Manitoba Committee Hansard — 24 November 1978 (Public Accounts Committee, Sitting 2, 31st Legislature, 3rd Session)

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Manitoba — Debates (Hansard)

ISSN 0542-5492 Legislative Assembly of Manitoba STANDING COMMITTEE ON PUBLIC ACCOUNTS Chairman James T. Walding Constituency of St. Vital Friday, November 24, 1978 2:00 p.m. Printed by the Office of the Queen's Printer- Province of Manitoba

Hearing Of The Standing Committee On ime: 2:00 p.m. Public Accounts Friday, November 24, 1978 R. CHAIRMAN: Mr. James D. Walding. R. CHAIRMAN: Order please. We have a quorum, gentlemen, the Comm ittee will come to order. hen we recessed for lunch we had reached Page 5 in the Auditor's Report; is there any further �cussion on Page 5? Mr. Cherniack. �- CHERNIACK: I wonder if the Mini ster of Finance could clarify the rea soning for what was done connection with Leaf Rapids town properties. Apparently a debentur e was elimina ted by a gr ant; 1at was the reason for that? t CHAIRMAN: Mr. Craik. I.

CRAIK: I'll have to ask the accounting specialists here to reply to it. We'll get back to you that if that is satisfactory. I. CHERNIACK: Yes . . CHAIRMAN: Anything further on Page 5? Page 5-pass; page 6. Mr . Cherniack . . CHERNIACK: On Page 6, I'd like to know the basis for the Auditor's opinion of the values �5 and 3.5 million respectively for the two companies. Is that based on some kind of valuation ::le by somebody who is knowledgeable? . CHAIRMAN: Mr . Ziprick . .

ZIPRICK: Well, we' ll deal with the $45 million first of ManFor, and that was set up when the 1pany was first organized under ManF or and there was a significant evaluation made to determine capitalization, and at that time it was felt that it would be in a position to sustain $45 milli on entures. The earnings for the first year or two were of a kind that could even sustain more. I, then there was a very heavy downturn in that industry and there has been difficul ty to pay interest, and as a matter of fact it has not been paid and that $44 million that we were talking Jt before lunch applies to this $45 million.

Taking a look at the ups and downs of the industry e is still a fe eling that it could possibly sustain that $45 million and on that basis there has 1 no eval uation, or consideration, given to reduce it at this stage, but if it is pro ved that it cannot ain on a long term, then there would be no justification for it being capitalized on that s. CHAIRMAN: Mr. Cherniack. CHERNIACK: Well, Mr.

Chairman, I had nothing to do with the manner in which this investment divided between two different kinds of debentures and two different kinds of shares so I don't k with knowledge as to what went on, but I see that common shares were shown at $20 million hese fixed interest debentures at $45 million, which , of course, stand ahead of both the income preferred, and from that I would sort of think that there must have been a thought that $65 >n was a value . So I want to ask Mr.

Ziprick, has he compared his thinking about ManFor the financial statements of the priv ate industry in this fieldS I assume there are a number of 1arable companies - to see whether they have sustained losses, and if so, have they written their capital investment to the same extent that Mr. Ziprick thinks it ought to be done 81

MR. CHAIRMAN: Mr. Ziprick. Public Accounts Friday, November 24, 1978 MR. ZIPRICK: Well, in priv ate indu stry we'd looked at the operations of the various other compar and they have been in the same position, there have been substantial losses.

As far as capitalization of those other indus tries and to the extent they couldn't sustain, well the bond hole of course would be entitled to their interest or else they could start foreclosing on the compa1 o the shareholders then become involved and have to decide what they are going to d I gu1 each company works on its own position, some of them would have large reserv that they c< rely on, and the ones that didn't have large reserves would have to find their money from somewh So in this situation the government is the owner so the government is faced with the proposi of looking after the shortfall. MR.

CHAIRMAN: Mr. Cherniack. MR. CHERNIACK: Well there is a difference between picking up the deficit and writing off as and I am wondering ifpriv ate indu stry, in the same business, which have been suffering losses, 1 they written off their common shar es or are their common shar es worthless to the extent apparently, Mr. Ziprick, would wipe out the common shares as well here MR. CHAIRMAN: Mr . Ziprick. MR. ZIPRICK: I wouldn't wipe out the common shares but a matter of aluation, placing a ' on these common shares, on the financial statements of the province.

In the contex t of the accoUJ system that we are following the assets are either of a kind that they are not charged agains user, and within the present princip they are just an offset to the amount of debt. Now if th the accounting principle that is used I guess it could remain because there is obviously a det the other side and until that debt is repaid it could remain.

Once we depart from that accou1 principle and go into the net debt concept that all the assets, whatever kind they are, are bE thatdebt and we are not allocating debts, the specific debt to some specific asset, then it 111 just be wrapped up in that total. So that as far as re taining the shar es - under the present me it is an inc orporated company so you have to retain the shares to maintain owner ship - u you rearrange the corpo rate structure then I don't say that you do away with the shares. MR. CHAIRMAN: Mr. Cherniack. MR. CHERNIACK: Mr.Chairman, I must ha ve misun derstood Mr.Ziprick.

He is sa ying, and I ; with him, that the realizable value of the assets is not shown here, and he says, "except fc fixed interest debenture of $45 million the interest and principal repayment by way of sinking are being provided for from the provi nce's appropriations." So, Mr . Ziprick, you are not suggesting that the true value of ManFor is $45 million? MR. ZIPRICK: Oh, no, no. MR. CHERNIACK: I mi sread this. You are only saying that it is expected to pay off the 4 the rest of the investment is being funded out of the public debt of the province and it is statement of fact. . . MR.

ZIPRICK: Tha t's right, and it MR. CHERNIACK: . . . and it is not an opinion of value. MR. ZIPRICK: No·, and the reason for capitalization and creating a fixed charge is really � as an objective target to perform, to pay off this interest. And if you can't perform well t is more a pressure mechanism or inc entive mechanism to perform and dis close on the pro11 books what would be a reasonable amount that could be considered that will self-sustain.

In words, if the earnings of ManFor could sustain a certain amount of this debT, thenT, I thin� that tha t assessment should be made and that debt placed on it, but only to the extent is reasonable to expect that it will sustain. MR. CHAIRMAN: Mr. Cherniack. MR. CHERNIACK: No w, on the present balance sheet of the province, Page 52, is the ful ll?

!lion shown as an asset? Public Accounts Friday, November 24, 19 78 t ZIPRICK: Yes, it is in the investment. I. CHERNIACK: Yes, and therefore, it follo ws the principle which is long established of balancing � assets against the debt, the public debt? I. ZIPRICK: That's right. . CHERNIACK: And that is why you agreed to the addition of the $4 mil lion on the asset e? . ZIPRICK: That's right. .

CHERNIACK: But I don't suppose there is a recog nizable debt of the province that relates �ctly to this item of ManFor, is there? , ZIPRICK: As the money was being borr owed to advance to Manitoba Devel opment Corporation �h went on to these organizations that the Manitoba Development Corporation fu nd, it was ignated . CHERNIACK: Well then this is included in the MD C Autho rized Capital borrowing? ZIPRICK: That's the way it went. Now the debt has been all ocated to be against ManFor in detail allocation. Of course ...

CHERNIACK: So that under your liabili ty sect ion, I sup pose it ' is, somewhere you show debt 1terje ction)- public debt, that $1. 8 mil lion etc. is broken down so that you know how much ach dollar of that is allo cated to which project? ZIPRICK: Yes, it is. CHERNIACK: This would be in the accounts, would it? ZIPRICK: In the accounts, that's right. CHERNIACK: So as that is being paid off this debt is being reduced, and does that explain $.9 mil lion that was retiral of debt, I think. ZIPRICK: On Page 1, that explains . C:HERNIACK: .8 million, on page 5.

ZIPRICK: No, on Page 1 it is 6 million. ::HERNIACK: Page 1? You must mean Page 5, the .8 mil lion. �IPRICK: Well, yes. :HERNIACK: That is the explanation. :IPRICK: That's right, that's right. Sorry. :HERNIACK: So that - I mi sread this then - 45 mil lion is not your opinion of the value asset? IPRICK: That was the decision of the Board and the government at that time, that that is would be reaso nable to expect it to carry by way of ...

HERNIACK: lt would be repaid but it is not the gov ernment's opinion of the value of the PRICK: No, that was their opinion of what they wanted recovered by way of a fixed inte rest

Public Accounts Friday, November 24, 1978 debenture. MR. CHERNIACK: I'm just wondering, Mr. Ziprick, whether I just didn't follow it or whether not clearly expressed . MR. ZIPRICK: Then, of course, Leaf Rapids is much the same thing, it is the debentures that being repaid on a regular basis and that is being repaid through a levy and so there is not rr doubt that that will be recove red. MR. CHERN IACK: Is there any idea as to what is the value of Leaf Rapids Town Prope Limited? MR.

ZIPRICK: No, there was not the same kind of bookkeeping that we could arrive at the Wel l, I wouldn't know what the market value but the cost value could be established but I c have it offhand. MR. CHERNIACK: Well I'd like to leave it at that except to tell you, Mr . Ziprick, that I mis this and I thought you were impl ying that that was your opinion of the value of the two assets possi bly for next year you will have a look at that paragraph so I might not misread it ag� MR. ZIPRICK: I'm sorry, that was not the ... MR. CHERNIACK: Yes, it is clear now that I have read it again with your explanation.

I'm 1 I took the time, Mr .Chairman, but I did want to un derstand it. MR. CHAIRMAN: Anything further on Page 6? Page 6-pass; Page 7. Mr. Cherniack. MR. CHERNIACK: Mr. Chairman, again, the first paragraph of Page 7, talking about changes he under stands will be made next year. Is there any reason you are aware of, of why it COl have been made this year? MR. ZIPRICK: Is that the first paragraph? MR. CHERNIACK: Yes. You say that it would be to deduct the sinking funds from public rather than to show them as assets. That's not within your control, that's within the control c department.

Do you know of any reason why it wasn't done this year, or couldn't have been this year? MR. ZIPRICK: I don't know, other than there's a fair amount of work and I guess the Fir department was not in a position to be able to look after it all and finalize. MR. CHERNIACK: But they could have done it. MR. ZIPRICK: Oh yes. lt could have been done. MR. CHERNIACK: lt's just a question of whether they would have applied thems elves to it or able to acco mpl ish the technical part of doing it? MR. ZIPRICK: That's right. MR. CHERNIACK: There's no reason that you know why it couldn't be done otherwise?

If il - well, tha t deals with sinking funds, I misund erstood - relating back to what we were t about the asset of Manitoba Forestry Resources, if we go into Page 8 if I might just jump for a second, if we go into - I'm sorry, I don't even mean Page 8 - if we go into the new consol' basis of accounting would this ManFor be written off compl etely and not shown as an as MR. ZIPRICK: Well, under this new accounting that approach basis, you would only show ad' and investment in corporations that really self-sustain. In other words, they carry thems eh MR. CHERNIACK: All right. We'll come to that.

That's on Page 14 , I think. MR. ZIPRICK: And anything that's not self-sustaining would not be shown. Now it's not thal would n't be a record of it somewhere in our

schedule but it wou ldn't show on the face of it bE 84

a different principle. Public Accounts Friday, November 24, 1978 . CHAIRMAN: Anything further on Page 7? Page 7 -pass; Page 8-pass; Page 9-Mr . �rniack . . CHERNIACK: Mr . Chairman, I did ask Mr. Ziprick priv ately about the item of Manitoba Beef ducers 1. 8 in the, oh, about the fifth last line on that balance sheet, $1. 8 million as shown as up, and I under stand from him that this in effect - these are my words - is in an account able. lt's a payment that was not made but was charged to last year's expenditures as if made. hat correct? I'm looking at the note you gave me. ZIPRICK: Yes. Yes.

Yes, there was some delay, and Finance can elabor ate on that, about 1e of the finalization and the money was voted in that year to be used for that purpo se so that ould be possible to pay that because it was all established that it was going to be paid, at t from our review, eve rything was esta blished that it was going to be paid. lt was just a matter ming that this was shifted so that these people could get paid just as soon as some of these 1r matters could be cleared up. CHERNIACK: Is that not contrary to the practice we discussed this morning of showing cash nd out as a basis for the balance sheet?

ZIPRICK: Well, you can't - nothing is that black and white. This mechanism has been used the last numb er of years a numb er of times, and it gets down to the - the money has been d by the Legislature, it's going to be paid and it's just maybe some clearing up of some technical ils and when it gets down to that we have accepted a transfer of that kind and setting it aside e paid, so that I would say that this is not anything new, it's been done a num ber of other � in similar circums tances. CHERNIACK: Well then my impr ession is wrong.

When I thought that the books reflected cash 1d cash out up to, I think, 20 days after the end of the fiscal year, then I'm wrong. This is r cash not paid out but taken out of the Estimates as if paid but not paid. How much more at is there in this column? ZIPRICK: I'd have to check but offhand to my knowledge I don't know of any other one this but I'm sure we could -(Interjec tion)- oh, lnco's another one. That's right, lnco is another :HERNIACK: All right. What's the Health Services Commission incr ease of $18 million? The iSe is 18, yes.

Manitoba Health Services Commission? �IPRICK: That's money that they're entitled to and the province is a banker for the Health �es Commission. lt's like the Manitoba Hydro and that any surplus money that they need for diate use, for immedia te cash use, stays with the province so I don't know just what .. . :HERNIACK: Why then, Mr. Ziprick, doesn't it show up on the top, Funds Deposited for ment? IPRICK: Well, because it's working capital funds. In other words it's so short term that they're >ing to invest and the province invests some of these mone ys when it's longer term.

It'll invest � short term - they still use the money and even pay interest, depending on the length of HERNIACK: Well, are you saying that this is surplus money in the hands of the Health Services 1ission which it's turned over to the province for the province to hold in reserve.

MR. ZIPRICK: That's right. Public Accounts Friday, November 24, 1978 MR. CHERNIACK: lt was an actual payment of $18 million extra over this current year into provin1 funds out of the Commission tor the pr ovince to hold and invest short term. MR.

ZIPRICK: As to exactly where it came from, whether we'd have to determine how the c; flowed in from the various sources, but I think I point out on the next page that the province a as a banker tor quite a numb er of these agencies and because it acts as a banker you'll see th balances fluctuating up and down because it's withd rawn on the basis of the cash requireme of these agencies. MR. CHERNIACK: Well, Mr .

Ziprick, you under stand that the reason I've asked these questi are related to the beef producers where indeed the province was not a banker for anybody ; therefore by your saying that it thr ew all the others into doubt in my mind because since the provi was not a banker for the Beef Producer Assurance Plan then there must be a great, you kn there's a possibility that others like that. .. so if you don't have the answers now could I ask to give us a breakdo wn of that column to see the extent to which the province was a banke1 the province was really postponing payment as an account payable just as I bel ieve it die connection with the Government of Canada.

MR. ZIPRICK: I was just told that this arises through the cash flow from Canada in the phase See prior to that, to the new agreement with Canada, the Health Services Commission was get its cash from the province and from Canada and there's a substantial amount receiva ble from Can that was coming in as and when the various claims were clear ed . Well, I'm told that this is a over of money received from Canada in the clean-up. MR.

CHERNIACK: Well, does that mean that Canada during the fiscal year we're dealing with 1 in an extra $18 million to the province for the Commission and the province didn't pay it to Commission but put it into this reserve? MR. ZIPRICK: The arrangement that was made with regard to the Health Services Commis� it was spelled out right in the Health Services Commi ssion Act, that mone ys from Canada 1 not to be taken into the province's reve nue consolida ted fu nd, tha t they were to be paid din to the Commission.

Now, dir ectly means that they would come from the province, were put in trust account, and then paid over to them as it was need ed . MR. CHERNIACK: So this $18 .6 million was never shown as rev enue to the Provinc1 Manitoba? MR. ZIPRICIK: The money coming from Canada under the arrangement was never taken rev enue. MR. CHERNIACK: That's very clear. I don't want to go over each of these items separately. Chairman, as long as Mr.

Ziprick would agree to review each of them and explain the nature, what I'm really getting at now, since I think that this producers' assurance plan was another exa of a sett ing up of an account payable of moneys that the province had which it did not pa) but put into a separate fund and charged to that year's expenditures. I understand what happ· with the Inca and now with Beef Producers. I'd like clarification of the balance of that column to ensure that I under stand them. If Mr. Ziprick will give that to us in due course, I wouldn't to hold up the . 86

Public Accounts Friday, November 24, 19 78 . ZIPRICK: All right. We'll review this and provide the particulars as to what's behind it . . CHERNIACK: Thank you. Mr. Chairman, may we also go back up to the top item, Flyer Jstries, $6.4 million. Is that a long term investment, that Flyer really didn't need the money and e it to the province and said, "Invest that for us long term?" . CHAIRMAN: Mr. Ziprick. ZIPRICK: I don't know. Maybe Finance would be more up to it. As far as I know it's just that money was not needed.

Now, of course, I guess on long term depends on how fast they up and gear up for additional business as to how soon they would need it. lt could well be ey continued to de-escalate their operations that it would never be needed. That would be my erst anding but obviously with additional business now I'm sure that they will need it. CHERNIACK: The reason I said long term is because you, Mr. Ziprick, explained that the beef lucers are at the bottom rather than the top because that's short term as compared to long t so could we get clarification from the department?

ZIPRICK: As far as I under stand the investment is tha t it's really an investment; this other st working capital to be dr awn down any day so a long term does not mean years, it can be ths, but it's requested or pla ced for investment, but I guess Finance could provide proper CHAIRMAN: Perhaps Mr. Curtis can answer that. CHERNIACK: I have just one other question. CHAIRMAN: Go ahead .$ CHERNIACK: Is the Flyer Indus tries indebted to the province by way of advances? ZIPRICK: Not dir ectly, but through MD C. CHAIRMAN: Mr.

Curtis. ::URTIS: Yes, I think all of the items shown on this, we're talking about this table at the top ! page, relate to situations where the agency or corporation has funds, usually on quite a short basis, that it wishes to invest and is required, in most cases by their own act, to invest through linister of Finance. ::HAIRMAN: Mr .

Miller IIILLER: Is it corr ect to state that as of March 31, 1978 Flyer lnduttries had a surplus of nillion in cash money that they then turned over to Finance to invest for them and, you know, light of all we've heard about Flyer, I'm wondering how come they had this sort of cash surplus in fact they've been receiving advances all along, or pr etty consistently, because they needed 1g capital, and yet here they have a $6.4 million surplus which they are turning over to Finance est? 1 find that strange.

If they had that kind of money could they not pay back some of the ces? :URTIS: Well, I think in most cases, and I think that it was true in this particular case, that a short term position and they didn't need it to pay off suppli ers as materials became available. �uld find out what the source of this particular amount of funds were. IILLER: Yes, I'd be curious to know.

MR. CHAIRMAN: Mr. Cherniack. Public Accounts Friday, November 24, 1978 MR. CHERNIACK: Would Flyer be eequired by some legislation to inv est through the Min ister Finance rather than give the money back to the MD C to which it is indebted, I assu me, and expe to dr aw from the MD C when it needs it. MR. CURTIS: I'm not sure about tha t specific one. We'd have to check the act but in many cas1 probably in most cases, the Crown corporations are req uir ed to invest their surplus cash throu the Mini ster. MR. CHERNIACK: But is Flyer Industries a Crown corporation dir ectly owned by the Crown or it owned by MD C? MR.

CURTIS: No, it's through MD C but MDC has the requirement to invest the surplus cash the province MR. CHERNIACK: Yes, that's why I'm wondering why it isn't shown as ... if Flyer had surpl why didn't it pay it back to MD C to whom I assume it's inde bted and the MD C then could, I da know, pay the bank or pay the Minis ter of Finance what it ma y owe the ... I don't know. MR. CURTIS: Well, most lik ely because they needed the cash very shortly to pay off suppli ers. MR. CHERNIACK: Well then that sort of contradicts Mr .

Ziprick's im pression as to long-range � short-range as between the funds deposited for investment and the reserves working capital, E How then does that Flyer Industries compare with Manitoba Beef Producers as being in two differ categories? MR. CHAIRMAN: Mr . Ziprick. MR. ZIPRICK: I f I may comment on this. As I und erstanf it, the items below are really equival to a bank that's being dr awn on, could be dr awn on daily,

whereas the other item, let's say and I'm just going by recollection - but I think that Flyer in collecting some of the hold backs the buses had all of a sudden a substantial amount of cash that they didn't need let's say fc month or two, or maybe three months, it was a question of just go through the process of cancel out advances and then re start up the whole cycle or deposit it in an investment account of nature and then draw down straight forward and finance your proposition.

Now, I appr eciate what you 'r e sayi ng, that Flyer maybe technically doesn't have to put mo into them with the Min ister of Finance but we don't take too kindly to these organizations inves on their own because of their substantial involvement, we want to see the money come to Fina and be used by Finance in the run of things and then they dr aw down as and when they n it. MR. CHERNIACK: Well, this first sec tion, Funds Deposited for Investment, are there spe1 investments made for th the specific corporations. Like, is there a recog nizable investm debenture, stock, or some thing? MR. CHAIRMAN: Mr . Curtis. MR.

CURTIS: No, what we advise ... this is included in The Financial Admin istration Act, provi whereby if a Crown corporation or agency has cash and either has to, or wants to, invest thra the Mini ster of Finance, then the fact that he has deposited the money with the Minis ter at qu arterly rate that's ascribed by the Min ister, is deemed to be, and is an invest ment. 88

Public Accounts Friday, November 24, 1978 �- CHERNIACK :Okay, that's fine. How does that compare with say the mining community 1erve at the bottom? Is there a different interest rate paid? I. CURTIS: Yes. t. CHERNIACK: You mean the province pays a different inter est rate. Which is higher and which ower and what's the reason for the differential? :.ZIPRICK: The interest rate is established by the Department of Financ e. and then that's . CHERNIACK: Which interest rate? .

ZIPRICK: All interest allowable on these accounts is established by the Department of Finance I app roved by the Minister of Finance in accordance with the Financial Admini stration Act . . CHERNIACK: So if it's funds deposited it will get one int erest rate and if it's called a reserve, king capital, it gets a different interest rate . .

ZIPRICK: That's right, that's right, and the method of dete rmining the interest rates is more ess foll owed along the same lines as the banks and these people putting in the money in here get about the same rate of return as they would working through the bank, so they have no 1plaints and it's beneficial to the province as a whole to have that money here. So this is the 1 be hind. it. CHERNIACK: How come the Hydro-Electric Board is shown on each sec tion, the top and the om?

ZIPRICK: Well, the Hydro-Electric Board would have some money that would be dr awn on then some, maybe there was an im mediate borrowing that's really only passing through and money that's passing through would be the ooney that would be below; the money up above Id be the ... CHERNIACK: Well, Mr. Ziprick will be giving us an explanation for all those in the bottom ion. ZIPRICK: Yes, okay. CHERNIACK: And I under stand Mr. Curtis will give us an explanation for the Flyer Industries is that right ? CURTIS: Excuse me, you want the source of the funds? Was that the question?

CHERNIACK: The source and the reason for it being invested up above and not below. CURTIS: Okay, I can tell you the ... CHERNIACK: And for how long, how long you had it. CHAIRMAN: Any further questions on Page 9? If not, Page 9-pass; Page 10 - Mr. 1iack. ::HERNIACK: Mr. Chairman, is it the intention of the government to start showing the market of the Canadian dollar as at the year end to show all the long-term indeb tedness of the 1ce? ::HAIRMAN: Mr. Minaker. 111 1NAKER: Mr. Chairman, I think Mr. Curtis will comment on that one. ::HAIRMAN: Mr.

Curtis. :URTIS: We've reflected the evaluations in the Public Accounts on a compar ative basis to AQ

Public Accounts Friday, November 24, 1978 show what the differences are as a result of the exchange. One of the things -(lnterjection) Page 244, I'm sorry. One of the items that is under consideration for amendments to the Fina Admin istration Act is the question of taking up the foreign exchange difference and there has 1 a very clear -(Interjec tion)- 244, yes. MR. CHE Wrong year. lACK: I've only got 242 pages in this one. No, it's okay, 1 looked a wrong year. MR. CHAIRMAN: I'm not sure who had the floor there. Mr. Curtis. MR. CURTIS: Thank you.

And one of the things that we have raised, or intend to raise in the is the question of taking up the difference between the foreign exchange value at the date c balance sheet and the original amount of dollars taken in against the foreign exchange. So as of the deba te that we intend to have under the Legislative changes is that particular question. l has been a very strong dir ective, or requirement, put out by the Canadian Institute of Char Accountants which is in favour of picking up the difference in the foreign exchange in a CE way of calculating it over the life of the outstanding debt. MR.

CHERNIACK: Can the Institute of Char tered Accountants decide how government ... ? MR. CURTIS: Well, they're making reco mmendations, I say. We don't have to ... MR. CHERNIACK: Are those reco mmenda tions to government or are they to overall fin' state ments? MR. CURTIS: These are specific ones towards government. MR. CHERNIACK: I see. MR. CURTIS: Canada this year has made tha t adjustment. Ontario, I think is looking at i I think other provinces are as well. MR.

CHERNIACK: So it would then be an annual statement which would be changing fr01 to day but it's just for a whole year you will have one statement that is related to one date year. MR. CURTIS: Yes, and rather than being the original amount of Canadian dollars receiv ed, be the amount of Canadian dollars that would have been received at the end of that year. MR. CHERNIACK: I'm sorry, I don't understand that. MR.

CURTIS: Well, if I can explain it very quickly, and probably not very well - at the ' each year there has to be a difference one way or the other as between the foreign exchang or value as at that date of the original debt. In other words, if on day one you borr owed $1 in American dollars, if you were to pay it back at the end of the next year, you might have back $1, 250,000, so there's a spread or a difference of $250,000. Now if that's a 20-year and there's 19 years left, the presumption is that you would write off 1/19 th of that $250,00 the remaining 19 years.

Now, at the end of the next year, there's 18 years left and perha American dollar has weakened against the Canadian dollar, so you're actually making mone) were paying it off at that date. So you take the credit and you would amortize that agail balance of the 18 . years. MR. CHERNIACK: But you'r e really diddl ing ar ound, aren't you? lt doesn't help you know an does it? -(Interject ion)- MR. CHAIRMAN: Just one at a time, gentlemen, please. I think Mr. Curtis had been asked a q there. MR. CURTIS: Well, we're not really trying to diddle ar ound.

What we' re trying to do, or the of it is that you're reflect ing in each of the years an amount of profit or loss that could be a: to that particular year. Now it may never happen. 90

Public Accounts Friday, November 24, 1978 III R. CHERNIACK: What do you mean, may never ? lt will never happen. III R. CURTIS: Wel l, it may never happen in that amount. You may ... worse or better. �R.

CHERNIACK: That would make sense if we were a commercial corporation that could go 1ankrupt, then I could understand sayi ng, if we had to pay all our debts today, what would it cost s in order to know what our balance of assets would be, but since a government does not go 'ankrupt, then what's the advantage of knowledge to anybody to say today's dollar is worth X dollars rhen we don't have to pay it for 18 years - and God kno ws what it will be tomorrow much less 8 years from now? That's what I said about diddling around.

I mean it gives you information which 1 of no real value in asse ssing the abil ity of the province to repay that bill 18 years from ow. IR. CURTIS: Well, as you know, our debt is largely payment at the last date - it's a bullet payment -and if you were to pay off all the debt plus a major amount of foreign exchange loss, then you ·e ascribing that one year a very large amount that would have to be taxed for, it would have 1 be raised in that one year. R. CHERNIACK: When would you have to do that? R. CURTIS: Well, it depends on the length of the debt. If it's a 25 year debt .. . R.

CHERNIACK: Well, that's what I'm sayi ng. R. CURTIS: . . . then that would have to be done at the end of 25 years but if it was a 5 year 1bt, then you'r e looking at it as being perhaps a major additional payment at the end of the 5-year 1ri0d. �- CHERNIACK: Well, wouldn't it make sense to show the amount at par value - or not par the foreign exchange rate would be for what has to be repaid in the coming year say.

That's neaningful thing because you know that next year we're going to have to pay back the money d as at today, which is not that far away from this coming year, the exchange rate is so much, t if you're talking about 20 years from now, then it means tha t every year you'r e going through ) exercise of arriving at information that's not meaningful. I want to make one more point, and that is that when you have had this kind of argument before :l those brilliant professionals that Mr.

Craik referred to this morning always said, "Well, you can't tlly look at an exchange rate without looking at the interest rate you'r e payi ng." Like, you 're >wing here Swiss francs, Canadian dollar book value $302 mi llion - I assume that's what we eived for 705 francs over the years - and now you're saying it's value today is $442 mill ion, ich would appear to be $14 0 million more than what we borr owed in the equiv alent at that time. : if that's a 10 -year loan, we don't know what it will be like in 10 years and in the interval, we know that the interest rate is probably less than half of what it would have been had we borrowed :mother market.

Is that correct? . CURTIS: Except that if the rate of exchange is higher, then the int erest is now costing more :ause the rate of foreign exchange is higher. . CHERNIACK: The annual interest. . CURTIS: The annual interest. . CHERNIACK: Of course, and you show that, that's reflected in your estim ates. You do in your mates, I assume, calculate the int erest you have to pay in this year on the basis of current CURTIS: That's correct. CHERNIACK: . . . exchange rates. Then that's okay.

But if you want to reflect to those ·tered accountants, e, who know so well how to advis what is the true picture, should they not N that this debt is not repayable for 20 years and during that time the province will have saved dollars in interest rates as compared with having bo rrowed it in another market, if they could ) gotten it in that market, sett ing aside the whole question of inflation which is also a factor, 91

Public Accounts Friday, November 24, 1978 isn't it? Because as inflation goes up so it's cheaper for us to repay. Now, what I'm sugges ting, Mr. Chairman, and not dir ectly to Mr. Curtis, probably more to 1 Auditor who is concerned with the overall picture to the public, is that if you do this thing, wh he says the government is going to do this year, then ... no? I thought he said that the governm1 intends to do it. MR. CUR TIS: lt will be attended to ... MR. CHERNIACK: This matter will be attended to during the current fiscal year.

If it's to be d< the way this Page 244 shows, then isn't that a distorted picture in that it only gives one featl and discounts inflation which I think could be built in already as of today, and dis counts inter rate which could be reported, but isn't. MR. CHAIRMAN: Mr. Ziprick. MR. ZIPRICK: Just to clarify, I make an observation here that wha t they were going to do is in this premium amount into the total debt which will then reflect all the debt at the amoun cash received, there'd be no translation.

Right now there's two kinds, the offshore money is recor at exactly the amount that was received; the borrowings in the United States are transla ted the Canadian dollar in the pub lic debt amount, and then this premium and Uni ted States accc is the difference. What I was saying and sugges ting - and I unde rstand that this is being considE - is to move that item into the public debt and then all debt will be stated on the same b1 and that's all this applies to. MR. CHERNIACK: Well, when you'r e saying "stated on the same basis" you don't mean on basis of today's foreign exchange rate? MR.

ZIPRICK: No, this is another issue, and I d completely agree with what's being sug gested here. So if we get into that debate I'd like to, know, present my view but it's got nothing to do with combining this $9 milli on with the p1 debt. By combining this $9 mi llion with the public debt we would be doing the same thing we're already doing with offshore and it would be all stated at the dollars realized at the tim borro wing. MR. CURTIS: At that point in time. MR. CHERNIACK: And that you recommend? MR. ZIPRICII<: Yes, I recommend that. MR. CHERNIACK: Is the government going to do it or not, or don't we know? MR.

CHAIRMAN: Mr. Curtis. MR. CHERNIACK: I don't know if he's going to speak on polic y. MR. CURTIS: No, 1 was only going to make the point that we have dra fted the legislation 1 provides for tiis format, based on the rec ommen-dations of the Canadian Institute of Char Accountants, but it hasn't received government approval yet, and the request was that it first to this comm ittee before it's reviewed finally the govern ment. MR. CHERNIACK: The government wants our opinion on it. MR. CUR TIS: M'h m. They hav en't app roved of it nor disappr oved of it. This is a departn recom mendation. · MR.

CHERNIACK: That is the point that Mr. Ziprick is making about showing the actual Car dollar received from each borrower. MR. CURTIS: M'h m, that's what he want to get ... MR. CHERNIACK: Now what about this other . . . ? MR. ZIPRICK: I think what Curtis is also mentioning is the translation too, the whole iss 92

MR. CURTIS: Yes. Public Accounts Friday, November 24, 1978 MR. CHERNIACK: Oh. Oh, so that's not government policy uut you do publish it in the statement, that is government policy then? !II R. CURTIS: Well, we've merely shown that for information. Are we talking about the one on 244, 'm sorry? IIIR. CHERNIACK: Yes. lt'IR. CURTIS: Yes, it's for information only. IIR. CHERNIACK: Is that new? IIR. CURTIS: Yes. IR. ZIPRICK: That's new. JR. CURTIS: lt's just to show the reader what the im pact would be if ... IR. MILLER: ... if we had it paid all off today. IR. CURTIS: That's corr ect. R. ZIPRICK: That's the point. R.

MILLER: Mr . Chairman, so there are two issues here, one, the Auditor is sayi ng, why not treat Niss francs the same way as American dollars, and I won't quarrel with that because that is at e time of issue you that that decision is made. You know how much got in 19 77, whether you >t it from New York or you got it from Zurich, and you make that adjustment, that's one issue 1d Mr. Ziprick has addressed hi mself to that.

Now we are getting another facet of it and that's the Institute of Char tered Accounts who say at every year an adjust-ment should be made on every issue, even though it may be 18 or 20 25 years away for repayment, to reflect the value of what that issue might cost you if you had pay it off that year, which of course you don't have to do. And as I see it, what you'r e going have is sort of an up-and-down affair from one year to the next.

I rec all, as I'm sure others do here, in 19 76 when the Canadian dollar was higher than the American d then suddenly it slipped, then it went back, and then it slipped down again, and now it's down about 15 cents. So, really it's not a matter of tinkering, I think it's very deceptive and very slead ing to somehow transl ate or to show a public debt based on an exchange rate which really esn 't come into play except for the interest that has to be paid that year, the coupon that has be redeemed that year, and that I can see does have to reflect any exchange rate.

But if it's t due until the year 20 01, then surely the value of it is what was esta blished at the time of the rrowing because we have no idea whether in the year 200 1 the Canadian dollar may be changed 1siderably from what it was when you first took out the loan, to what it is today. And to, in between, ke annual adjustments is like a roller coaster and it could be like a roller coaster.

You know March 31s t, if you use that particular valuation day, it could look very good or very j, and so the public debt could be escalating up $20, $25 million every year when it's a paper Jre, it's not being repaid in those years anyway. So, just to Mr .

Curtis, I'm curious that the >artment would even go along with this notwithstan ding the Institute of Ch artered Accountants I don't know what reason they had it or why they would put it forward - but to me it's really :leading and I don't think it helps the accounting at all. lt simply would show a public debt varying netimes, from year to year, by 15 percent, when it's a paper figure and there's no meaning 1tsoever . . CHAIRMAN: Mr. Mi naker. . MINAKER: Mr. Chairman, I wonder if I could get clarification for myself and maybe for other nbers of the commit tee from Mr. Curtis, because in listening to Mr .

Miller's comments - and rbe he can correct me if I'm wrong - my und erst anding of what you said was that if, an example, e had borro wed a mil lion dollars, and today because of the exchange rate we would have to back $1 ,250,000 . . . 93

Public Accounts Friday, November 24, 19 78 MR. CURTIS: Yes, then you have to show it. MR. MINAKER: . . over a five-year period, that my under sta nding is we would only show one-fit of the difference. MR. CHERNIACK: No, but it's payable this year. MR. MILLER: it's payable this year. MR. MINAKER: And it's payable now, if I'm wrong I would like Mr. Curtis to correct me becau it's quite different from what you'r e saying, that we would show that we have to pay $250,000 ma back and show it as a debt. MR. MILLER: Well, what I und erstood from Mr.

Curtis is that the borrowing that took place, le say, in 19 75, let's say the Hong Kong dollar -15 0 million Hong Kong dollars which transl ated $33, 517 milli on in Canadian funds - so I can see Mr. Ziprick sayi ng, "Well, why don't you trE that as you would a New York issue? " I can under stand that, but it's done at the very incepti of the loan, and you do it. But I un derstood further from Mr .

Curtis, that it is the intention or t desire of government to consider that the debt of $33 million, that loan, should reflect the differen in the exchange rate as if it's being paid off that year, when in fact only the interest is being p< off that year. MR. CURTIS: Perhaps it's my explanation of it. If you take the Hong Kong dollar issue as example, there is a spr ead of what? roughly $3 .5 million. MR. MILLER: Right. MR. CURTIS: And if there were say seven years left, then you'd be taking one-seventh of tl amount showing as an expenditure in your expenditure statement. MR.

MILLER: Yes, but what happens next year when the Canadian dollar moves in relation to Hong Kong dollar? MR. CURTIS: Then you have another difference. MR. MILLER: That's what I mean. MR. CURTIS: Normally you have a difference. MR. MILLER: Every year you have a difference. MR. CURTIS: And we have to calcu late each issue enti rely separately. MR. MILLER: That's right. MR. CURTIS: But next year you'd have wh atever that difference was amorti zed over years. MR. CHERNIACK: Is the Hong Kong dollar payable . . MR. CUR TIS: Well, no, I'm just saying wh atever it is. MR.

CHERNIACK:· Is this loan pay able, principal and interest, annually? MR. CURTIS:: I think that's what they call a bullet one as well. MR. CHERNIACK: A bullet? MR. CURTIS: I think it is. MR. MILLER: it's a bullet, yes. MR. CHERNIACK: Well, then if that's the case then there's no sense in doing one separa 94

Public Accounts Friday, November 24, 19 78 V'IR. CURTIS: Well, the whole object of the exercise really is to try and pay off or amortize the :osts of your debt, like the interest and the exchange costs over the life of the debt, and that's vhat this is trying to accom plish. IIR. CHAIRMAN: Mr. Ziprick. IR. ZIPRICK: This is the part that I just don't unde rstan d.

We don't amortize the repayment of he debt over its life, but we amo rtize the discount, and it's to me a highly inconsis tent approach. 1 the government's method of acc ounting we don't amortize, and we don't operate on the same •asis as the commercial people who charge deprecia tion, amortize to arrive at a total cost. In this ase, we would be amortizing discounts but not amortizing anything to repay the debt, which to 1e just doesn't make any logic. IR. CHAIRMAN: Mr . Curtis.$ IR.

CUR TIS: Well, on the other hand though, we do provide for sinking funds for the orderly �tirement of debt, and this is really another part of providing for the orderly retirement of abt. R. CHERNIACK: You mean, your sinking fund would be related to the annual value? R. CUR TIS: Well, the sinking fund is what you're prov iding for the repayment of debt over the ng term, and this would act as the same kind of an adjustment or payment or provision for a ·esumed variation in the foreign exchange rate. R. MILLER: The sinking fund is a percentage of the debt. �- CURTIS: That 's correct. :t.

MILLER: And it's estab lished, whether it's 3 percent or 1 percent, or whatever it is, you set a sinking fund to help retire that debt, and in 20 years there's money in that sinking fund. This a paper figure. This is an exchange rate which fluctua tes and could you tell me that in 19 80 � Canadian dollar, in relation to the Deutsche mark, is going to be of such and such a figure �re's no way, if you can let me know, I'll gamble on the market. t CHAIRMAN: Order please, just for a moment. Mr.

Curtis mentioned that there was some 1islation prepared that has not yet been adopted that the government wanted considered by this nmittee. Perhaps Mr . Minaker can advise me whether it will be brought formally before this nm ittee so that we can have a discussion, or whether this dis cussion we're now into will be 1sidered the will of the comm ittee? If it's the former then we're li kely to dupl icate the dis cussion 're now havi ng. Mr. Minaker. 1. MINAKER: Mr. Chairman, my understanding in talking with Mr.

Craik was that we would follow �format of dea lin g with the Auditor's report and then the Public Accounts before us, and obviously ·re not going to get through both of those items today, I wouldn't think, that then there would another meeting to deal with possible changes in the Act at a later meeting . . CHAIRMAN: I assume from what you're saying then, that there will be a sort of either a dr aft slation or a proposal put before this comm ittee for its opinion . . MINAKER: Yes. Can I make one other point?

We had planned to, at that particular meeting t is discussing the legis lativ e changes that are pr oposed, provide members of the comm ittee 1 the opinion of the committee that recommended this through the Canadian Council. . CHAIRMAN: Since we are to have the discussion at some later date do members want to tinue with it at this stage? Mr . Cherniack. CHERNIACK: I don't really want to continue it, I want to establish a few things, firstly, CHAIRMAN: Go ahead. Q5

Public Accounts Friday, November 24, 1978 MR. CHERNIACK: . .. on Page 244, this type of statement has never appeared before in th• accounts, has it? Then I have to assume that it's government polic y to have included this. MR. CHAIRMAN: Mr. Mi naker. MR. MINAKER: Mr . Chairman, my und erstanding is, if Mr.

Cherniack wants to call it governme11 policy, that the Finance Department came out with their pu blic accounts, our government's account! listing this as information, I guess you could say, yes, it was, but it has not been incorpor atec In my und erstand ing any of the discussion that we talked about has not been incorpo rated anywher else into the accounts. This is just for information and it was felt that it would be useful to all member of the Leg islature and the public of Manitoba. MR. MILLER: That's a harbinger of the future. This is not something we're going to be doing ne; year. MR. CHAIRMAN: Mr.

Cherniack. MR. MINAKER: I can't answer that, Mr. Mi ller, sorry, MR. MILLER: Well, you're the government. MR. MINAKER: No, I'm not. MR. CHERNIACK: That statement by Mr. Mina ker is clear and fair enough except that I think th this statement doesn't give enough information to make it meaningful. And my criticism of givi1 insufficient information is that it's liable to be dis torted , and the points I make are similar to wll Mr.

Ziprick has said, and I add to that that the interest rate benefit is not shown, and ought be as counter -balancing, because many times we knew, in our time and I assume the pr esent Mi nis1 has the same kind of consideration in his mind if he is still borrowing money, that when you born you have several factors and one is a low interest rate as com pared with the risk on exchan rate. And this doesn't reveal it, and therefore, I think that this is not helpful but damaging an1 wi ll, when we come to it, critici ze the government for including this statement as information.

E what I would like to do is to invite Mr. Ziprick to give us a little piece of some kind in preparati for that discussion that will take place later indicating what his reaction is to this kind of a stateme would that be a fair request? MR. CHAIRMAN: Mr. Ziprick. Mr. Mi naker. MR. MINAKER: I wonder, Mr. Chairman, if I could just, before Mr. Ziprick comments, I want inform Mr. Cherniack that we would convey your concern about the fact that this interest ben information wasn 't included on to the Mi nis ter so that it can be considered. MR.

CHERNIACK: Well then may I add also the fact that a lot of this money is very long tE and not repayable and there may be an inflation factor or other factors. Mr. Ziprick said that could give us that and I think it would be helpfu l. MR. CHAIRMAN: Anything further on Page 10? Mr. Cherniack. MR. CHERNIACK: lt so happens that looking at 244 may in some way answer the question I dealing with direct pub lic debt - and here I must say, Mr. Chairman, that, again, because o1 inadequa te understanding of terms I misread this.

I mistook the expression 'dir ect public debt' ' the expression 'dead weight debt' and I have to thank Mr. Ziprick for pointing out to me that di public debt, as indi cated here, includes mone ys borr owed by the province for, and on behal1 Crown agencies and therefore a certain amount of this debt is self-sustaining debt which Hl will repay or Telephone or whatever.

So I was going to, and I do ask, whether this could be brc down or whether it is already broken down some where to show how much of this was a self-sustai debt as compared with dead weight, and I am wondering whether the footnote, or the note at bottom of 244, gives that answer because I don't know what that means on 244, the Alloc� of Rev aluation, I don't quit e apprecia te that. If it has nothing to do with it then we will corn it again later on. So, the question then would be ... MR.

ZIPRICK: lt has a relationship of how much of that total debt appl ies to Hydro, how n to the Telephones, and how much to the province.

Public Accounts Friday, November 24, 1978 �R. CHERNIACK: 244? -(Interjection)- No, it says 'foreign currency'. •R. ZIPRICK: Well, foreign currency, but naturally it is related on how much foreign debt is applying ) whatever organiza tion. IR. CHAI RMAN: Mr. Mi ller. IR. MILLER: Yes, but is it the guaranteed or is it the direct ... How does it relate to the gu aranteed r dir ect that is the question? IR. ZIPRICK: Well, I think that this is where the difficulty is. As far as I am concerned the gua ranteed 1d the dir ect are basically all one and the same thing.

In some ins tances paper corporations have aen created just to reflect a guaranteed position which doesn't ha ve any meaning in su bstance, > really the title on that debenture is basically influe nced in the American market because the utilities lve a high er profile, at least this is my unders tanding, and the utilities have a higher profile in 1e American market so it is better to put the tag 'Hydro' and follow through.

But, other than these nd of things I make no distinction between the dir ect and guaranteed, there's some in the Jaranteed debt that is wholly, or so completely funded from the Consolida ted Fund that there is > appreciable difference; there's some in the dir ect debt; vice versa there's some in the dir ect lbt that is fully serviced through the users and also in the guaranteed, so really the two have be looked at together. R. CHAIRMAN: Mr. Curtis. Mr. Cherniack. R. CHERNIACK: Mr.Chairman, I wonder, just before Mr . Curtis, could Mr.

Ziprick explain what 1aranteed debt of the Province of Manitoba is funded out of Consolida ted Revenue? �- ZIPRICK: Well the Un iversity of Manitoba Gu aranteed Debt, all the . �- CHERNIACK: You mean the province borrows for the un iversity and guar antees the bt? �- ZIPRICK: lt borro wed for the un iversity and guaranteed the debt and that debt is completely rviced by the Province of Manitoba from the Consolida ted Fund. t CHERNIACK: I don't recall that the univ ersities borrow money dir ect, guaranteed by the )Vince, I don't recall that. l.

ZIPRICK: They haven 't for some time but some years ago they did borrow, I think, roughly >und $25 mill ion, it's still outst anding and that's a gu aranteed debt that is fully serviced from 1 Consolida ted Fund. All the public school debt for the most

part is serviced from the Consolida ted 1d. In other words, to build schools,all the debt to build schools is all CPP debt, money from ' Government of Canada, it is gua ranteed by the province but it is serviced from this Consolida ted 1d, except those little bits, the building is built a little larger than is permissible by the province, 'n that portion would be serviced from a special levy. :. CHERNIACK: You mean the CPP is not bor rowed by the province, it is borrowed by the Public 1001 Fina nce Board? .

ZIPRICK: Most of it has been assigned to the buildin g of schools so it has been put in the ne of the schools and guaranteed by the province . . CHERNIACK: The schools owe it to the CPP then? . ZIPRICK: That's right. And the province is holding a debenture from the school, but, in effect, province funds all the principal and interest ... . MILLER: Except for 20 percent, which, you know in an 80/20 Foundation Program, then 20 ::ent of the funds are from the Foundation Levy ... .

ZIPRICK: No I think that capital does not come into the Foundation Program, the capital to extent that if the buildin g is app roved by the Province of Manitoba it is wholly funded by the 97

Public Accounts Friday, November 24, 1978 province, and only that portion that the school wants to build extra, and is not permissible by the province, tha t they can tack on and then it is funded through a special levy. My understanding is that there isn't very much of it, that most of all the construction was within the authorized amount of the province and to that extent it is fully funded by the province. MR. CHAIRMAN: Mr. Curtis. MR. CURTIS: Mr. Chairman, I just wanted to respond to Mr. Cherniack's earlier question. I bel ieve the question was that he didn't under stand the little subsection on Page 244.

The intention of that was for the other problem, I think, that you had in that dir ect debt includes debt borr owed for Manitoba Hydro and Manitoba Telephone, so we took the two together, the dir ect and guaranteed , and ascribed the debt to the Hydro sys tem, the Telephone system, and the balance to the province. MR. MILLER: Dir ect and guaranteed? MR. CURTIS: And guar anteed is included in that bottom figur e. MR. CHERNIACK: I'm sorry, I don't understand the 452 mill ion. MR. CURTIS: The calculation of it is if you take the . MR. CHERNIACK: Foreign currency only. MR.

CURTIS: . . . difference between the two sets of totals . MR. CHERNIACK: If you remove the Canadian dollars, is that it? MR. CURTIS: That's right, this is only the foreign exchange part. MR. MILLER: Oh, I see, American or offshore. MR. CHERNIACK: I see, I see. MR. CURTIS: That's right, that is only the foreign exchange amount. MR. ZIPRICK: That's the difference between the 2 billion and 6 million, and 2 billion 250 .. MR. CHERNIACK: No it isn't. MR. ZIPRICK: Isn't it? MR.

CURTIS: No, if you take the two sets of totals, the dir ect total and the gua ranteed total, you add them both together then it is the difference between the two sets of columns. MR. CHERNIACK: Then the difference is. . . MR. CURTIS: I just worked it out to make sure it worked out. MR. CHERNIACK: Thank you. We still don't have the information as to how much of the dir e, public debt is self-sustaining. There must be somewhere, I am sure there is somewhere, but is read ily available? Mr. Ziprick has a breakdown of dir ect public debt of 1. 87 milli on dollars. MR. CURTIS: Yes. MR.

CHERNIACK: How much of that is Hydro, how much Telephones, how much public school which he is quite right in saying that's really dead weight. MR. CURTIS: Well, we can easily find that, we have those figur es I'm sure. MR. CHEIACK: Could that be given to us? Thank you, no rush. MR. ZIPRICK: lt's Page 245, 1 think, that by and large it's explained there. Nominal Self-sustainir

Public Accounts Friday, November 24, 1978 md Other. I think that some are technical switches but by and large that shows the Hydro and he Telephones are the main ones and that shows up. 11R. CHERNIACK: Is that it Charlie? �R. CURTIS: Yes, it shows the allocation of the direct debt. On Page 244, the next page too, is shown as 1, 907. IR. CHERNIACK: But this doesn't seem to include ... I see' nominally self-sustaining. IR. CHERNIACK: I'm looking for public schools. IR. ZIPRICK: Well, it is in guaranteed, this is dir ect schedule, public schools is in the gu aranteed ) you won't find it there. IR.

CHERNIACK: Thank you, Mr. Chairman. R. CHAIRMAN: Any further discussion on Page 10? If not, Page 10- pass; Page 11 -pass; Page !-pass; Page 13- pass; Page 14. Mr. Cherniack. R. CHERNIACK: In this reconstituted Balance Sh eet where would ManFor appear, Mr. prick? �- ZIPRICK: lt would appear behind the net dett. t CHERNIACK: 686? �- ZIPRICK: 686. t CHERNIACK: And to what extent does it appea there, the total? l. ZIPRICK: All except the 45 million. 1. CHERNIACK: The 45 million appears where? :. ZIPRICK: In the Advances to and Investments in Crown Agencies . .

CHERNIACK: I see. 45 mil lion which is the interest bearing debentare, but not the income >en tu re? . ZIPRICK: No . . CHERNIACK: Not preferred share. Is that an arbitr ary division by you or by the Department =inance? ZIPRICK: No, when the capitalization was being worked out it was felt at that time that 45 on, with a fixed debenture, it would be reasonable to consider as receiving that.

Now, the income enture was established in case the earnings were higher rather than having to declare a dividend make a big issue about a dividend declara tion, the income debenture could be invoked and 1ey could be dr awn down to the extent earnings were made to the Provincial Treasury.

So it just a mechanism to avoid declaring dividends on either preferred or common shares, so that e was a fe eling, at that time particularly and they were very good years, that probably the earnings Id be more than 45 million, or earnings be more than would sustain 45 million, so that 45 million fixed that that's what will come on a regular basis, a nd then the income debenture could be '<ed to clear off any other earnings and without having to go to declaring a dividend. CHERNIACK: Mr . Chairman, the question was not answer ed. The question was, who made arbi trary decision, Mr.

Ziprick or the Department of Finance? Well it is still an arbitrary decision, lk. ZIPRICK: Well, there is a lot of input. I have expressed my view, a consulting firm was consulted, 3oard of Man For and the Department of Finance, and it eventually resolved itself by outright tiation between the ManFor Board and the government of the day. CIQ

MR. CHAIRMAN: Mr. Cherniack. Public Accounts Friday, November 24, 19 78 MR. CHERNIACK: Well, Mr. Chairman, just looking - and I explained earlier that I had nothin to do, and don't know really much of the background of how that money was apportioned as betwee the four different kinds of securities - I would guess that it was felt that the $20 mil lion of commc shar es was a long term investment that would be paid over when there is a good established surpll avai lable, and it should not require to be inte rest paid on it every year, and the $45 mil lion wou be required to.

That's my understanding of the way these things are set up; I don't justify the figure I don't know them. But if tha t were the case, then looking at this as any other commercial corporatio I would put the $20 mil lion into advances to investments into Crown agencies; I think I would ha' done that, or I would have go tten some kind of outside valuation of what the company is wor and I would put that in. So, what Mr.

Ziprick has now told us, I believe, is tha t with bargainir back and forth, you arrived at that $45 mil lion as being an advance, an investment, and the balanc of the hund red and wh atever it is - 50 milli on - as being net debt. That's correct; that mea1 that by negotiation all the various parties agreed to this figure. MR. CHAIRMAN: Mr. Ziprick. MR. ZIPRICK: I wasn't a party to the bargai ning, I was consulted in the first instance as to wll would be a reaso nable approach.

But really, the bargai ning wasn't too much about the incor debentures; the bargai ning, as I und erstan d, was between how much would be a fixed charge a1 how much won't, and of course, naturally the Board of Manfor would want to have as low a fix, charge as possible; the government would want to encourage them to be as produ ctive as th could and inc rease the fixed charge and so it was in that area that the other - the division betweE for ins tance, income debentur es and preferred shar es - was just a convenience not to have decl are dividends if there was excess earnings and they were to be drawn down. MR.

CHAIRMAN: Mr. Cherniack. MR. CHERNIACK: Mr. Chairman, I now assume tha t Mr. Ziprick is talking about negotiations bargaining that took place at the time when the share structure was set up. I'm not talking abc that; I'm talking about who decided that the 45 million is an investment and the balance is 1 debt. Who decided that? MR. ZIPRICK: Oh, I'm sorry. I put this in, stating as a means to demons trate, because I felt were moving and at that dir ection it would be good to have somet hing like th at before me, s made those decisions; I put them in there.

Now, that's not what finance may come up, they're 1 stan ding behind this; this is purely my decision, there's nothing like that in the Public Accour So whatever you dis agree with here, you can disagree with me. I say, wel l, that's the way I s it, and put it in there as a demons tration of what it would look like when we go to this, and only in there for that purpo se. MR. CHAIRMAN: Mr. Cherniack. MR. CHERNIACK: Mr. Chairman, I apprecia te that clarifica tion, because I do not agree that c 45 mil lion should have been sho wn as an investment.

I don't know wha t that plant is worth, normally, looking at a balance sheet, I would say at least the common shares and this 45 we be included as an investment, as inde ed it is an investment - maybe a bad investment, I de know. But as I say, I would compare it with others and I would expect ther efore that the governrr is not bound by this and I appr eciate Mr. Ziprick's presenting it to us as an understanding of I the statement might look, but it's clearly not the government's assess ment on how it should le And that answers k MR. ZIPRICK: No.

When the government comes up with one, there could be differences, anc cou rse if I don't agree, I will have my usual qual ifications ahead of it. MR. CHAIRMAN: Any further discussion on Page 14 ? If not, Page 14 -pass; Page 15 . Cherniack. MR. CHERNIACK: Page 15 is where I was planning to raise that $30.6 mill ion. Mr. Ziprick, I t� said earlier that somewhere or other he said that this is not consis tent with past practice, t haven't found that yet.

Public Accounts Friday, November 24, 19 78 l. ZIPRICK: That paragraph was to indicate it, and I guess it didn't indicate it as well as it could But that's the paragraph that we were explaining the deviations in practice. I. CHERNIACK: Well, Mr. Chairman, I don't know if the deviation in practice or a deviation from · state ment, because the preced ing paragraph is not a change in practice, it just sho ws how the Jre was varied.

But this item dealing with the $30.6 million, I'd like to know, was this done by jer-ln-Council, by the Lieutenant-Governor in Council, or was it done by the Minister of Finance, was it done internally by the Department of Finance? I'd like to know the basis on how this :; worked out. . CHAIRMAN: Mr. Ziprick . . ZIPRICK: The $30.6 million? . CHERNIACK: Yes, the three items . . ZIPRICK: Well, under the present Financial Admin istration Act, the Min ister of Finance can ost do anyth ing. He can call this year's reve nue to be next year's rev enue, last year's reve nue >e called - and there's a

section that he can declare, and it's been used over the years, and that's where the authorities ... . CHERNIACK: Was this done by a letter? ZIPRICK: lt's just app roved by the Minis ter of Finance. Now, I don't know whether there's ten letters or not on this. Mr. Curtis could . ....

CHERNIACK: How does the addit decide whether or not it was done in accordance with the ZIPRICK: There would be a journal entry that's signed by at least the Min ister of Finance enior officer on behalf of the Mini ster of Finance, so as you know, every journal entry that's ted, and that is not necessarily signed by the Minis ter of Finance, but because it's in his trtment we accept these as being autho rized by him. CHAIRMAN: Mr. Curtis. CURTIS: Mr.

Chairman, I just want to make the point that the entry was made; it was a journal r covering it and it was made on the recommendation of the department to the Min ister but supp orted by documentation from Canada, from the Federal Government, which varies The tl Arrangements Act, in effect, by permitting the amount to be paid in a year subsequent to year in which it is due and payable, and it was on this basis that we made the nmendation. CHAIRMAN: Mr. Miller.

MILLER: This has happened before, where the Federal Government, for whatever rea son, use of its financial problems or what have you, where money is anticipa ted in a particular fiscal and the Federal Government didn't send the cheque. This, I'm sure, has happened often. CURTIS: Yes. MILLER: But I don't recall when the mone ys received were not included in the fiscal year, :her, were set up as an Accounts Payable for the next preced ing year or the subsequent year, r.

So that I can see the journal entry would show this 30.6 million received but which is actually 1 to Canada, but being charged up to the prec eding years is what I find somewhat strange. 10t the usual practice. My recol lection, although limi ted in the department, is that the mone ys received on a cash flow basis, just as certain mone ys which we anticipa ted receiving and didn't 'e, for wh atever reason, you know. Ottawa held back a cheque. In this case they advanced y. But mone ys that were not received, even though anticipated, were simply shown as a shortfall ·enue for that year. :UR TIS: Mr.

Chairman, as part of the recommendation that we had made at the time, we 10 1

Public Accounts Friday, November 24, 1978 did do a listing of the kinds of variations that had taken pla ce in the past and we actually preparec a table for the Mi nister at the time, which does indicate similar kinds of differences between years where I can recall a couple of years tha t were similar, where the Federal Government, in our vieli\ had excess funds that it wished to disp ose of, just the reverse of this case, and they had provide' us with cash tha t we weren't entitled to, and in advance, and we hadn't at the time taken thos funds into rev enue.

We had taken it into the year following, tha t is, the year that we were entitle' to receive it, and we did try to provide as much information in the Public Accounts and in ou estima tes to reflect those variations so that it would be clear. MR. CHERNIACK: That's prepayment. MR. CURTIS: Yes, giving us cash in advance. Jus t the reverse of this situation. MR. CHERNIACK: No, it wasn't a reverse. One was a prepayment of what was known to be du and payable the next year; this was a claim for past indebtness, for an overpayment fro1 before. MR.

CURTIS: In the case that we're talking about, yes; it was an amount that they were entitle to. In other words, we owed them the money clearly in the year under The Fiscal Arrangemen Act but the y allo wed us to pay it in the su bsequent year, so it was clearly a liability. In the oth1 situations that I was referring to, they had paid us in advance of our entitlement, which is the reven situation.

In those cases, we didn't take the income into revenue of the year, we took it into tt year where we were entitled to it, so in other words, we just sh ifted it to the right year, forwar Well, in this case, we were shifting it the other way. MR. CHERNIACK: This wasn't the right year, this was the wrong year, because it may have dat• back two years. Mr. Craik said today that you just got a billir'lg of $9 mil lion or $13 milli on for tv years ago. MR. CUR TIS: Yes.

But the agreement, the Fiscal Arrangements Agreement, allo ws the Fede1 Government to charge us in the year that they find the error or the difference, and that could 1 two years later, or one year later, but it spells out the year in which they are entitled to char· us and deduct from our payments the amount that we owe them. MR. CHAIRMAN: Mr. Schr eyer. MR. SCHREYER: Mr. Chairman, that elaboration actually deepens the problem, or deepens 1 confusion, because if I und erstood correctly, ... MR. CHAIRMAN: Mr. Sch reyer, would you sit a bit closer to the microphone? MR.

SCHREYER: .. . if I und erstood correctly, Mr. Curtis was saying that The Fiscal Arrangeme1 Act had to be varied. Now, the technical procedure for that would lie with the federal peor right?! MR. CURTIS: I didn't mean the Act was varied; the payment that was due from us to the Fede Government was varied. In other words, they didn't insist on our paying them in the year, but tl deducted it ... MR. SCHREYER: But rather in the subsequent year. MR. CURTIS: Th�t's correct. MR. SCHREYER: But that's just the point, you see, Mr. Chairman.

If in fact the Governmen1 Canada was amenable to, and in fact the transaction was so carried out as to be paid in the ensu fiscal year, why was it shown on our books as being a negative entry or a payment out in the previ, fiscal year? MR. CURTIS: Because it was the year that it should have gone into. If you'r e trying to acco for, as we are trying to do, rev enues in the right year and expenditures in the right year, to largest extent possi ble, then you would say that should apply to this year and not to the next Y' where we are in fact being allo wed to pay it off.

Public Accounts Friday, November 24, 1978 IR. SCHREYER: Fine, Mr. Chairman. I don't argue that point, it was discretionary. I admit it was scretionary, but then two points follow, the first being this question: if in fact the transact ion, the >w, was postponed to the subsequent fiscal year, that the intent and desire in Manitoba, if it's dis cretionary, was to have it take place in the 19 77-19 78 fiscal year, then why didn't the cash >w ... why wasn't that arranged with Ottawa so that they would accept the cash. Did did they fuse to accept the flow in 19 77-19 78 fiscal year? R.

CURTIS: I think really they permitted us - and this is quite late in the year - to forego e payment, because of the fact that we were short of cash and they realized that the provinces �re having some problems. But I was trying to make the comparison to years gone by when they tve said, "Look, we're flush with cash, and while we don't owe you the money now, we'll advance to you", and in those years we had used the same principle. We had said, All right, we're not titled to the money this year. Therefore, we will show it as being received clearly, and it will go the Publi c Accounts but we won't take into income.

We will show it as transferred to the next ar, the year in which we are entitled to receive it. And it's a matter of ... �- SCHREYER: I don't want to sound virtuous, Mr . Chairman, but it sounds to me that that's actly how it should be done. You get a prepayment, you don't take it into rev enue in the year which it's received but rather in the year in which it normally would be expected and ought to receiv ed . I. CURTIS: That's correct. l. SCHREYER: That's what you said, and to me that's only logical and that, apparently, was at was done. Okay, let's drop this, Mr.

Chairman, in terms of the strangeness of arranging with Ottawa by her some bit of extra negotiation to postpone the actual payment and cash flow to the subsequent :al year, but yet showing it in our internal books as being a charge against the previous fiscal tr. I mean that just ... Clearly if we were short of cash we could have postponed it to the next :al year. Ottawa ag reed . That in fact was done. Well then it shouldn't have been charged, however, he books in the previous fiscal year. That's point one but that's less imp ortant than this. This ny question to Mr .

Curtis now: If that is felt to be logically enough, if not perfectly logical but ical enough, and can be worked out with an accommodating Federal Government, wha t about parallel treatment of the converse of underpa yments which are acknowledged by Ottawa to be eivable or payable by them? Could not converse treatment have been worked out with Ottawa hat respect? Or simply a nett ing out? .

CURTIS: In this case, really that's what payment we are talking about is, the $30 million is under-payment in the year and they in fact made the deductions themselv es on our behalf and ·efore didn't require it to be paid in the year in which they were actually entitled to receive the h. So that was the basis for our adjustment. But I would say it's consis tent with the adjustments je in past years, where if they did, by reason of having excess cash, give us too much money, 1 we tried to show it in the proper year, the year in which we were entitled to receive it.

I think two examples are really the same but in reverse. CHAIRMAN: Mr. Cherniack. CHERNIACK: Firstly, I'd like to see what Mr. Curtis is talking about. He is talking about previous ·s; I'd like to see it. Secondly, I'd like to know whether in the last nine or ten years, last decade, ther at all time s the books were balanced in the current fiscal year or whether indeed there � adjustments that were made subsequent to the then curr ent fiscal year, which were not poned the way this was. Because the impr ession I get from Mr.

Curtis is that there have been tsions of over-payment but that there have never been occasions of subsequent adjustment where 3overnment of Canada said you owe us money. That's the impr ession I get. Therefore I would to know just what is he referring to when he talks about previous years, and what is every 's balance sheet - when was it worked out. Jhile he is looking for that, I will ask another question.

I'd like to confirm that in fact this money was set aside, this $30 million, was not paid to Canada, that in fact Canada made deductions payments tha t they were making and that there was a cheque flowing from Ottawa to Winnip eg not Winn ipeg to Ottawa, that this $30 million was never actually paid to Ottawa. I'm guessing CURTIS: As I rec all, it was deduc ted from subsequent payments. 10 3

Public Accounts Friday, November 24, 1978 MR. CHERNIACK: So it was not a payment out by . . . when it was set up as an account payab it was not actually paid out; it was balanced against reductions that were made by Canada. MR. CURTIS: lt was a reduction of payments that were due us in the following year. MR. CHERNIACK: In other words, Canada may have sent a cheque and said, "We enclose < cheque for $20 milli on, repres enting $22 million due to you, less $2 mi llion deducted on acco1 of previous year." MR. CURTIS: Yes. MR.

CHERNIACK: So there was actually no cash flow going from that $30.6 mil lion set aside. a bookkeeping entry, really. MR. CURTIS: Well, it's a physical reduction of cash in the subsequent year . MR. CHERNIACK: Yes, it's a bookkeeping entry, though. MR. CURTIS: ... but they could have ... they were entitled, they could have asked for a che� or ded ucted the whole amount from our last payment. MR. CHERNIACK: They could have. MR. CURTIS: They could have. MR. CHERNIACK: Yes.

And that's what I'm saying, though, that not only didn't they but even t the money set aside from this fiscal year to the next, of $30.6 million, was never actually physic paid by Manitoba to Ottawa, but rather was a reduction in the payments that were being m by Ottawa to . . . MR. CURTIS: Mm'hmm. MR. CHERNIACK: Yes. I have confirmed that, but I'd really like to know wha t are the instar before, and otherwise does it mean that the books are always balanced before the end of the fi year? MR. CURTIS: Normally they are not, because there are payments that come in right at the of the year, as you probably recal l.

But there have been a numb er of cases in the past nun of years where we have made those kinds of adjusting entries as a result of money coming i the wrong time. In other words, in advance of when we were entitled to it. MR. CHERNIACK: Do they show up in the books? MR. CURTIS: Yes. MR. CHERNIACK: Where? MR. CURTIS: We would get you the old Public Accounts, but they would show up. We di< to clearly indi cate the source. MR. CHERNIACK: Well, would you provide that for us? MR. CURTIS: Yes. MR. CHAIRMAN: Mr. Mill er. MR.

MILLER: What about where the Federal Government owes money to Manitoba, acknowle tha t it owes the money but simply doesn't send the cheque until the next fiscal year? In other Wi they un derp ay to Manitoba. When you do receive that cheque, that is treated as money rec< within the fiscal year in which the money comes, even though it's acknowledged tha t the m is due but they just didn't pay it prior to March 31s t or April 15 th, or what have you. Is tt common occurrence? Where an amount is estimated, acknowledged and in fact it will be cor 10 4

Public Accounts Friday, November 24, 1978 but they only choose to pay half of it and they are going to postpone payment for six months, which they have done on occasions. MR. CURTIS: Just going back in my memory, I belie ve we have had the odd occasion where an 3mount has been owing to us and has come in . . . III R. MILLER: late. III R. CURTIS: perhaps a few days late, slightly late. IIR. MILLER: Or sometimes it might be too late. IIR. CURTIS: And we have taken it into income, but the Auditor is aware of those instances. �R.

MILLER: If it comes in before April 20th, okay, but there are occasions when the money doesn't ome in until May or June, in which case you would take that money . IR. CURTIS: No, no, I don't belie ve we have had any that far back. IR. MILLER: . . . and then it would be simply treated as cash flow for the year in which the money ame in .. IR. CURTIS: Usually they are balanced quite well. R. CHERNIACK: But if there was such an instance where there was known to be mone ys payable the last fiscal year from Canada to Manitoba, but not actually paid, would it not have been msis tent to show it as an account receivable?

R. CURTIS: Well, I suppose we could treat it that way. I don't recall any instances where we tve had anyth ing that was that . . . �- CHERNIACK: Mr. Chairman, I just hate ques tioning Mr . Curtis about it, because I think it's respon sibi lity of the Mini ster, and I will show some ins tances in this report where I think it could ve been shown as an account receivable to offset that account payable, to some extent anyway. 1t I really dislike very much cross-exam inin g a Manager when I think it's government policy we're aling with. t CHAIRMAN: Mr. Ziprick. I.

ZIPRICK: Just as a matter of the policy, the capital claims have always been recorded on 'ec eivable basis. So any recovery of capital expenditures, the claims have always been set up a receiva ble but the polic y has been for any reven ue of expen ditur e claims - and they are mainly the education area for post-secondary education - these were on a cash-flow basis. The large aunts of money were coming in under the Department of Health and Welfare. Now those claims highly standardized and the cash flow is very consistent, they are large amounts, and we ensure t there are 12 claims get into each year.

As far as education claims, there has been some problems lelaying of sending the claims, then Aud itors approving the claims and there are some dis putes, I this is the area where there has been some uneveness in the cash flow . . CHERNIACK: Do you agree, Mr. Ziprick, with my suggestion that if that is known that it would consi stent to show tha as an account recei vable, as against this account payable? , ZIPRICK: To apply those would be not consi stent with the treaiing of the same things the tious years. CHERNIACK: No, it would not be ZIPRICK: In other words, we .

CHERNIACK: . . . but would it not be consistent with what the government did this ? ZIPRICK: Well, these are matters of policy and some of these policie s are decided at one 10 5

Public Accounts Friday, November 24, 1978 . could be one shot. That's within the prerogative of the Minis ter of Finance, and if he decide to do that it's a decision that ... MR. CHERNIACK: So what happened was that they broke the consis tency by showing this $30. mill ion as an expen diture,

whereas it was not an expenditure in that current year, but they did ne at the same time take into account receivables, which are coming from the Government of Canadi to possibly offset this kind of a deficit. MR. ZIPRICK: Oh, there could have been trad e-offs follo wed , yes. MR. CHERNIACK: There could have been trad e-offs, and it was government polic y that change it. 1 mean it wasn't your consideration that did it; it was government policy. MR. ZIPRICK: No, no, no. MR.

MILLER: In other words. they were consis tent in the way they handled the mone ys which we due from Ottawa, but not consistent with the way they handled mone ys which Ottawa h< paid? MR. ZIPRICK: Well, Mr . Curtis has brought some points up that came the other way. I am n MR. CHERNIACK: ... don't know about them. MR. ZIPRICK: I sort of have rec ollection, but he would have the details. As far as going this w< we have to go back to 19 68 and 19 69, I think, to find where there has been similar deferrals much smaller amounts. MR.

CHERNIACK: Of course, it's not for you to comment about the fact that there was a chan of government in the fiscal year we're dealing with now and that whether or not that could h� moti vated that kind of decision. I'm not asking you to comment on that, but I raise that poi1 MR. CHAIRMAN: Any further dis cussion on Page 15 ? Mr. Cherniack. MR. CHERNIACK: Mr. Chairman, just one thing. There are substantial decreases in taxation incor corpo rate and the revenue guarantee - we know tha t - and these decreases include the $3 million, don't they? MR. ZIPRICK: That's right. MR. CHERNIACK: Yes.

Now, how much of that was the gov ernment's decision to reduce inco taxation? Was there anythigg in there? I don't remember the timing, but the government redu1 income taxes. Did that form part of the decr ease of the rev enue? MR. ZIPRICK: I guess it would probably have some bearing on it. I don't think that it would an appreciable bearing. MR. CHERNIACK: I don't even remember whether it applies. MR. CHAIRMAN: Mr . Mi naker. MR. MINAKER: I think, Mr. Chairman, tha t it comes into pla y in the following year - like year, not the one · that we are dealing with now but in our present year ... MR.

CHERNIACK: There was a reduction in tax enacted in Deceer. Did that not affect withholding tax for Jan uary? -(Interje ction)- You 'r e talking about fiscal yerr and calendar Y• Now, the tax reduction was for the calendar year, wasn't it? Not the fiscal year. MR. CURTIS: The calendar year, as I reca ll. MR. CHERNIACK: Well, that then means that three months of 19 78 had a reduced tax, and I assuming that the withholding tax was less - for four months, isn't it?

Public Accounts Friday, November 24, 19 78 ,R. CURTIS: The bulk of it wouldn't be collec ted until the following April deadline, to be tccur ate. ,R. CHERNIACK: We ll, now I am confused. Does not the Government of Canada collect withholding lX and remit it? Does that then not mean that new books would have been published, based on 1e government's reduction of taxes so that the January with holding tax would be less and therefore 1e remittance to the Province of Manitoba would be less. IR. CURTIS: Except that they pay us late. There is a period IR. CHERNIACK: Not four months R. CHAIRMAN: Mr.

Curtis, can you make sure that you get a little closer to the icrophone. R. CURTIS: Oh, I'm sorry. lt's either two or three months later that we get the payments. So ere is always a lag, regardless of the rates, because you know they have that leeway of collecting and then paying us su bsequently. :t. CHERNIACK: But there might have been a couple of months, then. �- CURTIS: lt's either two or thr ee months. lt could have been one or two months. t CHERNIACK: lt could have been March and April cheques may have been less because of l reduction in tax. I. CURTIS: Yes, it could be.

So there could be one month at the most. I. CHERNIACK: Yes. Thank you . . CHAIRMAN: Page 15, Page 15- pass; Page 16 - Mr. Cherniack . . CHERNIACK: Page 16, Residual post-secondary education support. How much money was eived in the subsequent fiscal year, based on what was owing by Canada? lt says the rev enue eived was $3.9 million. The estima te was sh ort by $3.9 million since the claims were not finali zed soon as anticipated. I'm wondering if Mr . Curtis ...

He probably doesn't know how mcch was �ived but I am told it was $5 mill ion, a nd ther efore this is an example of the point we are trying nake that that $3.9 mil lion not yet received because claims were not final ized could have been, I say should have been, shown as an account receivable to offset the $30.6 million as being 1eys owing by Canada to the province. CHAIRMAN: Mr. Curtis. CURTIS: I think there is one major difference. I think this appl ies and that is that we wouldn't l been entitled to the funds until the su bsequent year, under the arrangements,

whereas in the 'r case, the $30.6 million, the Federal Government was entitled to the funds at that point. CHERNIACK: Why were we not entitled to it? CURTIS: I belie ve the amount would be flowing into the su bsequent fiscal year. CHERNIACK: But why? lt's due from the previous year. MILLER: lt is estimated tt $7.8 million. CURTIS: There is a fair lag period between the time that the claim is established and verified, iudited and subm itted , and they are not obliged to pay us in advance.

If there were an advance m, that perhaps would be different, but there isn't in this case. lt's a post-audit provision of ng. :HERNIACK: But it was money that the Province of Manitoba knew was owing to it by Canada 1at fiscal year. 10 7

Public Accounts Friday, November 24, 1978 MR. CURTIS: That's true, and there are all sorts of similar kinds of arrangements where the fundl come in, in the su bsequent period, even though we had laid the cash out. MR. CHERNIACIK: Right. MR. CURTIS: lt's a question of entitlement to the funding. MR. CHERNIACIK: Well but by the same token that $30.6 mill ion, you didn't have to pay it unti the following year. You were entitled not to pay it until the following year. MR. CURTIS: No, no, that's not right. Under the Act we were obliged to pay it. MR. CHERNIACK: But you were, by arrangement, entitled not to. MR.

CURTIS: I don't even think it was an arrangement; I think they, at the last minute, said, "W will take it out of the next ye ar." MR. CHERNIACK: You could have paid it? MR. CURTIS: Sure, oh cer tainly. If they had said, "We want a cheque today," we woul have ha' to provide the cheque. MR. CHERNIACK Mr. Chairman, I'm just letting it rest that I now have been told that $5 millio was received instead of $3.9 million, that I would contend that at least the $3.9 million coul have been shown - I think Mr. Ziprick agreed with that - could have been shown as a receivabl to offset the $30.6 million and wasn't.

I'm just driving home the fact that there were money owing by Canada. MR. CHAIRMAN: Any further comment on Page 16 ? Page 16 -pass. I note the time is 4 o'cloc and I have had no ind ication from any members of the Comm ittee how long they wish to sit th afternoon. Comm ittee rise? Comm ittee rise. Do we have any indic ation when the Comm ittee wanl to sit, Mr. Mi naker? MR. MINAKER: Mr . Chairman, I talked with the Mi nister and he indica ted it would probably t in approxi mately two weeks time, because of his present schedule. Once he is definite on it, tt information will come out from the Clerk. MR.

CHAIRMAN: The members will be notified in the normal manner. MR. MILLER: Can we have at least a we ek's notice, so tha t we can budg et our tirr acco rdingly? MR. MINAKER: We will attempt to. MR. CHAIRMAN: Committ e rise. 10 8

Public Accounts Friday, November 24, 19 78 ADDENDUM TO PU BLI C ACCOUNTS COMMITTEE MEETING , THURSD AY , JUNE 8, 1978 RE : FR EIG HT , EXPRESS & CARTAGE (PAGE 14 8) UE STIO N BY MR . WILSO N "All ri ght . Mr. Minister , the quest ion is that I would li ke to know what the Government in these cash payment s, 19 76- 77 , spent on cartage and transfer companies, hauling companies , in that particular yea r?" �QUESTED INF ORMATION An analy si s of the expenditure obj ect code used to clas sify expenditures for "Fre ight , Express and Cartage" during the fis cal year indicates that a total amount of $1 ,0 45,73 7.4 7 was expended from appropriations . The following

schedule illustrates the dist ribution of these expenditur es by departmen t: Legislat ion Executive Council Agricult ure Attorne y-General Civil Service Colleges & Universities Affairs Consumer , Corporate & Int . Serv . Co-ope rati ve Development Education Finance Health & Social Development Highways Industry & Comme rce Labour Mines Resourc es & Env. Management Munic ipal Affairs Northern Affairs Public Works Renewable Resources & Trans . Services 10 9 $ 25 .2 0 4, 891 .0 3 19 4, 8 98 .3 2 3' 12 4.14 628 .80 45 ,15 2.0 0 5, 057 .20 1 '0 90 .45 10,0 86 .88 1, 370 .1 5 72 ,6 79.5 9 54 ' 17 5. 01 4,9 83 .0 3 612.6 5 19 4,7 60.80 2, 371 .4 7 18 4,8 49 .10 147 ,5 13 .44 82,79 8.16

Public Accounts Friday, November 24, 1978 Tourism , Recreat ion & Cult. Affairs Urban Affairs Flood Control & Emergency Expenditures 110 $ 31 ,13 6.2 4 3,4 67 .81 66 .0 0 $ 1 ' 04 5, 737 .4 7

Public Accounts Friday, November 24, 1978 PUBLIC ACCOUNTS COMMIT TEE MEET ING , THURS DAY, JUNE 8, 1978 RE: COST OF TA XIS (PAGE ]4 8) UE STIO N BY MR . WILSO N : "I'l l als o as k the question on simi lar page 148, could the Goverrunent give me the co st of taxis for the year 19 76 -77 spent by the Goverrunent?" �QUESTED INFOR MATION An anal ysis of the expenditure obj ect code used to clas sify expenditur es for "Transportation (other than Employee s) - Taxis" during the fis cal year indicat es that a total amount of $4 94,0 11. 20 was expended from appropriations during the 19 76 -77 fi scal year . The fol lowing

schedule illustrates the dist ribution of these expenditures by department : Executive Council Att orney-General Co-ope rati ve Devel opment Public Works Health & Soc ial Devel opment Mines Resourc es & Env. Mgt. Tourism Recreation & Cult. Affs. Colleges & Universitie s Affairs Renewable Resourc es & Trans . Servi . Education Northern Affairs $ 94 3. 85 2,41 6.5 5 70. 15 53 .70 48 1 ,6 88 .5 9 51 .3 5 236 .70 35 9.2 5 10 9.6 5 4, 481 .5 6 3,5 99.85 $ 49 4,0 11 .20 It should be noted that coding of expenditures to this level of detail is not a mandatory requirement in the Departments and that a minority of expenditures may not have rece ived this coding . 111

Public Accounts Friday, November 24, 1978 PUBLIC ACCOUNTS COMMITT EE MEET ING , THURS DAY, JUNE 8, 1978 RE: AMARANTH WORK ACTIVITY PROJE CT , AMARANTH , $3 70,9 40.72 (PAGE 150) QUES TIO N BY MR . WILSON " ••••• the Amaranth Work Activity Proje ct , for $3 70, 000. I just wanted an explanation as to what that was" REQUESTED INF ORMATION The Amaranth Work Activity Proje ct is one of several such proj ects operated by the Province on a 50% cos t-shared basis with the Federal Government .

Wbrk Activity Pr oj ects are desi gned to as sist persons who because of person al or family reasons have unusual diff iculty in finding and reta ining employment or in benefiting from technical or vocational training programs . The Work Ac�ivity Proje cts use a com bination of counsell ing and practical on the job training to provide clients with social and vocational skill s needed for the technical or vocat ional train ing and/or employment placement best suited to their nee ds.

The Amaranth Proje ct servic es the comm unities of Amar anth , Alonsa , Langruth , Kinosota , sandy Bay Reserve and Bacon Ridge . 11 2

Public Accounts Friday, November 24, 1978 PUBLIC ACCOUNTS COMMITTEE MEET ING , THURSDAY , JUNE 8, 197 8 RE : AD HOC COMMIT TEE FOR THE BETTER UNDERSTA NDING OF CULTURE THROUGH MU SIC , WIN NIP EG , $3 ,0 00 - (PAGE 14 9) QU EST IO N BY MR . ORCHARD "I'd li ke to find out whose department thi s $3 ,0 00. was funded through . I'd li ke to know who the individual or indiv iduals are who make up this ad hoc committ ee .

I'd li ke to fi nd out if there was any fol low-up as to the report on the Ad Hoc Committee 's findings , whether the governme nt was ever pres ented · ith a report on the findings of whether there is better under tanding of cult ure through music ." RE QUESTED IN FORMATIO N This payment was a cult ural grant made by the Department of Tourism, Recreation and Cul tural Affairs under the authority of 0/C 403/77 .

The Ad Hoc Committee was compr ised of nine cultural groups from Winnipeg and its obj ective was to provide a mechanism allowing an exchange and sharing of the music and song of various cultures in Manitoba , in one common concert , with the accompaniment of the Winnipeg Symphony Orchestra . The concert was held on April 20, 19 77 . There was no under taking to report on whether or not the Committee had achieved a better understanding of culture through mu sic . The individual s who made up the Ad Hoc COmm ittee were : Bairo s, August Benoist, Marius Borman, Gunter COhen, David Grande , Franco Januszk iewicz, H.

Kalba , Dr • J. Lee , Phil Lorenc , Chris Stanczy kowski, K. 113

Public Accounts Friday, November 24, 19 78 PUBLIC ACCOUNTS COMMITTEE MEET ING , THURS DAY, JUNE 8, 1978 RE : ANNIN FL AG CO . LT D. , TORONTO , $8 ,3 51 .6 0 (PAGE 151 ) QU ESTIO N BY MR . WILSO N "Could I have a breakout and the rea soning why we spent $8 ,3 51 .6 0 on flags , under the Annin Flag Company of Toronto ?" MR. CRAIK "We can give you a breakout, but we can't give you the reaso n" . REQUESTED INFORMATIO N The following is a breakout of payments to the Annin Flag eo . Ltd .

Date of Payment Amount Particulars DEPARTMENT OF TOURISM , REC REAT IO N & CULTURAL AFFAIR S June 24/7 6 $2,180. 00 Manitoba Flags (6" xl0") and bases purchase( by the Tourist Branch July 30/7 6 1, 450.0 0 Manitoba Flags (6" xl0") and bases purchase( by the Tourist Branch April 18/77 536 .0 0 Manitoba minature flags (4 "x6") purchased by the Tourist Branch DEPARTMENT OF PU BLIC WORKS Sept . 30/76 March 31/77 $ 156 .40 153 .50 Manitoba and Canada flags (3 'x 6') shipped to Brandon DEPARTMENT OF HEALTH & SOC IAL DEVELOPMENT July 12 /76 $3 ,4 25 .70 Manitoba games flags (3 'x 6') and applique (4 l/2 "x9" ) purchase d by the Sports Adm inistrati ve Centre DEPARTMENT OF INDUS TRY & COMMERCE Nov. 4/76 $ 450 .0 0 Manitoba flags (4 "x6") purchased by Promotion & Inform ati on Services 114

Public Accounts Friday, November 24, 1978 PU BLIC ACCOUNTS COMMITTEE MEETING , THURSD AY , JUNE 8, 1978 RE: I. BAIN , PUTNEY , ENGLA ND, $14 ,1 0 4. 80 (PAGE 153 ) QU ESTIO N BY MR . WILSON "I'm ju st trying to es tabl ish , what would that money be for , and it 's just one of general inform ation? ••••.•• ••• why we would be sending a cheque over to London, England ••••••.••• the I. Bain in London, England , $14 , 014 .8 0." REQUESTED INFOR MATION Mr.

Bain was under contract with the Tourist Marketing Service Branch of the Department of Tourism, Recreation and CUltural Affairs to write articles on travel and tour ism in Manitoba for distri bution in England and other European Countr ies for tour ist promo tion purposes . A to tal of 30 articles were purchased . Distr ibution and promotion were done at Mr. Bain 's expense . 115

Public Accounts Friday, November 24, 1978 PUBLIC ACCOUNTS COMMIT TEE MEETING , THURS DAY, JUNE 8, 197 8 RE : CONSULTING ENGINEERS QUEST IO N BY MR . PARASIUK "I would like to get that same information as well and I'l l ask for 21 31 which is Consulting Enginee rs" . REQUESTED IN FORMATIO N An analysis of the expenditure obj ect code used to class ify expenditure! for "Cons ult ing Engineers (other than Management Consultant s) " during the fiscal year indicates that a total amount of $234 19 11 .9 1 was expended from appropr iations . The follo wing

schedule illustrates the dist ribution of these expenditur es by departm ent : Consumer Corporate & Int . Services Public WOrks Health & Social Development Industry & Comme rc e Mines Resources & Env. Mgt . Municipal Affairs TOurism Recreation & Cult . Aff s. Renewable Resourc es & Trans . Services Northern Affairs $ 95 1765 .70 19 1 098 o 54 519 70.0 0 1916 47 .3 8 65 1813.6 8 1212 10.0 0 41 1 07 • 11 11 179 9. 95 49 9.5 5 $ 234 19 1 1. 91 It should be noted that coding of expenditur es to this le vel of detail is not a mandatory require ment in the Departments and that a minor ity of expenditur es may not have recei ved this coding. 11 6

Public Accounts Friday, November 24, 1978 PU BLIC ACCOUNTS COMMIT TEE MEET ING , THURSD AY , JUNE 8, 197 8 RE: LEGAL FEES (PAGE 151) JESTION BY MR . WILSON "The second one under Appl eby & Chappel , which is le gal fe es, I wonder if under code 21 4 I might be able to have the co st to the �ovcrnrr ,ent in 1976 -77 for lawyers in the Province . It would seem to me that it enta il s a lot of work and when you . have 214 , I wondered if included in that , I think there 's another one calle d , Fees & Servic es paid on behalf of citize ns , no 73 1.

So I think if I could combine 731 with 214 I would be able to tell the le gal cost to the taxpayers of Manitoba that this Government in that particular period 19 7 6-77 paid to obtain advic e on dif ferent relate d matter s pertaini ng to Governmen t. QUESTED INFOR MATION An analysis of the two expenditure obj ect codes req uested indicates the following expenditures for the fiscal year : Code 214 - Professi onal Fe es, Lawyers Code 731 - Fees & Servic es Paid on Behalf of Citizens $ 17 9, 48 2. 15 6,6 56 .2 6 $ 18 6,13 8 .41 The fol lowing

schedule indicates the di:?tri bution of these expenditures by department : Legislati on Execut ive Council Attorney-General Consumer Co rporate & Int . Serv . Co-operative Development Finance Health & Social Development Industry & Commerce Mines , Resourc es & Env. Mgt . Municipal Affairs $ Code 214 5, 000.0 0 7,83 0. 45 82 ,1 43 .78 19, 079.0 0 13,8 68 .5 6 9,2 63.2 7 7,9 72 .9 6 10,3 70.2 2 3,9 27 .0 0 9,9 81 .3 2 $ Code 731 6,6 26 .2 6

Public Accounts Friday, November 24, 19 78 TOurism Recreation & Cult . Affs . Renewable Resourc es & Trans . Serv . Norther n Affairs $ Code 214 8.0 0 6, 048. DO 3,9 89. 59 $ 179, 48 2.15 Code 731 $ 5.0 0 25 .0 0 $ 6,6 56.2 6 It should be noted that coding of expenditur es to this level of detail is not a mandator y requ irement in the Departments and that a minority of expenditures may not have rece ived this coding . 118

Public Accounts Friday, November 24, 1978 PUBLIC ACCOUNTS MEETING , THURSD AY , JUNE 8, 197 8 :: PATRICK J. BEEL , WINNI PEG , $3 ,7 49 .2 9 (PAGE 155) IEST IO N BY MR . WI LSON "S o would I have to as k what the Patrick Beel item was or is there an item that has honorariums or gifts nder the obj ect code si tuation? ••• •••• well then what I'l l do is as k for a breakdown of that and ask what the expenditure was for •• ••••• " QUESTED INFORMA TIO N Mr. Beel is employed as a bridge inspector by the Department of Highways . The payme nts made to him were for rei mbursement of automobile and oth er travel expenses incurred during the per formanc e of his duti es . 110

Public Accounts Friday, November 24, 19 78 PUBLIC ACCOUNTS COMMITTEE MEE TI NG , THURS DAY, JUNE 8, 19 78 RE : THE ASSOCIATION OF PEOPLE WORKING TOGETHER ON CONCER NS , WIN NIPE G , $ 2 3 , 9 7 8 • 0 0 ( PAGE 15 2) • QU ESTIO N BY MR . ORCHARD "Mr. Chainnan, I v.uuld like to ask for a breakout on an item in the first cohmn, 'lhe Association of People Working 'Ibgether on Concerns , in Winn ipeg.

Whose Department it was funded through; the individual or indivi duals as the main rrenbers of that association and as to whether there was any follavup re port presented to goverrment as a result of government's input in fundin g.

" RE QUESTED INFORM ATION 'Ihe paynen.ts were made fran the "Special Projects" appropriation (1 6-4C) of the Depart::Irent of Colleges and universities Affa irs. 'lhe Association was a group of people fran the inner-city of Winnipeg that p.1t forward a proposal in 1975 for the traini ng of inner-city people as paraprofessionals v.urking with a nmber of irmer-ci ty organi zations . 'lhe Association board a:ms isted of representatives fran the United Church, Wirmipeg School Division and various social service groups . Board narbers were: B. Ball B. I.a.vis o. Iongbotharn J. Monteith D. Mueller A. Shapiro T.

Yauk Social Worker Student United Cllurch Princ ipal , William Whyte School Special Projects , Department of Colleges and Un iversities Affairs Neighbomood Irnproverrent Program Neighbomood Irnp rovenent Program 'lhe project was nonitored by the Department of Colleges and uni vers ities Affairs . 'lhe Director of the project was ra:}Uired to submit nnn thly fina ncial reports, audited year-end financial statarents arrl a oopy of the annual report to the Board. 12 0

Public Accounts Friday, November 24, 19 78 PU BLIC ACCOUNTS COMMITTEE MEE TIN G , THURS DAY, JUNE 8, 1978 RE: CANADIA N BAR ASS OCIATI ON, OTTAWA, $1 0,5 50 .0 0 (P AGE 16 1) ESTIO N BY MR .

WI LSON "Another one I' d like a breakdaom of, if I oould , is the Canadian Bar Associa tion in Ottawa for $1 0, 550. 00 ." QUESTED INF ORMATION 'lhe arrount of $10 ,5 50 .0 0 to the Canadian Bar Association is nade up of the follc:Ming paym:mts : Date of Paymen t Am::>unt A'ITORNEY-GENERAL'S DEPAR'IMENT Aug. 31, 1976 $ 10 ,0 00 .0 0 Sept. 16 , 1976 125 .00 Dec. 29, 1976 75 .0 0 Jan . 20 , 1977 250 .0 0 Particulars Grant paid to the Association under authority of Order in Coun cil 926/76 . Registration fee for attendance of G.E .

Pilkey , Deputy Minister at the 58th ann ual meeting of the Association . 1977 membership fee for the Honourab le Ha.vard Pawley . Registration fee for attendance of M:!ssrs. Goodm:m and Perreaul t at the 58th ann ual meeting of the Association . DEPAR'IMENT OF 'IDURISM, RECREATION & CULTIJRAL AFF AIR3 Dec. 17 , 1976 75 .0 0 Jun. 13 , 1977 25 .0 0 Purchase of subscriptions to the "Can adian Bar Review", vol tmeS 52, 53 and 54 . Purchase of subscription to the "Cana dian Bar Review" , volune 55 . 12 1

Public Accounts Friday, November 24, 1978 PUBLIC ACCOUNTS COMMI TTEE MEETING , THUR S DAY, JUNE 8, 19 78 RE: CIT Y OF NECHE , NECHE , N.D. , U.S .A. , $78 , 21 1.2 2 (P AGE 16 QUES TIO N BY MR . ORCHARD "I note a paynent to the City of Nedle, Nedle, North Dakota for $78 , 000 .00. Would it be possible to get a breakdam as to the nature of the payment and fran whose department? REQ UESTED INFORMATICN 'Ihe payments to the City of Nedle, North Dakota were nade by the Mani toba Water Services Board and pertain to the capi tal costs and operating expenses of the Nedle Water Plant which suwlies water to the following locations in Canada: a) 'lbwn of Altona

b) Villa ge of Gretna -

c) Various CCmnuni ties in the Rural Municipali cy of Rhineland . '!he water is purchased under an agreement that was signed in 1960 and renewed for a further ten year te:r:rn in 1970 . Under this agreemen t, the Province pays the following costs to the City of Nedle based on the percentage of water used:

a) Operating expenses which are assessed on a quarterly basis .

b) Principal and interest costs for a 1957 and a 1960 bond issue, assessed on a semi-annual basis . 12 2

Public Accounts Friday, November 24, 1978 PU BLIC ACCOUNTS COMMI TTEE MEETING , THURS DAY, JUNE 8, 1978 RE: BOW HELI COPTERS LIMIT ED , CALGARY , $168 ,9 10 .0 0 (P AGE 157) . lliSTIO N BY MR . ORCHARD "Mr. Chai.rman , in the second oolumn there is an item, Bow Helioopters Limited , in Calgary , for aJ..roc>st $169 ,0 00. 0 0. Would the Min ister have any indication as to the nature of services provided and where?" 'QU ES TED INF ORMATIO N This anount was paid by the Departrrent of Renewable Resources and Transportation Services for Forest Protection . In voices fran the supplier indicate the following services related to the fire fi ghting operation of the Department were perfonned :

a) Moving and placing of fire crews

b) Water banbing

c) M:Jverrent of supplies and equiprent 12 3

Public Accounts Friday, November 24, 1978 ADDENDUM TO PUBLIC ACCOUNTS COMMI TTEE MEETI NG , TUES DAY, JULY 4, 19 78 RE: EHR LO RANCH , REGIN A, SAS KATCHEWAN , $172 ,92 8 .2 3, (PAGE 11 QUESTION by MR . WILSON "I 'm lo oking at the Ehrlo Ranch in Regina , Sask atc hewa $1 72 ,92 8.0 0 - I unde rstand that it 's for send in g probl ju veni les to Saska tche wan . I wondered if I could fin d how many ju veni les th is cov ers , a brea kdown of it ma i� I' ll lea ve that wit h you.

What I' m try ing to get at i what is the cost per ju veni le to send them to Regina t th is ranch , so I' ll get that if you get me the fig ures REQU ES TED INFORMATION The payments of $172 ,92 8. 1 2 to Ehrlo Ranch , Regina dui the 19 76-77 fi scal year were made by the Depa rtment of Healt h & Social Develop ment and cove rs the tr eat ment c 17 ju ven iles . These ju veni les partici pated for vary ir periods of time in one of the fol lo win g progra ms . The da ily rate for each program is also indic ated . (

a) Wi ldern es s Cha ll enge Program - $4 3. 00 to May 31, 1976 ; $4 8. 15 remainder of fis ca year . (

b) Resi dent ial Treatment & Care Progra m - $40 .6 0 to May 31, 19 76; $4 5. 45 remainder of fisca year . (

c) Group Home Progra m - $2 0 .3 0 to May 31, 19 76 ; $2 2.7 0 remainder of fis ca year . (

d) Fa mily Home Ca re Prog ram - $1 1.35 paid la tter part of fisc al yea r . 12 4

Public Accounts Friday, November 24, 1978 PU BLIC ACCOUNTS COMMITTEE MEE TIN G , TUES DAY, JULY 4, 19 78 RE: KEPR ON 'S 8/16 MM LTD. , WINNI PEG $6 3, 73 5.68 (P AGE 19 4) �STIO N BY MR . WILSO N "U nder the 16 mm and 18 mm fi lms , Keprons $63 ,73 5 .68, I had spoken thro ugh you , Mr . Cha irman , last ti me abo ut a problem that I was loo king at under Mi nist er 's Estim ate s pertainin g to the purch ase of fi lms and I wondered if I could have a br eakdown of th is it em. " )UESTED INF ORMATIO N The attached sc hedule provi des a breakd own of th e payments made to Kepron 's 8/1 6 MM Ltd . by each Departm ent . Pa yments have be en cat eg ori ze d under the fol lowing headings : (

a) Equip ment Purch ases - Incl ude purch ase of movie or sl ide pro je ct ors and other audio/video equip ment . (

b) Parts/ S uppl ies Pur chases - Inclu de parts for equ ipment su ch as la mps , reels , le ns , et c . (

c) Se rvice Charge - In clu des the labour charge for repairs to equ ipment . (

d) Fil mstrip s , cas settes , tex ts , etc . - Incl udes the purcha se of fil mstrips , cas set tes , workbook s, guideboo ks , etc . 12 5

EQ UIPM ENT PARTS /SUP PLIES DEPAR TMENT ·PURCHAS ES .PURCHASES Ex ecutive Cou ncil $ 661.47 $ Ag ricu l ture 1, 332 .7 0 244 .71 Public Works 1, 645 .6 4 6 2. 69 Hea lth & Social Development 13 ,2 03.6 6 538 .3 2 Tou ri sm, Re creatio n & Cul tural Affairs 3,9 05.81 Hig hw ays 1,3 68 .1 2 25 4 . 58 Col le ges & Univer si ties Af fai rs 5, 382 .2 8 732 .61 .....

Rene wa ble Resources & Transpor- N tat ion Se rvi ces 606 .06 0) Urban Affai rs 127 .05 Min es , Re sources & Envi ronment al Management Edu ca tion 3,95 1.1 2 1, 85 9 .4 6 Mani tob a Text Book Bu reau $32,05 6 .8 6 $ 3, 81 9 .42 FIL MS TRIPS , SER VIC E CAS SET TES , .CHARGES TEXTS , ETC . $ $ 41 6 .5 7 217 .2 6 16 ,8 23 .83 10 1.3 0 87.1 5 46 .01 4,3 60 .1 1 10 .5 0 30 .1 9 39 .3 8 107 .6 4 5, 61 9 .46 $9 54 .7 0 $2 6 ,9 04 .7 0 TOTAL $ 66 1.4 7 1,9 93.98 1, 708 .3 3 30 ,7 83.0 7 4,0 07 .1 1 1, 709 .8 5 10 , 521 .0 1 61 6 .5 6 157 .2 4 39 . 38 5,91 8.2 2 5, 61 9 .46 $6 3,7 35.68 ., ... a: Ill ::<-a c: Z CT o= < n ID )Io 3 n CTn ID 0 .. c: N ::::l o�:o-� Ill .....

CO .... Cl)

Public Accounts Friday, November 24, 1978 PU BLIC ACCOUNTS COMMITTEE MEETIN G , TUES DAY, JULY 4, 1978 'RE : MARIT IME INDUSTRIES LT D. , BUR NABY , B.C. , $4 03, 276 .90 (P AGE 20 6) QUESTI ON BY MR . WILSON "Mr. Chair man , would the Mini ster giv e me a brea kdown of the Ma riti me Ind ustries Limited in Bu rna by , B.C. " REQ UES TED INFOR MATION Pa yments to Mar it ime In dust rie s Limited of $4 03, 276 .9 0 we re made under two co ntracts that co mpany had wit h the Marine Divi sion of the Depa rtment of Renewab le Re sources and Transportation Se rvices .

The contrac ts wit h the su pplie r covered the purcha se of the follo wing : CONTRACT #1 The su pply , inst allati on , and co mmi ssioning of st eer ing propu ls ion un its and contro ls for two new pas senger/ vehicle ferries , hu lls Nl and N2 . The total contr act price was $2 67,43 7 .1 0. Of th is amount $2 41,9 66.9 0, was paid during the fi scal year . CONTRACT #2 The purcha se of 3 ad diti onal Marine propuls ion un it s . Two of these un it s to be used on the Hecla II vess el wh ile one will remain as a spare un it. The to tal contract price was $1 78 ,2 90 .0 0.

Of th is amoun t, $161, 31 0. 00 was paid during the fis cal year . 12 7

Public Accounts Friday, November 24, 1978 PU BL IC ACCOUNTS COMMITTEE MEET IN G, TUES DAY, JULY 4, 1978 RE: MEDI CAL PRODUCTS INST ITU TE IN C. ,W IN NIPEG , $35 ,5 80 .00 (PAGE 209 ) QUES TIO N BY MR . WILSON "Co uld I have a bre akdown of the Medi cal Products In sti tute of Win nipe g? " RE QUESTED INF ORMATIO N The payment of $3 5,5 80 .0 0 to the Medical Products Ins ti tute , In c . was a grant made by the Department of In dustry & Commer ce from appropr iation 2C- 2, Scie nc e & Technology . 12 8

Public Accounts Friday, November 24, 1978 PUBL IC ACCOUNTS COMMITTEE MEET ING , TUES DAY, JULY 4, 19 78 RE: MTV LT D. , WI NNI PEG , $9 7,75 1.5 4 (P AGE 212) STIO N BY MR . WILSO N "I 'm ju st interes ted in what MTV . Lt d. , Winnipeg mig ht be , $9 7,7 5 1.5 4. If it coul d be explai ned to me I don 't ne ces sarily need a br ea kdown ; if you ca n't give me the answer then I'l l requ est on e.

" JESTED IN FORMATION The ma jo rit y of the payment of $9 7,7 51. 54 were made by the Depart ment of Consum er , Corporate & In ternal Ser vices (Adverti sing Au dit and Medi a Co-o rdin ation Cent re) for the pur ch ase of radio and te levi sion broadc ast time on behal f of Government Departments , Age ncies and Crown Corporations . These accou nts are paid ini tially by the Advert isin g Audi t and Media Co-o rdi nation Centre and su bs equently recovered from the Depa rtme nt, Agency or Crow n Corporation .

Inclu ded in th is total is approxima te ly $1, 200 . pai d fo r the production of the ma te rial use d on the broa dcas ts . Inclu ded in th is to tal are payments to CKY AM/FM, an as soci ated company , th at have been merged under the sa me head ing . This amo unt is spl it bet ween the two organi zation s as fol lows : MTV . Limited $ 78 ,7 81 .2 4 CKY AM/FM 18 ,97 0 .3 0 $ 97,75 1.5 4 There is a further amount of $2,63 3.3 0 to CKY AM/FM on page 16 6 of the Su pplement to the Public Accou nts . 12 9

Public Accounts Friday, November 24, 19 78 �U BLI C ACCOUNTS COMMITTEE MEETING , TUES DAY, JULY 4, 1978 RE : ST EVENS & SON LTD . WIN NI PEG , $1 26 ,93 7.1 6 (P AGE 239 ) QU ESTIO N BY MR . WILSO N "Ag ain , because I haven 't got the answer on the examinat of the emergency and purc ha se of medic al su ppli es I woul lik e a breakd own of St evens & Son Lt d. , $1 26,93 7.1 6? What I' m trying to est a blis h , if I get this list, is to whether th ese were indeed emergency purc hases or no t?

REQUESTED INFO RMATIO N Beca us e the acco unt for St evens & So n Ltd . is com pri sed of several hundred in voi ces , many of wh ic h are for smal l amo un ts , the account was fir st st ra tif ied , as fol lows to determine the most si gni fic ant purch as es and the Depar tment resp ons ible for thes e purch ases : Dollar No . of In voi ce Value In voi ces % Amounts % $0 - $1 00 178 49% $ 8,3 45 7 101 - 500 13 0 36 20 , 609 16 501 - 1, 000 17 5 11 ,8 33 9 Over 1, 000 37 10 86 , 15 0 6.8 362 10 0% $ 126 ,93 7 100% 13 0

Public Accounts Friday, November 24, 19 78 )e,Eartment $0-$1 00 $1 01 -$ 5 00 $5 01 -$ 1, 000 Over $1, 000 \gri cul ture $ 312 $ 2, 313 $ $ 1, 564 >ublic works 30 leal th & Socia l Devel opment 7 ' 12 0 17 ,096 11 ,8 33 84 , 586 Lin es , Resou rces & Envi ronmental Management 215 'ouri sm Recreati on & Cultural Af fairs 325 ol lege s & Uni ver si ti es Affairs 608 660 enewa ble Resou rces & Trans port atio n Se rvi ces 27 5 $ 8' 34 5 $ 20 ,6 09 $ 11 ,8 33 $ 86, 150 1e st rati fi ca tion indic ates that 10 % of the in voices 3prese nt 68% of the amo unt pai d to the sup plier and that 1e Department of Healt h & So cial Develop ment was respons ible >r the ma jo rit y of the purch ase s .

Le attached sch edule pres ents the det ails of the it ems Lrchased in th e over $1, 000 ca tegory along wit h an �ication of whether or not the se were emergency purchas es . 131

Public Accounts Friday, November 24, 1978 PUBLIC ACCOUNTS COMMITTEE MEETI NG , TUES DAY, JULY 4, 19 78 .RE : WASHTRONIC 'S, LT D. , WINNI PEG , $3 98 ,9 48 .1 1 (PAGE 25 0) QUESTIO N BY MR . WILSON "I 'm su re there 's a simple explan ation for th is, but unde Washtron ic 's Lt d. , al most $400 ,0 00 .0 0 - the second it em . would th is be for pur chas ing equip ment to set up our own carwash equi pment in the new government garage , or wo uld th is be for washi ng government ca rs ? It is obvious th ey are an equip ment dea ler , so maybe I'l l ask for a brea kdow and then we will see what it 's fo r.

" REQUE STED IN FORMATION The payments of $3 98 ,9 48 .1 1 to Washtron ic 's Ltd . we re mac for the follo wi ng : DEPARTMENT OF TOURI SM, REC REATIO N & CU LTURAL AFFAI RS Pur chase of repair parts and su ppli es . $ 46 . DEPARTMENT OF HI GHWAYS Purcha se of repair parts and su ppli es . DEPARTMENT OF NORTHERN AFFAIRS Pu rc has e of repair parts and su pplie s .

DEPARTMENT OF IN DUSTR Y & COMMERCE Pa yment of fe as ib il it y st udi es incen t ives as si st ance grant . �A NIT OBA TRADIN G CORPORATIO N Pu rc has e of bu s washers to fill orders receiv ed fro m Lima , Peru . 13 2 3,0 75 . 97. 1, 75 0 . 39 3, 978 . $3 98,9 48 ,

Public Accounts Friday, November 24, 1978 .PUB LIC ACCOUNTS COMMI TTEE MEET ING , TUES DAY, JULY 4, 1978 ·RE : WINS TON LEAT HER S , WIN NIPE G , $15, 031 .0 0 (P AGE 25 4) UE STIO N BY MR. ORCHARD "Mr .

Chair ma n, could I get a brea kdown on an it em , Winst on Leathe rs , Win ni peg , $15, 03 1.0 0?" EQUESTED INF ORMATION The payments of $15, 03 1 .0 0 to Wins ton Leathers , Winnip eg, were made for th e fo llo wi ng : DEPARTMENT OF PUBLIC WORKS Pu rcha se of art work for an art wall in the Portage la Pra irie Office Buil di ng $ 15, 000 .0 0 DEPARTMENT OF TOURI SM, RECR EATI ON & CU LTURAL AFFAIRS Re : Manitoba Ol ympic Ex hibition - renta l fee for si g ned print titled Fl ag Wes t 13 3 31.00 $ 15, 03 1.0 0

Public Accounts Friday, November 24, 1978 rU BL IC ACCOUNTS COMMI TTEE MEETIN G, TUES DAY, JULY 4, 1978 RE : BRENT ZANDER, $6 3, 07 6 .8 0, AND BR IAN ZANDER, $2 9 ,63 5.05, SWAN RIV ER, (PAGE 25 5) QU ESTI ON BY MR . ORCHARD "At the bott om of the page on 255 , tw o it ems , Br ent za nde Bria n Za nder . Could I get a brea kout on the se two ite ms ?

RE QUESTED INF ORMATION The payments of $6 3, 076 .8 0 to Br ent Za nder were made for renta l of equi pment , incl uding operat or and all operatin g costs by th e fol lo wing depart men ts : Depart ment of Highway s $ 6,8 53.43 Department of Min es , Re sour ces & Envi ronmen ta l Mana gemen t 55 ,5 02.62 Department of Renewab le Resources & Transportation Se rvices 72 0 .7 5 $ 63,0 76 .8 0 The payments of $2 9 ,63 5. 03 to Bria n Za nder were made for the rental of equip ment , in cl uding operat or and all operat ing costs by the follo win g departments : Depar tment of Hi ghways $ 28 , 499 .3 � Department of Renewab le Re sources & Transportation Ser vices 1, 13 5.6� $ 29 ,6 35.0: 134

INVOICE INVOICE � ,DATE , I'IEMS PURClU\SED DEPARIMENI' OF HEALTH & SOCIAL DEVELOPMENT 67679 April 1, 1976 1 E & J power wheelchair 68890 April 27, 1976 swabs , nedicine glasses, catheters, syringes, etc . 68962 April 28, 1976 1 traveller chair & 5 universal chairs 67737 April 2, 1976 960 of A.D.A. , 1 oz . 69761 May 14 , 1976 various i tans for ostony program 69890 May 18 ,1 976 1 solid state power chair 67606 ...

March 30 , 1976 1 E & J Universal Wheelchair w Ul 70468 June 1, 1976 1 E & J power wheelchair 70177 May 25, 1976 1 E & J power wheelchair 70178 May 25, 1976 1 E & J power wheelchair 70175 M'ly 25, 1976 1 E & J power wheelchair 70469 June 1, 1976 1 E & J power wheelchair 70176 May 25, 1976 1 E & J power wheelchair 73276 July 27, 1976 30 E & J wheelchairs 73698 June 8, 1976 4 E & J lighbNeight wheelchairs 1\M){]NT PUroli\SED BY $ 1,4 40 .45 Medical SuJ;Plies & Hane Care Equir:rnent Branch 1,02 7. 73 Selkirk Mental Health Centre 1,61 5.5 0 Medical Suj:plies & Hane Care Equipnent Branch 1,5 92.6 4 Brandon Mental Health Centre 5,552.2 7 Medical Suj:plies & Hane Care Equiprent Branch 1,5 52.05 Medical suwlies & Hane Care Equir:rnent Branch 1,02 9 .oo Medical Suj:plies & Hane Care Equipnent Branch 1,5 13 .3 5 Medical Suj:plies & Hane Care Equir:rnent Branch 1,42 7.4 0 Medical Supplies & Hane Care Equir:rnent Branch 1, 440 .45 Medical Suj:plies & Hane Care Equir:rnent Branch 1, 440 .45 Medical Supplies & Hane Care Equir:rnent Branch 1,4 40.45 Medical Suwlies & Hane Care Equipnent Branch 1,468 .35 Medical Suwlies & Hare Care Equir:rnent Branch 6,1 12 .8 5 Medical Suj:plies & Hane Care Equipnent Branch 1, 120 .00 Selki:tk Mental Health Centre .

TYPE OF PUROIASE ORDER Emergency Purchasing Bureau Emergency Purchasing Bureau Purchasing Bureau Emergency Purchasing Bureau Emergency Emergency Emergency Emergency Emergency Emergency Purchasing Bureau Purchasing Bureau ., .. a: Ill -:: '2 zcr o= < n Cl)> 3 n ern Cl) 0 .. c 11.) ::::1 ,j::o -� Ill ... CO ..... CXI

INVOICE INVOICE NO_. __ DATE ITEMS PURCHASED 74329 August 19 , 1976 25 E & J wheelchairs $ 73548 August 3, 1976 l E & J power wheelchair 73545 August 3, 19 76 l E & J power wheelchair 74978 Sept . 3, 1976 5 E & J wheelchairs 75084 Sept . 8, 1976 5 E & J wheelchairs 75824 Sept. 24, 1976 l E & J power wheelchair 75780 Sept . 23, 1976 l E & J power wheelchair ... w 75992 Sept . 29, 1976 27 E & Jw heelchairs en 77382 Oct. 27 , 1976 20 cases of catheters 76847 Oct. 19 , 1976 various i terrs for ostomy program 76804 Oct. 18 , 1976 1 E & J power whee

Document details

Collection	Manitoba — Debates (Hansard)
Citation	31-3-pa2
Type	hansard
Volume / chapter	31st 3rd hansardpdf pa2.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	77424a61ba5e5c10f78529f14e8b6ba86b9ca445

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