever and a day, wondering what will happen if something else happens. MR.

W. STEEN: Onto another area, he talks about the Interest Rate Relief Program and helping out some 700 businesses that employ approximately 2,400 persons. Where did the money to help these 700 busine sses come out of, his $35 million in the Jobs Fund? HON. S. USKIW: Mr. Chairman, that's an ongoing program that was launched two years ago, a year-and­ a-half. 1t was a two-year effort which was funded by the Department of Finance out of the Loan Fund. MR. W. STEEN: lt's in the Department of Finance's Loan Fund Estimates? HON. S. USKIW: That's right. MR. W STEEN: lt is not within your department's Estimates? HON. S.

USKIW: We sc'rninister the program. MR. W. STEEN: You administer it, but the funding is under the Mini ster of Finance? MR. CHAIRMAN: 2.(aX 1) - the Member for Pembina. MR. D. ORCHARD: Thank you, Mr. Chairman. Back at least four years ago - I may be wrong on the exact number of years - a business consultant group was put together using four , I guess, retired businessmen to provide consultin g services to businessmen thr oughout the Province of Manitoba, particularly small business, to help them with financial planning, inventories, you name it, a wide range of busi ness experiences.

Is that group of four consultants still working within the department and providing those kinds of services? HON. S. USKI W: Mr. Chairman, I believe the member is alluding to the Enterprise Manitoba Program, which has been terminated. Three of those four staff have also been terminated, in that they were term or contract staff, if you like, for a term definite. MR. D. ORCHARD: Is their function being replaced in any way with new people? HON. S. USK IW: No, we have fewer man power resources in that area at the moment, Mr. Chairman, by the termination of that federal-provincial agreement. MR. D.

ORCHARD: Now was the departmental &ssessment of that service, did it indicate that it was valuable, that it served the business community well? HON. S. USKIW: I am advised that it was appreciated as a service, but it's like all federal-provincial programs tha t have a definite termination date. Once th e termination date arrives we cannot continue, unless we want to fund the program by way of 100-percent 1627

Tuesday, 5 June, 1984 provincial funding. We have not decided to do that. That decision was made some time ago. We do have to appreciate the fact tha t th e Government of Canada has come out with a num ber of other in itiativ es under their IRDP Program which takes off, I suppose, as a successor to some of the programs that we are talking about. To the extent that we can exploit those new init iatives, then we do that, but our role then is more of a referral role, in order to access federal programs. MR. D.

ORCHARD: I guess the interesting analogy that one can make is that we've got a government that has now got this new-found recognition of the business commun ity. The Throne Speech this year talked, in glowing terms, about how the private sector was the engine for growth. I mean, in the Minister's opening remarks, he talked about small business and - what? - 70 percent of the employment is or 70,000 jobs are in less than 20 firms.

We have got a government that has created a Jobs Fund with $200 million in it. lt is loading the province with green Jobs Fund signs, to such an extent that if you put a ventilation fan in a curling rink, you get a Jobs Fund sign for a half-day's work.

You have taken three people who - I think from the experience with the business community in my area - provided quite a useful function and saved some businesses from more financial problems, and a government that has identified the private sector as being one they're welcoming with open arms and they're buddy-buddy with them - they now recognize the folly of their first two years - cutting a program that provided some really sound advice to the busine ss commun ity. At the same time, we have got $210 million this year in the Jobs Fund doing - we don't know whether they are doing anything that's original.

A lot of it is function that is transferred directly from other departments, and a Jobs Fund sign is put up to do the same work that was done in a number of other programs - sewer and water projects, as an example. I really question the sincerity, if you will, of the government, in their talk when they don't deliver and I just don't buy the argument that we've got to reduce manpower, we've got to reduce staff, when you've got that $210 million Jobs Fund sitting there.

Money was stripped from probably this department as well as others to provide the funding for the Jobs Fund and an excuse that you don't have the dollars to carry on that program just simply doesn't cut any ice any more.

You've got enough money to advertise the Jobs Fund Program ad nauseum, until it was almost you couldn't turn a radio station, a television station or open a newspaper anywhere in the Province of Manitoba but what you weren't hit with several ads of the Jobs Fund and what great and glowing things it was doing, when you're taking 75 percent of a consulting service that the business commun ity, the small business community that doesn't have access to that kind of expertise from, to my knowledge, any other area.

You cut that kind of program out for the sake of an extra 150 or 200 Jobs Fund signs and some newspaper ads and some radio and television ads. The priorities, I don't think, are right and I regret to see the Minister unable to continue funding that even though he uses the excuse that the Canada-Manitoba Agreement is no longer there, you've still got $200 million floating around in the Jobs Fund. · HON. S. USKIW: Mr.

Chairman, I think the Member for Pembina should recognize the Federal-Provincial Agreements that are time specific are expected to be time specific and when they terminate, people that are there on contract for that period of time know that they are going to be leaving those jobs and will be looking elsewhere. If we were to retain all the staffing of all the old Federal-Provincial Agreements, then we would have three or four times the number of civil servants that we now have in the Province of Manitoba; so we must recognize what those special initiativ es are.

They're established for a set period of time, for a specific purpose, and they terminate. The provinces cannot expect to pick up, if they want to continue with those, 100 percent dollars or 100 cent dollars where they were only picking up a minority portion before. I don't think the Member for Pembina wants us to do that either, Mr. Chairman, because the tradition that I'm familiar with, only too well, is that the Tory position has always been to reduce the level of staffing and to let the private sector do it all.

We are hoping to involve a great deal of private sector types through our own initia tives which involve many more people, through workshops, seminars, things of that nature, but the one-on-one situation, it's a pretty expensive proposition tha t we just can not carry on with, within this department. MR. D.

ORCHARD: I'm not asking the Minister to continue with those specific Individuals, but isn't the idea of some of these Federal-Provincial Agreements to attempt to fill needs, to see, to deliver programs, to sort of test the market to see what works and what doesn't work and when you've got something that works and has been successful, and I think anyone in your department will indicate that that group of four was a pretty successful group; and I realize that· you're losing 60 percent of the funding under the 40-60 financial arrangement of the Federal Government when the 60 percent federal portion is pulled out, but I just reiterate, and I don't have to remind this Minis ter because he knows the Jobs Fund is there.

You've got the money to use in what I consider, and what the busi ness community considers to be a less productive way through the Jobs Fund, and I think you would find yourself well served and very supportive of the small busi ness community if you were to continue a program simila r to that, because one-on-one consultation is superior to your group sessions, because no one who has a management problem In his business is going to come to a group seminar and lay out in front of his competitors and his neighbours and his busi ness colleag ues in the community, the problems he's having in his business.

But he will lay it out one­ on-one with a consultant and that consultant, with the kind of expertise those gentlemen had, often could come up with a suggestion that helped that business. I think going to the seminar thing is a heck of a good way to advertise more meetings and more involvement with the government and really not deliver as much 1628

Tuesday, 5 June, 1914 effective advice and program as what you were doing before. MR. CHAIRMAN: The Member for Morris. MR. C. MANNESS: I'd like to ask the Minister whether he had representation from individuals, both from the Towns of Morris and St. Jean, regarding a proposal or a request on their behalf to have performed a study that would look at the economic future of that particular area. I don't know whether that would fall under some of the recommendations made within the study team on regional development corporations in Manitoba.

Could the Min ister indicate whether that request had come in from their end? HON. S. USKI W: Sorry, what's the question? MR. CHAIRMAN: Would the member kindly repeat the question? MR. C. MANNESS: I'm wondering if you could Indicate if such a request came from community officials within, let's say, the Red River Corridor area. HON. S. USKI W: Mr. Chairman, there had been discussions with the officials along the Red River Corridor for months, in fact, dating back several months.

We will be attempting to respond to that particular need through in-ho use capacity, but in-house capacity that is not yet in place, but is part of our expansion in this .year's Estimates. MR. C.

MANNESS: Is the Min ister then saying that there will be a special study within his department that will look at the long-run, economic future of that area, particularly insomuch as it's my belief that the Labour Board will rule against Superior Bus, fi rst ly, and secondly, throwing out the major employer, in my view, within that region and throwing a large num ber of people out of work; and I guess my specific question to the Minister is again, are researchers and analysts within . his department, have they received yet a request from the Min ister to initiate such a study that would look at the long run or, in fact, are they somewhere down the line of priorities?

HON. S. USKIW: Mr. Chairman, it's my understanding that the communities in question intend to do a study of their own and we will be giving them a fair amount of technical support toward that. We will likely be putting staff resources at their disposal at some point in time once we have filled a position that we have allocated for that very purpose, a person that will be int erfacing with local industrial commis sioners, etc., and local community initia tives. At the moment, we don't have a person for that area, but we will be recruiting a person to fill that function. MR. C.

MANNESS: Had that group requested a specific amount of government funding for such a study? HON. S. USKIW: As I recall it, Mr. Chairman, there was a request for funding of some $50,000 or so, but we do not have that kind of capacity within the department. We have had to say no to a number of areas that have made similar requests. That's only one of the community groups that has come to us with that kind of request for funding. We have instead suggested that we respond to them with technical assistance in helping them get their own study under way. But funding, no, we don't have a program for that kind of ... MR.

C. MANNESS: A final question, Mr. Chairman, 1 guess I tie it Into an earlier question I made this evening. Given that it's my belief that the Labour Board in their "wisdom" will probably bring forward a decision that will have some very negative impact upon the largest employer within that whole area, I'm wondering what action this department is obliged to take on behalf of that large area of our rural commu nity, of our rural area. Are they obliged to take any? Although I don't want to be overly-pessimistic, I feel that there will be some significant happenings in due course.

I am just wondering if there are any contingency plans within any area of government to deal with what potentially could be a worsening situation. HON. S. USKIW: I hav.:. to assume that the member is alluding to Superior in Morris, whArein there may be a decision that may be deemed to be not in the best interests of the company. At least, that's what the member alleges. We, of course, would be involved to the extent of monitoring what is happening. We don't have a particular role in the sense that we can't anticipate a ruling that is to be handed down by a quasi-judicial body.

We can only react to it once it happens. I don't think we have a mechanism to do anything else. MR. CHAIRMAN: 2.(a)( 1) - the Member for Pembina. MR. D. ORCHARD: Thank you, Mr. Chairman. I wonder if the Min ister might be able to discuss the current status, if any, of the proposal to establish a flax seed crushing plant in southern Manitoba. Would this be the appropriate place to do that? HON. S. USKIW: That function is the responsibility of IT& T, Mr. Chairman. MR. D. ORCHARD: Mr. Chairman, is the Min ister now saying that he doesn't have anything to do with the negotiation with that group? HON. S.

USKIW: No, Mr. Chairman, we have met with them, but the line department through which they come to government is IT& T. Now I don't know what the latest communique is or actions are with respect to that proposal if there have been any recent ones. MR. D. ORCHARD: The comment has been made before, and I simp ly want to reinf orce what my colleagues have said tonight, that this creation of a tribunal in handling economic development in the province, I think, is courting disaster.

If any Min ister should be involved directly with the negotiations, it should be a Min ister such as yourself, Sir, with the experience you have in gove rnment, with your 1629

TUesday, 5 June, 1984 understanding of agriculture. That is not a derogatory remark to the Mini ster of IT&T. But with this department split three ways , you can have your revolving-door policy for any businessman that comes in and shovel him through one door to another door to the next door, and keep turning him around in circles and spinning his wheels for over two years so that nothing happens.

What needs to be done is somebody take the bull by the horns, and either tell them that project has no value and no use in the Province of Ma nitoba and that the Provi ncia l Government is not interested in it and will not support them in their efforts, or else get down to some serious talk about it because it has been three years now. lt started with a feasibility study in 1981, and has been going from one problem to another. There is a Minister on the other side of this table who was involved with it. We keep on having meetings, discussions, talks, friendly receptions, and no results.

I think this move of creating another economic department, one of three, is just adding further confusion to the ability to make decisions in this government to assist the business community and get something going in this province. HON. S. USKIW: Mr. Chairman, I apprecia te the comments the member is making and his confidence in myself, but I want to say to him that as far as I'm aware there is progress being made on that proposal.

My last contact with the group was some time ago, at which time I suggested to them that they try to raise some local capital by way of a limited-partnership offering which they took up rather seriously. As I understand it, they either have approa ched the Securities Commission or are in the process of filing with the Securities Commission a proposal to do just that, but I am not aware as to where they are. I do kno w tha t th ey are deal in g esse ntially with the Department of Industry, Trade and Technology at this point. They have not been in communication with our department in recent times. MR.

CH AIRMAN: 2. (a)(1) - the Mem ber for la Verendrye. MR. R. BANMAN: Thank you, Mr. Chairman. I wonder if the Min ister could inform us whether his department had any input into the drafting of the White Paper and finally the legislation as to the impact it's going to have on small business. HON. S. USKIW: Mr. Chairman, the member raises again a hypothetical question. it's a matter of what is going to happen as a result of the White Paper that he's questioning. I think that will reveal itself in the course of the next two or three weeks.

For me to comment on it now would be like providing an announcement before the legislation is tabled in the Assembly. I think the proper time to debate that is when the legislation is tabled. We have had very extensive discussions with the business commun ity. That is, our department has. We kno w their views, and we have that in mind in consideration of the White Paper proposals. That is in the final consideration that is under way at the moment. But that debate has to take place during the time of the debate in the House on the introduction of the bill itself. MR. R.

BANMAN: I guess we're at somewhat of a ·d isadvantage here, and maybe that's part of the government's strategy in trying to go through the Estimates first and then holding back controversial legislation so we don't get into that there. But I would point out to the Minister, as he well knows from his years of experience in government, that one of the key ingredients to small business development is the type of labour atmosphere that's created within the province and the harmony that has existed in the last number of years between management and labour in this province.

The Min ister of Labour has given us statistics which point out that we are in a very favourable position, as a matter of fact an enviable position compared to the other provinces. I would caution the Mini ster that while he is charged with the responsibility of small busi ness that any major or radical moves or tinkering with labour legislation will not only cause his department a lot of headaches, it will cause the people of Manitoba a lot of headaches. Somebody was saying the other day that small business, of course, will probably take their frustrations out on the government.

Of course, to that, I would say it couldn't happen to a nicer bunch of guys, but in the final analysis, that short-term political gain for one party will spell disaster for a lot of small businesses in this province. I would urge the Min ister, since the bill has not been tabled, to try and convince some of his more hawkish colleagues in caucus, who want to try some of their labour experiments in this province, to withdraw that. The Minis ter of labour indicated the other day we had eight work stoppages for a total of - 1 forget the exact number of man days lost - very very low.

If you look at the last five years in Manitoba, the labour record, it's been very good. So I say to the Min ister, when you read some of the stuff in the White Paper where employers of small businesses, where someone running a small grocery store in a rural area is going to be put up against Bernie Christophe, who walks in to unionize a six or eight­ man operation, I say to the Minister that will cause serious problems in this province. Where we have relatively good labour relations right now and a good clima te, that could be totally destr oyed by some tinkering on the part of the government.

Since the Minis ter is responsible for small business, and I know all small business are looking for assistance from him, hopefully he uses his persausive powers and his seniority within this New Democratic Party to put forward the plight of the small business very very forcefully . Mr. Chairman, hopeful ly, maybe the government in its wisdom - goodness knows, Mr. Minis ter, you've got enough troubles with trying to tamper with labour legislation at this time and, hopefully, you can make your colleagues see that they'd maybe just forget about it for a couple of years. MA. C. MANNESS: You can do it, Sam.

You can do it. HON. S. USKIW: Well, I just perhaps would like to ask the member to illumi nate a little more for us just what 1630

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section of that proposed legislation he is objecting to. If he is saying the whole bill, that's one argument; if he is saying certain sections, that's another argument. I simply want to say to him that we have met with the business community and we appreciate fully their view of that proposal, and due process will take its course, a decision will be made and we will debate that decision. But the member has not illustrated for us just what particular

section he is objecting to. Perhaps he would like to elaborate somewhat. MR. R. BANMAN: Mr. Chairman, I guess we could spend all night debating it, and if the government brings in a bill, we will debate it for much longer than just one evening. But the Member for Morris just raised an interesting question here with regard to a ruling from the Labour Board. If the Labour Board rules that the union is in place and intact at Sheller Globe and that the new company has to assume that former contract. Mr.

Chairman, according to some of the White Paper documents, they say the tribunal, the Labour Board is going to be given additional responsibil ities, be strengthened, and the right of appeal through the courts is going to be taken away. So now you are going to have the Labour Board rule in a case like this. If they rule that that particular plant has a contract in place, what is going to happen is the company is probably not going to decide to go ahead. The Minister says that is hypothetical.

I raised an issue the other day where a small businessman in Manitoba here applied for a Careerstart student, and because Employment Standards says he has to pay $1 3.45 an hour, he is not going to hire that student. So while you say that is a hypothetical thing, these are small things which are going to be roadblocks and stu mbling blocks in the path of a small entrepreneur. Goodness knows, the Minister knows that a guy can't travel in from Beausejour when he's got a grievance. Safeway can handle these things.

What is happening here is that the government, in their attempt to rectify certain problems, is really going to cause further · problems in other areas, and the ones that are going to suffer are exactly the small businesses and that's what we are talking about right now. Safeway, they hire a professional to handle their labour disputes; the little guy running the store in Beausejour can't do that. If he's got a grievance against one employee and he's got to come into the Labour Board, he's got to take the day off to come in here, and we could show the Minister problems that are created.

I am not concerned - the Safeways of this world, the International Nickels and these people who are dealing and know how to deal with