Manitoba Hansard — 3 May 1979 (Sitting 53B, 31st Legislature, 3rd Session)

31-3-53b

Manitoba — Debates (Hansard)

ISSN 0542-5492 Third Session - Thirty-First Legislature of the Legislative Assembly of Manitoba DEBATES and PROCEEDINGS 28 Elizabeth 11 Published under the authority of The Honourable Harry E. Graham Speaker VOL. XXVII No. 538 8:00 P.M. Thursday, May 3, 1979 Office of the Queen's Printer for the Province of Manitoba

• LEGISLATIVE ASSEMBLY OF MANITOBA Thursday , May 3, 1979 Time: 8:00 p.m. SUPPLY - ECONOMIC DEVELOPMENT MR. CHAIRMAN: Committee come to order . Page 25, Resolution 37, (i)(1)-pass- the Honourable Member for Transcona . MR. PARASIUK: Thank you .

In the discussions of some of the problems of small enterprises and looking at the description of the Canada-Manitoba Industria l Sub-Agreement, and I'm pre-empting that portion a wee bit, but I don 't think so because both of them overlap , there is a description of a number of things that are done and also in the Annual Report there 's a description of a number of things that are done .

Very little of it seems to relate to the whole question of financing and venture capital ' I know that business people argue that there is lack , a scarcity of financing ; that was one of the reasons why there was some pressure on the federal government to expand the role of the Small Business Development Bank .

At the same time , the federal government, through the Canad ian Development Corporation, saw fit to get involved with CanWest , the firm headed up by the former leader of the provincial Liberal Party , and I think that when CanWest was established, the intent was to supposedly fill a void in venture capita l.

If I can recall correctly , when that Corporation was launched , lzzy Asper was quite emphatic in saying that the private sector had come up with something in the order of $10 million , and I th ink someth ing in the order of $10 million had been provided by the Canadia n Development Corporation and there would be an attempt then to provide more venture capital in Manitoba . Unfortunately , what's happened since that time is that I don't think the provision of $10 million or $8 million in public moneys through the Canadian Development Corporation to CanWest has really filled the venture capital gap in Manitoba .

CanWest has used its leverage to buy controlling interes ts of Monarch Life , and I don't know if a scarcity of venture capital was involved there. They have also used their leverage to purchase Nature Foods , or some company in the United States, so I still see a continuing gap in Manitoba and probably in western Canada regarding the provision of venture cap ital. I wonder if the department is doing any work with respect to small enterprise development, in that I would think that big companies do have access to capital.

When CanWest got involved in trying to purchase Monarch Life, it did so by beating out a firm , or a bid put forward by Con Riley, I believe at the time, who was heading up Canadian Indemnity . So if there wasn 't a sca rcity of venture capital involved in that particular business development, at the same time the complaint still seems to be that small entrepreneurs trying to deve lop their ideas, have difficulty in getting financing and have difficulty in attracting investors here in Manitoba. One company that comes to mind very quickly is K- Cycle Engines .

I recall some of the comments about the difficulty ./ of that Professor or engineer at the university in getting together venture capital. A MEMBER: Christianson . MR. PARASIUK: Christianson , yes. So I am wondering if the department is doing anything in this respect. Is there something that the department perceives as a problem in addition to the comments that I get from business people saying that they think it is a problem . They are often being subjective or they are relating to personal experiences to me.

But I am wondering if the department has been doing any systematic work in this respect to determine whether in fact it is a real problem that exists confronting Manitoba business people , especially the smaller ones . MR. CHAIRMAN: The Honourable Minister . MR. JOHNSTON: Well the Member for Transcona brings up something that is a real concern to us. And the reason I say it is a rea l concern - and I would like to tell my colleagues that 1 am not trying to be agreeable again - one of the problems that . . . you know he brings up K- Cycle Engines and Mr. Christianson , who certainly has worked with our department.

They kept developing 3625

Thursday, May 3, 1979 and moving along ; they were going to the Federal Bank and we had some involvement with advice, etc . All of a sudden there didn 't seem to be anything happening too fast and the American government just came along and said , "You have $6 million. " The American government took the attitude of, you know , anything to do with energy , said we have $6 million for you for R and D to continue that program . That is very high risk money as the honourable member knows and the banks have a tendency not to move too fast on that.

We just weren 't in any position to take a look at the K- Cycle Engine from the point of view of putting money into it to that extent because it is risk capital. We would have to say from our point of view that if we were to take a look at any business coming into the Province of Manitoba , as we have talked about earlier in these discussions, the subject of, I'm keeping my options open, etc . for businesses that are established , etc ., we personally as a government wouldn't have that kind of dollars for risk capital in tha t case.

But I guess that all of us have to say that it is a little bit of a disappointment that that particular company couldn't find the funds in Manitoba or Canada to be able to support them . I don 't think that there 's anybody here that doesn 't believe that he sure might have someth ing. But I think the honourable member is also talking about the fact tha t I guess the financial houses are not too willing to move in Canada to support companies or ideas tha t people have with risk capital. . They usually are looking to loan money on the basis of orders or expans ion of approved businesses , etc .

I don't think that I would be right in saying that I would be happy with the situatio n the way it is. I certainly wish there was more risk capital. I certainly wish th at we were like Ontario , who says, " I've got $200 million to spend on expansion of business or bring business ." Our

part icular situation in Manitoba is to take a look at things that we know are proven . That's the way we're going . We don 't have it , and I guess I have to say, as I said just a couple of minutes ago , it's a little disappointing that there isn't more risk capital available in the province of Manitoba or in Canada . I think the member may be saying that the - I don 't know whether the member is saying the Bank Act should be changed or something of that nature. MR.

PARJ,SIUK: You know , I think that there has been some agreemen t between my colleague , the Member from Brandon and myself and the Minister on some of the problems , because I think some of the problems are problems that faced Manitoba 25 years ago , 15 years ago , 5 years ago , today , and they 'll be facing Manitoba 5 years from now. I think we're dealing with a number of structural problems, and they're going to take some time to try and overcome , and while I think we have some agreement in defining the problems , you know , I don 't think that we'll necessarily have agrelement in com ing up with solutions .

At the same time , what I'm pointing out are dilemmas , they 're dilemmas . If in fact you don 't have vent re capital being formed in the economy then do you have some different ways of possibly trying to bring that about. You might try and do something with the Bank Act. You might try and do somet hing with respect to tax incentives and people have talked about doing something about capital gains taxation , but again , if you do something there , do you want to direct it.

Do you want to put some strings on it so that , if in fact you put in some incentives for venture capital formation, that it's actually used as venture capital and not used to buy out Monarch Life . Because my point about CanWest gave in the example I about CanWest is that I think we have in Canada and as Manitoba taxpayers put some money into a company that ostensibly was set up to provide venture capital to western Canada and it 's not doing that. MR. JOHNSTON: No, I just didn 't catch the last sentence . MR.

PARASIUK: Ostensibly CanWest was set up to provide venture capital in western Canada. 1 can recall when the company was established and I know that that is what the financial pages were saying, that the officials of that company said was going to happen . And if you can recall, and the Minister would recall the statements of the chairman of that company when he was member of this Le!Jislature , talked about western alienation , talked about the fact that we need more business development in western Canada. He was a very strong spokesperson in that respect.

Yet the thing that I find ironic and difficult to deal with , and I think is a dilemma facing our economy is that when the government and the private sector , in a partnersh ip, invested money into CanWest , creating $20 million capital pool with a fair amount of leverage in terms of borrowing money .

That money wasn 't used for venture purposes because buying out Monarch Life isn't necessarily , at least in the first instance, a move in the direction of providing more venture capital , unless of course Monarch Life might be seen as some institution in the future to provide a greater pool of venture capital , at which point I have to tip my hat to the present Chairman of CanWest for being a lot more canny than I give him credit for , in that he is using this original $20 million investment pool to gain control of some larger financ ial institu tions and through that somehow 3626

,- Thursday, May 3, 1979 more venturesome capital in western Canada. But I don 't think that that's going to happen , so I think that we have still got a problem. That's the point that I am making. Despite as a taxpayer having put some money into CanWest through the Canadian Develo pmen t Corporation, I then wonder whether in fact the Canadian Development Corporation shouldn't be putting money into true venture capital pools or funds.

If it's going to put money into a private vehicle like that - so that's $10 million to put into that type of vehicle - maybe it should be putting money into a western Canadian venture capital fund. I don't know the exte nt to which Ministers of Industry and Commerce or Economic Development have made that pitch to the federal government.

I know that Ministers of Economic Development or Industry and Commerce are talking with the federal government, either with the Minister of Industry and Commerce or with the Minister in charge of The Board of Economic Development, about possible industrial strategies for sectors in Canada and a possible overall industrial policy. It would strike me that what surely will be required if the private sector is going to operate more effectively is the formation and provision and accessibility of more venture capital in western Canada. It doesn't seem to be happening is what I am saying.

There was one attempt with some public participation and nothing happened there. The private sector on it's own right now isn't doing that much. It then leaves the obvious question and this is where we might have some disagreement , but it does leave an obvious question . Does the public, federally and provincially, provincially by itself, does the public have any role in this respect? And I think that that's a question that probably was addressed by Duff Roblin when the Manitoba Development Fund was established .

And I know that you 're not the Minister responsible for the Manitoba Development Corporation , but frankly there still exists this gap in our economy right now. And I think that if you really went out and canvassed or did a survey of the business people in terms of what their biggest problem is, especially a person with a very good idea or a process, they will say that we lack the financing. We can 't get people to invest and that's why a lot of people came around to the Manitoba Development Fund. That's why many people came around to the Manitoba Development Corporation.

And granted, that's a very risky thing to get into . Venture cap ital obviously is very risky . At the same time, it strikes me that that's the way in which the private part of the mixed economy operates. It's going to operate on risks being taken and risks being financed. Now, the point is, if the risks aren 't being financed, then we won't really have that much development taking place, when you get right down to it, in terms of new development. So, you know, we have said that there are a number of public instruments that might be used .

There might be equity participation, there might be a public lending vehicle , there might be outright Crown corporations. Those are alternatives that we put forward. Some of them are in co-operation with the private sector, others aren't. Others are ones that are done by the Crown itself.

But at the same time there is an attempt to fill that gap with respect to venture capital and I think what the Minister is going to have to do, and I don't say that he is necessarily going to have to do it right now because he has assumed this portfolio fairly recently, but frankly, by next year, I think he is going to have to have some answers to that problem which we both jointly agree exists.

And frankly that is a challenge; that is a challenge that faced the government in 1959; that's the challenge that faced the government in 1966; that's the challenge that faced the government in 1969 and that's the challenge that faces the government in 1977 and faces it today in 1979. I don 't see any good answers and I don't see any positive alternatives coming forward.

I know that the Manitoba Development Corporation has been restricted in terms of the activity that it will undertake and that's not a surprise because the government, when seeking the mandate to govern, said that that's one of the things they would do. That's not a surprise but at the same time I do say to the Minister that he still has a problem to live with and there are certain things that are happening in relation to demand and in relation to lower exchange rates.

The economy has had some ups and we have had an improvement in the general Canadian economy since 1976 which was very much a low point; 1976-77, that year was very much a low point in the Canadian economy and it started picking up a bit. We don't know how we are going to progress in the future because we are very much tied to the American economy and I would think that a great deal of the exports that we have managed in Manitoba over the last year have really gone to the United States .

So what I am saying is that sometimes, and the Minister might remember this, over the last year I haven't really criticized the government very much on what I call the monthly indicators because I think the monthly indicators - there is a whole set of them - some of them are going to be favourable to this government and some of them aren't going to be favourable and then a year from now the ones that weren't favourable might be favourable and the ones that were favourable won't be, because that's the way the business cycle operates .

But that structural problem , the scarcity of capital formation and the scarcity of venture capital, that's a problem that's going to stay with you for a long time and it's a problem that existdd in 3627

Thursday, May 3, 1979 Manitoba , I would say, since the Second World War . So without getting involved in a lot of inflammatory rhetoric at this time on this, I do say that we do have a problem. I think that alternative ways of trying to field that problem are something that I think have to be pursued. We have had some different ideas.

I look forward to the Minister coming forward with his approach , coming forward with th is government's approach as to how it might fill what I would call that venture capital gap in western Canada and especially the venture capital gap in Manitoba, because there is some venture capital obviously being formed in Cllgary, there 's a lot of short-term wealth being created in Calgary right now .

They are developing that venture capital pool , or that capital pool , and it is quite venturesome as opposed to sort of the old money of Manitoba or the old money of Toronto which isn't nearly as venturesome as the new money that is being formed, or the new wealth that is being formed in Calgary , Edmonton and other places. So that's a big, big challenge fac ing this Minister . He may have some other approaches to put forward or some other ideas to maybe talk about it , about what he might do .

But I don 't see anything that specific yet in this package here to deal with that problem which I think is a fundamental problem facing the Manitoba economy . MR. JOHNSTON: Yes, well to approach the subject this way , tha t the investment houses naturally are very concerned about venture capital because , you know , they are dealing with the mone y invested with them by peop le and naturally they have to take every precaution to see that their money invested is going to be one that has a return.

They won 't always be successful but that's really the way The Bank Act and The Financial Act works at the present time . I guess we could say the same thing about governments that are using the public money and certainly we should be very sure on how it should be invested and have a return to the people . I can say to you that we have been - it was the first meeting of Economic Development when I had been the Minister for one week and I ended up in an economic development meeting in Ottawa. The Assistant Deputy, Mr.

Blicq, was with me and there was no question that his advice to me and his advice while we were in those meetings was that the Province of Manitoba had been pressing very hard , and we are still continuing to press very hard , on the federal government coming along on this particular program with us. We have something like that in Enterprise Manitoba as far as small business is concerned but it doesn't extend to the extent the member is talk ing about.

We really think that the federal government should be involved in setting up a venture capital type of fund that could be used in concert with the province - I guess you could call it a venture capital corporation, if you want to call it that , or company or anything of that nature - that would be based on possibly tax incentives or some way. I'm not prepared to say how it should be done but we have been pressing for that and I frankly think that the public generally would be in favour of something of that nature. Ontario and Quebec have established tax equity investment programs .

It is beyond our finances at the present time in Manitoba but we think that the federal government , for regional reasons, should be working towards western Canada and especially Manitoba . I don 't like to give the impress ion or have people think that Manitoba is the poor , second-class cousins. I think that we are a pretty damn good province . But we do need assistance from the federal government in this

part icular type of program . And I can say to the member that a poll that was taken in the province to the east of us - I guess I shouldn 't mention names but it's to the east of us - was, did the people agree that the province and federal government should put $62 million towards the Ford venture in Ontario? Sixty percent of the people said yes, surprising enough and I know that it doesn 't s it well with any of us that that type of thing is done with large companies , but we were talking about small companies . But they said yes, and they said yes for one reason only - tl1e creation of jobs.

And they felt that if the government could justify , federal or provincial, the creat ~ ion of jobs for people that that would have a return to the province over a period of time, that they didn't oppose that - 60 percent didn't oppose that. All 1 can say is that the member has sort of given me a challenge as Minister to keep working for that type of thing, to have venture capital in Manitoba one way or another . I have certain sympathies for the financial houses in that they are responsible to shareholders , etc.

But if there's a return to provinces or to Canada on the basis of money spent in the way of jobs , which create tax revenue , which creates all kinds of spin-offs, yes we would be in favour and we have been pressing the federal government to that extent . Now 1 don't want to let the honourable member think that I've been writing letters every day or standing up on a platform doing it. I can only say to him that in my first meeting that I had as an Economic Development Minister , we brought this forward , we brought it forward on the basis of regio nal disparities , etc . and we think that it should be done .

When the member speaks about the Manitoba Development Corporation and I know it is not under my jurisdiction , the actual concept of the Manitoba Development Corporation , although it has been criticized by I guess all sides , I think the opposition criticized us when we were government 3628 •

• Thursday, May 3, 1979 back in 1969 and we criticized when we were in opposition, but I think the general concept of being the lender of last resort type of thing of venture capital is not a bad one . But you know you have to have the resources and quite frankly we look to the big brother type of ope ration in this thing.

And 1 guess that Manitoba and the western provinces would be more concerned and more agreeable to this type of thing because you know it 's not too hard for Ontario governments and federal governments and Quebec governments to come up with programs when they have all that large population industry and everything and their risks are not as great We have to take the attitude and press the attitude that western Canada is developing and the risks are not as great here now. We have been trying to work that way.

As I said I had been a Minister for only a week when I was there , but last week I wrote Ottawa basically on the same subject I think the member knows that we are not going to get too many answers from Ottawa at the present time . 1 think that venture capital of any kind , no matter how you do it, maybe it's guarantee of loans, maybe it's something of that nature, but we should be able to work to try and do it And I think the public personally and I say this - I guess I could be quoted as I'm speaking in Estimates right now in the middle of what is public - I think the people generally would not mind government investment providing there is job creation and good return on dollars.

We won't always be right on every one but I think it has to be there. We basically agree that that should be done . I hope the member isn't thinking that I am agreeing with him to try and just get by the Estimates , because I think he knows me well enough if I disagreed I would tell him, but that's really what our opinion is at the present time. I would like to say to you that I am not the greatest fin ancial expert in the world as a Minister , but I do know that that is something that is necessary basically. MR. PARASIUK: I thank the Minister for that answer .

I picked out one point You know the survey that was done in Ontario - I think it was predictable.

I would have thought the 60 percent would have said yes, we should do that At the same time I think that one of the things that is a bit disappointing about that, because I think another type of result might be predictable, is that if we asked the people of Ontario , " Would you be willing to put $60 million into a venture capital fund?" which is again high risk, but you know if you invest $60 million into a number of ideas like the K-Cycle Engine or altering vehicles or things like that, you obviously , and this is just not throwing the money away , you obv iously probably could ge t a tremendous spin-off , or if you concentrated that venture capital in transpo rtation possibly or in one of your high technology areas that you talked about , you might get a tremendous return. · I don 't think we've been doing a very good job in terms of educating the public about this , because they might be willing to go along with , really I guess you 'd have to ultimately and I don 't want to say it in that pejorative a term called a bribe .

We will bribe for it to come to Ontario because they are an established company, they have an established process and it's a matter of, will they move on this side of the border or that side of the border , and ultimately , if you look at it without tryi ng to be that pejorative it comes down to being a bribe , but it's not really entrepreneurship . I like the K-Cycle idea much better.

So I think that somewhere along the line , I think that we have to be prepared to start saying " Well , if we're going to sta rt putting money up " I guess what I'm saying to you is that my preference would be much more for the venture capital one than for the incentives , and we talked about this a couple of days ago , because that is a big challenge facing you, and I don 't want to belabour the point , so I'll move on to a couple of quick questions . I don 't know if K-Cyc le has actually left Man itoba .

Have they left Manitoba because of the $6 million Research Grant from the States, or will they continue to develop this in Manitoba , but they are gett ing the Research Grant from the United States? I was following this up until a few months ago, and I've sort of lost track of it and I would think that since this is an important development in Manitoba, if the minister has any information in this respect I would really appreciate it MR. JOHNSTON : Even if we're out of Economic Development , I'll get the member the answer.

I'm of the understanding that the K-Cycle development and experimental work and what have you will probably be done in the United States because of the $6 million grant, but that's my understanding at the present time . I'd like to get him a very direct answer, because you know, I think the member has mentioned someth ing that he's been following up for two months , and you know for some reason or other things went quiet and now it's developed again. There was a discussion not more that three days ago, where I was informed that the American government had done this , and I'd like to get him the answer and I will.

MR. PARASIUK: I thank him for that , and I look forward to that answer, because you know , undoubtedly I think this will be something that will be discussed further, possibly this year or next 3629

Thursday, May 3, 1979 year. MR. JOHNSTON: Yes, I'd just like to answer - I've been passed a note by one of my people here . But the reply that we received on the venture capital thing from Ottawa was the proposal has been drafted but has been deferred until after the election. MR. PARASIUK: I have one final suggestion in this area . There are a number of ideas that the department and the Minister are pursuing , but one of the things that's amazed me about, in a sense , the lack of entrepreneurship of many Canadian so-called entrepreneurs, is the extent to which we have to rely on outside people .

I use the example of all terrain vehicles . I really am amazed that the advanced work on hovercrafts is being done in Britain and in France , and that advanced work on all terrain vehicles is being done in Britain and in France , because if ever a country seemed like a likely market for all er vehicles , it would surely be Canada.

And we've had a ten dency to invest a lot of money publicly on roads , building roads and upkeepin !~ roads in a climate which really isn't that conducive to roads , and we put traditional vehicles or conventional vehicles on these roads that we spend a huge pot of public money trying to upkeep .

What I can 't understand is why we don't invest some money , or why entrepreneurs don't invest some money into developing all terrain vehicles , which would requ ire less of a public investment in northem climes , in muskeg areas, in the roads , but may indeed require more of an investmen t ,. with respect to the moving hardware and you know, people were looking at the feasib ility of a hovercraft or using hovercrafts in northern Manitoba , northern Canada . And they don 't steer that accuratel y. So I think it's been dropped . I don 't know if it's being pursued much further .

And y•et the hovercraft is being used quite effectively in crossing the Engl ish Channe l right now. And may be what we had to do was do more R and 0 in Canada to adapt the hovercraft to our climate and to adapt it to a situation where very little expense would be used in terms of bulldozing a highway through the taiga or the bush up north , bulldoz ing the highway in the wintertime , at very little expense and using the all terrain vehicles .

So I'd like to ask the Minister if the department has kept up on what is or what isn't being done with respect to the development of all terrain vehicles in the world and in Canada, and to determine whether in fact they are doing any follow-up work to determine whether any entrepreneurial activity could take place in Manitoba in this respect. MR. JOHI~STON: I have to say to the member at the present time no, and I remember - I'm not sure how many years ago , the Minister in charge of highways , Mr.

Borowski, I believe, brought a hovercraft in - the Member for Brandon East may remember that, and it was tried out in northern Manitoba , etc. Well , I don 't know whether you were involved , but I do remember it being done for experimental reason s in northern Manitoba , but you know there 's nothing wrong with what Mr. Borowski did in bringing it in and trying it out , and I th ink the member is right in saying that it just didn 't handle right , etc.

I haven 't crossed the English Channel, but I can remember back as far as Expo in Montreal ; they had them working and they were going straight ahead at that time. But I have to say no. I have to say the R and 0 in the province of Manitoba hasn 't been as great as we'd like it to be. No question . I mentioned the other day that we were disappointed in that the R ancl 0 for Manitoba didn 't go up as high as others when the Federal government made their change.

We complained about that , but you know, I don 't like to get into examples or sta rt bringing up things that are way back , but one of the reasons for the ship-building industry in Scotland or England is because of the close relationship to the univers ities which kept those th ings abreast at all times , and I think I mentioned the other day that we have to have a close relation to the universities, but we also have to have people who are prepared to work in the technical centres, people wl1o work in the technical centres are not necessarily research people but practical people , who know how things go on.

We have started to work that way. We've started to work that way under the enterprise program, but in a very small way. But there 's no question that the development of relationship of business to universities or technical advancement has to be there . One man with an idea or one man who 's a good scientist can build an empire . I'm starting to sound philosophical , but I go back to the business that 1 was in before , which was the concrete anchoring busine ss, anchors and we wanted a machine that would put an anchor into concrete but it would have a stop rotation and it would stop and start.

Well , the company worked with Bosch in Germany and one man developed that. And they practically locked him in a vault. I've given a couple of examples and there 's no quest ion that our relationship in Manitoba with research and development with universities and technology centres hasn 't been as great as it should be, and I might say not as good as it should be all across Canada. All across Canada. I think also , in your medical fields and what have you , it can be there . I guess that I have to go back to the challenges that I gave the member earlier of light machinery, 3630

Thursday, May 3, 1979 food products, development, etc ., is the program we're working to, and I would expec t the member one year from now if we haven't made any progress on it to be very critical, but that's our ideas at the present time . MR. CHAIRMAN: The Honourable Member for Minnedosa. MR. BLAKE: Well, Mr. Chairman, it's just coincidental that we happen to be talking about hovercraft and channel crossings, and ship building in England, because I had an announcement of a non-political nature to make that Margaret Thatcher just won a majority government in England . MR. EVANS: I heard that an hour ago . MR.

JOHNSTON: Can I say to the Honourable Members of the Opposition, it is all right if the Chairman and Minister tap too? MR. CHAIRMAN: Order please. The Member for Brandon East. MR. EVANS: Mr. Chairman, I know it's very easy to begin to wander all over the place, and I think we've been doing a little bit of that, which is interesting and all that and some of the items 1 think we were discussing should really be discussed under (k), because here we're going to be talking about the Research Council and the possibilities of some spinoff. But getting back to (

i) per se, the Small Enterprise Development , could we get some idea as to how many personnel are working in that Small Enterprise Development division or branch at the present time; some idea? MR. JOHNSTON: Yes, Mr. Chairman, we have under (i), 10(2)(i), we have 16 people and it won't take me long to tell you . We have 4 staff for overall administration : 1 general director ; 1 administrative secretary ; 2 word processing people. Four staff for Small Enterprise Development: 1 director, small enterprise development , and 3 development officers .

We have 1 staff as a project manager leading the rural small enterprise incentive components for the industrial sub-agreement. We have 1 staff as a director leading the community commercial development and that is also in the industrial infrastructure component under the Development Agreement. We have 1 staff as a project man leading the Enterprise Development centre in Brandon . Let me explain to the member that the Brandon facility will be similar to the Dauphin facility . We have 2 staff who are for the Enterprise Development Centre in Dauphin, 1 senior development officer and 1 clerk-typist.

We have 1 staff . for regional officer at Portage Ia Prairie : 1 development officer. We have 2 staff, are for small assistance centres: 1 development officer and 1 administrative secretary . That's the 16 people in this department. And the 16 people in this department, you recognize that several of them are not paid by the Manitoba Enterprise Program , but do supervision within those programs with people that are working in it under the sub-Agreement on a 60-40 split. MR. EVANS: Well , Mr. Chairman, I would gather that the thrust or the emphasis of this group tends to be essentially non-Winnipeg oriented .

I am not suggesting there is no one involved in Winnipeg problems, but there has been a tendency over the years, many many years, I would think for the department to spend a lot of effort in this small enterprise area outside of Winnipeg, the basis being they probably need more help outside of Winnipeg , that in the City of Winnipeg you have more facilities, you have more banking facilities , and you have more, well, the cit y itself has an industrial development department, and so on. I want to ask the Minister whether my impression is correct, if it's still essentially rural oriented. MR.

JOHNSTON: I would say, you know , I'd have to answer "yes" to that. The lists that I read you earlier of general counselling, etc ., are certainly 100 urban , 325 rural ; new venture counselling, 20 urban, 150 rural; expansion counselling , 60 urban, 100 rural. Obviously , I'd have to answer "yes" to that, but the member is quite right that we work closely with Winnipeg and as a matter of fact, Winnipeg 's new Industrial Commissioner , I think they call him - I say I think, I don 't think that's the exact name, but he's similar to your Brandon Industrial Commissioner , working in Winnipeg .

He's just been brought on stream in the last three months or so in Winnipeg, and we're starting to develop a close liaison with him . We don't back off assistance to small business in Winnipeg . We don't get as many calls. I think I can approach a question that the Member for Transcona asked a little earlier about the fact that some of his constituents in Transcona say, well, I'm part of Manitoba too and I probably need some 3631

Thursday, May 3, 1979 help, why is it all rural Manitoba? It's a beginning in rural Manitoba because I think that 's the place where we have to lead to first. I hope the councillors of Winnipeg aren 't in the room, but there's no question that Winnipeg is 500,000 people or better , which is half of the Province of Manitoba . It's an unfortunate situat ion.

I think we'd like to have a Saskatoon and Regina , and a Calgary and Edmonton in this province as much as possible, but that happens to be the fact of life and our drive has . .. well , certainly I think that I'd probably be railroaded out of the room by my colleagues who are sitting over the re if I didn't say that we have to do something to expand the economy of manufacturing, etc., in rural Manitoba . MR. EVAIIIS: Yes.

Now this whole area of small enterprise developmen t - I want to confine my remarks mainly to the manufacturing side because retail service secto r is very respons ive to the size of the population and the level of farm income , and as farm income goes so does a lot of other thin 1 ~s in this province , and unfortunately we don 't have as much control over farm income as we'd like. You know , prices, the weather and you name it.

Whether it be floods or whether it be droughts , but there have been some very , very interest ing sma ll enterprise developments in rural Manitoba , and some of them are natural for the area . The only proble m is the y tend to be very tiny , and they are constrained from developing because they just don 't have the market. I recall on one occasion being in Birtle , Manitoba , where we participated in the off icial open ing of a very tiny abattoir, and where they also made sausages . My friend Norm Bergman has left the hall . . . they make delicious hot dogs , the weiners.

In fact , I recall when we ope ned up the building they had a stri g of frankfurters across and this was our ribbon , officially open ing the abatto ir and sausage factory. But , oh I don 't know , they had three people -(lnjte we sample d a lot , I think Norm Bergman ate as many hot dogs as everybody else around . They were really goo d. But you kno w, here was something rather interesting because there was a person there who had an interest in that, and managed to get a little bit of money and was doing someth ing. I don 't know how it's doing today , but it's limited by that local market area.

Another example , in Rivers , a seed cleaning plant. They did have one many years back. They unfortunately had a fire , although now they 've come up with a brand new facility , it's quite good and a lot of local money and people are enthusiastic , and so on. These are very interesting developm•~nts and \ve can go around Minnedosa - I'm not sure how the agricultural implements company is doing now, they've had their ups and downs . But you can go do Boissevain . . . A MEMBER: If they get the orde rs, they can produce . MR.

EVAt~S : Well you see there again, you get back to the problem of the EVANS: Well you see EVA S: Well you see market. See I would disagree with my colleague. I don't think it's a lack of finance so much . I think maybe that was the case about 10-15 years ago . Today I think the savings are around ; I think there is money around . If the opportunities are there you can find the capital, the finance . But you go to Boissevain , I remember the Dring Enterprises, making laminated structures , or you can go all over the province . You go to Wink ler and to Altona, and so on .

And some people are very successful and some companies try to grow a bit and then they grow a little too fast and then they may get into trouble and get over thei r head , and before you know it they may be bankrupt. But 1 was just wondering - and we may not have this information - but I was just wondering, can the Minister tell us, or can his staff tell us, through the Minister , whether they detect any sort of trend in Manitoba where some of the towns are developing small manufacturing centres? I'm not talking about the service sector ; I am talking about manufacturing .

And you might make an argument , well , they do relate to the size of the town . Like when you get a town like Steinbach you're going to see a little more manufacturing than you will in Rosenort , which is much smaller . You know , Virden has some possibilities , and Minnedosa , because they 're a little bigger . Well , they're 2,000-plu s. So , this is the dilemma.

If your resources are limited , if you have only got so muc h money and you 've only got so many staff members , do you just sit back and sort of respond to whoever wherever or do you try to concentrate and do your best in those towns , in those communities where there is the greatest potential. So this is a real tricky one , because you don 't like to say " no" to anyone , but do you detect , is there any trend of some centres in Manitoba developing as manufacturing centres?

I'm just going to guess : Winkler , Altona - almost twin cities - and Morden, the three cities there , and Steinbach. -(Interjections) - Morden Canneries , yes. Morden , Winkler , Altona seem to be. So we hear of some of these towns but is there any . . . You know , maybe there ssn't any trend ; maybe there isn't any information , but I am really curious . I am interested in this . 1 have been around the province a lot and there are some rather interesting things that do happen on a very local level. You never read about them here in Winnipeg papers , but nevertheless 3632

Thursday, May 3, 1979 they are happening out there. And they are, as I said , unfortunately co nfined usually by the local market. If they can break through that and then start exporting outside of their local area then they have an opportunity to grow and then you have a real positive factor at work for that town. So I don 't know whether the Minister has had a chance to get that information , but does the staff detect any trend in the development of small manufacturing around the province? MR. JOHNSTON: Yes. I can say " yes". We are very encouraged.

He mentioned some areas, oh, Steinbach, Winkler, Morden and through southern Manitoba and Virden - I wouldn't dare leave Virden out - and Minnedosa. No question - there is no question. And all of these smaller communities are working very hard and many of them, through their Councils, are moving ahead to try and go out and develop industry on their own or drag them in, or start them up, or encourage it.

I'd like to say that one of the problems that we have , dealing with the smaller communities in the department, they work with us very closely but we have this problem also , that sometimes they are a little hesitant to maybe trust us. In other words , if their Development Officer or somebody is working on something and they come to the province, and they usua lly end up with us - I have used maybe the wrong word when I say " trust " - but they are always concerned that if they tell somebody that they 're working with somebody and it gets out somebody else is going to be going after them .

It's not really a good situation to have too much competition between the towns and municipalities. I believe in the compe titio n, but it can be overly done . But, you know , you mention southern Manitoba, and I said Minnedosa . I would say that Swan River, and when you talk about Birt le-Russell; there are all kinds of applications coming in to the program for requests for development of manuf acturing in these small areas , and there is no question that it's growing. I have to say to the member .that I am encouraged by it. Maybe I am overoptimistic , but I am encouraged by what's happening in the rural areas .

We can't always agree to every idea that comes along but we cer tainly look at all of them. If the Member for Brandon East is interested at all, I can say that the group in Brandon especially seem to be an exceptionally aggress ive group. Brandon has hired their Commissioner and they are working very hard. They are coming in and being involved with us all the time . MR.

EVANS: Yes, well actually the Minister answered a question that I was going to ask him and I think maybe I will defer other remarks on that until we get to (k), but one other question and that is: you talked about the north and you mentioned Swan River, which is fine, but is the department doing much in areas such as Flin Flon , The Pas, Lynn Lake , Leaf Rapids , Thompson; are you getting many inq uiries there? You know, you are in a different geographical zone ; you are in a mining area, a forestry area, you have population more concentrated in those places, and so on.

Or has that more or less been left to the NorM an Development Corporation , essentially , and perhaps the Department of Northern Affairs? MR. JOHNSTON: Well certainly the NorMan Development Corporation is active . We have not had as much response from the north as we'd like, and we think that northern Manitoba has as much access into the western markets as anybody . They certainly have trouble getting into the eastern markets but they certainly have as much access to western markets as anybody. But to be honest, we have not had as much come from the north as we'd like , and certainly we encourage it.

We are doing a study in Thompson at the present time, and we're doing a study in The Pas at the present time at the request of the Town Council, to make an examination of the economic cir cumstance in the area and try to advise the businesses in that area the best way to go. I don 't have a copy of one of the studies that we've done but , you know, the areas that we have done are very large print-outs of all the businesses , what they are involved in, volume of business and then, of course, we go into the potential of business for the businesses that are there at the present time .

We don 't go too far into detail about what maybe new businesses could come into those area; we are concentrating on the businesses that are there on the basis of what is the best expansion for them . And we're working in The Pas and Thompson at the present time and certainly we want activity in the north . I just have a note here : Received an application for assistance under the Industrial Incentive Program this week and we are meeting with the people of Thompson next Friday on that program that we were speaking of, that's the Infrastructure Program , and this type of program will be worked on in Thompson .

There is no question that, at the present time , the north is not moving as fast as we'd like it, but again I have to be an optimist. I think that they're coming out of their period of, 1 guess you 3633

Thursday, May 3, 1979 might call it doldrums or economic expansion has not been moving too fast, I think they 're coming out of it , but I wouldn't say to the member that it will happen next year. I think it will take two to three years to have it come back to where it was . MR. EVAt•s: I just have one last question in this area and that is with respect to Gimli.

I know the Industrial Park in Gimli is under the administration of, I think , the Department of Government Services , as such , but I'm sure the Department of Economic Development is still very much involved in the small enterprise section, should be involved, eh, in attracting people in there. 1 think that it had sorne very interesting enterprises in there over the years. Some have made it; some have moved out , for different reasons ; some have folded , whatever, but I gather there is space there. Generally speaking , I think the facilities are excellent.

I know the CNR has still got this big railway locomot iv;3 training school which is very good , and I know there are other things happening outside of the Girnli Industrial Park. But my question pertains to the Gimli Industrial Park . Is this Small Enterprise Development

Section working there, or maybe it's Business Development, I don't know, but is there any work going on by this group with Gimli and , if so, what's happening? Is there any possibilit ies of attrac ti ng a new industry there? I know there is one that had some trouble recently that set up a few years ago , Viscount Homes , is it? Is it Viscount Homes? MR. JOHr•sTON: No, I think you 're speaking of the home company , VIP, is it? Is that the name of it? Is that the one that just had the bankruptcy problems? Modular Homes, yes. MR.

EVAIIIS: Yes, it was in the papers and I don 't really want to go into why they had problems, you know, that's their business . But I am just wondering what are the possibilities for the Gimli Industrial Park, and how can you help them? MR. JOHIIoiSTON: Well , in the lists I gave you we have one small enterprise loan to Gimli Boat Works, aluminum boats , but that 's one small loan or forgiveable loan that has been done up there. The Girnli Industrial Park is a natural.

It has, well if you want to say, runways; it has accommodation; it has buildings, and I might say some of the buildings have to be upgraded, there is no qw~stion about that . I believe the Minister in charge of the Gimli Park , the Minister of Governmt~nt Services , would be prepared at any time if we came up with an industry that would move in there, would be very anxious to upgrade that park to the extent that it would have to be to get industry . But at the present time we haven 't been able to locate anything in there since the Modular went out and there are buildings available .

But the member must remember - and this is optimism again - the Gimli Park is 60 miles from Winnipeg , which is just tremendous. Maybe you thought I was going to say a detriment , but you know if you go to Ontario you will find a hhead Office in Toronto and a plant 100 miles away . But the Gimli Park is a natural with good transportation and everyth ing back and forth to have ,. people placed in it.

We think that we can locate people there , and I go back to the business that it's not going to be easy but we think we've got something that will attract and something we can present , and our people are continually showing it but , you know , we have to have the right business and we probably have to have research done and we have to probably have surveys done for anybody that's going in there , to make sure it's a natural. I'd, frankly , lik nothing better than to be able to find about three good businesses for Gimli Industrial Park .

The member may not agree with me, but if that happened I think I'd like to see the Minister of Government Services sell it to a developer to maintain it and get us off the hook for $600,000 a year , but that 's the ambitions we have fo r it. MR. EVANS: Okay , supplementary to that then, what is now at the Gimli Park? I know the CNR has this big training program and I do recall Ontario Central Airways had a base there , and I'm not sure whether they 're still operating but that was quite a little operation and there at one time was an aluminum boat manufacturer and they may still be there, I don't really know.

But this is my question , what are the businesses that are now at the Gimli Park? MR. JOHNSTON: Well , I, with red face I'd have to say to the member that I couldn't name them all off but I'd certainly be pleased to get him the list of people there at the present time. MR. CHAIRMAN: (iX1)-pass; (i)(2)-pass; (i)-pass ; (j)(1). The Member for Brandon East. MR. EVA.NS: I'd like to ask a couple of general questions here because now we're talking about the Man itoba Trading Corporation , unless the Minister can tell us that we are talking about staff 3634

Thursday, May 3, 1979 in addition to the Trading Corporation , but I would imagine these moneys , these salaries, and these expenditures do relate to the Manitoba Trading Corporation staff. So, that's one question . And if it isn't, if they relate to others than the Trading Corporation, we'd like to know . MR. JOHNSTON: Excuse me, Mr. Chairman, I heard the member 's question . Can he just give me a couple of minutes to . .. Mr. Chairman, the Manitoba Trading Corporat ion remains as

an act of ... but it will be used in the future as a functional tool of market development group to assist firms in export , bridge financing needs as requested by them . I think the member knows what the financing program was . This permits the Market Development officers to serve a more widely based group of firms than when the corporation was involved in individual transactions .

The Trading Corporation - we found ourselves in the position of servicing maybe two or three companies, and we found that those companies that we'd been servicing for quite a while, you know, had sort of graduated to the point where they should be able to do this and get their financing on their own . So, we have basically said that the Trading Corporation financing prog ram must be used in a much broader or - I don 't know that the word broader is right - but must be used for more companies than just getting involved with the two or three.

So, yes, we still have the financing program of the Manitoba Trading Corporation but we would like it to broaden its scope into working with more companies than they have been, and more small companies than they have been. I must say the ones that we were servicing that grew, started as small companies. We found that some companies , and this just started to happen , we found that we were doing the export papers for a company , charging them $24 or something for it, and when you looked at it, they were quite capable of doing it on their own now.

So, yes, it's still there and we want to broaden its activities from that point of view, that it will service more small companies . I think all the members know that if you can get this bridge financing at 6 percent , it 's pretty nice , but when you get to the point where you shou ld be able to finance it yourself, they should be graduated . But , when I say that there 's no critic isms , we just want to make sure it broadens its scope . It's there for a reason and we want to use it for that . MR.

EVANS: I understand then that there is essentially no change in its functioning from before this Minister took over . No change say from the prev ious administration . There may be some different emphasis but no change in the general paramete rs, that the MTC , Manitoba Trading Corporation Legislation still exists and the corporation, the staff - there 's really no restraint on any one, two , three , four avenues of endeavour that that corporation may be involved in. The Minister said he'd like to broaden the number of compan ies they 're deal ing with .

That 's fine , there 's no criticism, and I agree at some point - you know, how far do you hold a company 's hand in trying to promote their export business, and that's sort of an administ rative problem . I am not going to ask the question again , I'm just saying that I believe the parameters are generally the same, there's no change .

There may be some change in emphasis but no change in the general potential of that corporation, no change in the general direction, that it's still the key or chief vehicle to be used by the government, by the department to promote Manitoba made products outside of the boundaries of Manitoba . MR. JOHNSTON: Yes. I'd like to add though to the member that the Trading Corporation continues to provide export assistance although lim iting its direct sales function . We are not closing our options to the Manitoba Trading Corpo ration working as salesman for Manitoba .

We think that's a service for business in the provinc e, but we also believe that the best guy to sell his product is the guy making it or the guy working with the company . The men in the Corporation will be mainly involved in trying to identify products, or trying to identify areas where Manitoba products can be sold, and then working with businesses in Manitoba. After they identify an area and work with them we would expect the companies to hopefully be the sales people of their companies .

It wasn't all that successful when we were doing the selling because really the guy that owns the company or somebody that works in a company is probably the best salesman for the company . But we haven't closed our options . Certainly when we get involved , as I mentioned in Mexico or something like that, there may be language problems. There may be reasons why we should be the vehicle to help that person sell.

So, we haven 't closed the options there and we certainly have the Corporation bridge financing still available , but we are hoping and we are leaning toward identifying areas where Manitoba products can be sold . The men working in the Corporation are designated to certain types of industry, and they in turn will work with Manitoba industry that could sell in other areas. But , we don't take the attitude that we close off the options completely . I'd say to the honourable member that we don 't favour getting into agreements with companies where we're the commission agent or the commission salesman .

It hasn't really worked or we don't 3635

Thursday, May 3, 1979 feel worked that well. We think we should be identifying and work with them. If they don't have the capability of marketi ng themselves , I think we move in again and try to educate them how to market their products , but we haven't closed the door . We're still there to be of service . MR. EVANS: Well , right.

I think we can agree that to some extent at least the Trading Corporation was not able to pull off as many deals as I 'Nould have liked to see personally - hope springs eternal and I'm not critical of the staff or the department but we did make , I think , a valiant effort and I agree we shouldn 't over emphasize one or two or three firms to the detriment of others. I agree also let's not get into any financial backing or bridge financing when there are normal commercial financial vehicles to do that. By all means let that happen .

I think one thing that was different though for the Trad ing Corporation was at one point we had two or three salesmen, if you will, on the road. They really could not, 1 agree with the Minister , they could not sell the product of any one company better than that company could itself , by no means. But what they could do , I think the term was used by a friend of mine, they could bird dog . In other words they identify an area for some development and this is what happened in the case of the abattoirs that were sold in Panama, in Central America .

The person working out of Mexico City, if I recall at that time , I stand to be corrected but my memory tells me that he identified that there was some opportunity there . Having done so then we searched arou nd in Manit oba for a company that could deliver the goods. Once we found that company , which was Canadian Rogers Western Limited , it was their representatives who were actually doing the selling and of course the wheeling and dealing , and our man in that case could speak Spanish and English fluently so that he, I guess, was a translator and he did other things as well .

So I would gather that there are no field staff of the Trading Corporat ion as such now. I'm not sure so I'm going to ask that specifically. Are there any field staff? In other words are there any staff goin!~ around - I think some of our best markets may be in western Canada ; they may be in the upper mid-weste rn United States and they may be I think in the Third World countries in Mexico, Latin America . I think those are some of the better potent ial areas for Manitoba made manufactured goods .

At any rate , this is a very specific question , do we have any field staff who are goin£1 around searching for opportunities to bring back that information to Manitoba businessmen? MR. JOHNSTON: Yes, Mr. Chairman , we have 16 people still involved with the market development.

We have the general manager, who holds the sector responsibility for commercial development, and we have nine development officers , and one senior development officer for capital projects, one development officer for food and beverages , one senior development officer for health products and aerospace and electronics and electrical - I have trouble with that gentlemen , there is a very definite difference between the two , a senior development officer for machinery , a senior development officer for resource construction and transportation , a development officer for consumer products and furniture , a development officer for warehousing distribution , a development officer for apparel and a senior development officer for support services .

We have two administrative secretaries . We have two people , one co-ordinator and one development officer responsible for special projects , which is the new fighter aircraft program and then the Canadian Patrol Frigate Program , and we have two staff that are administration and financial officer and clerk of operations . We still maintain 16 people within that department who are designated into specific sectors to identify markets that can be used to work with businesses in Manitoba . MR. EVA.NS: Well these 16 people then , or the bulk of them, as I gather they 're more or less research officers, eh?

I mean , say, the Health Products man , is he or she looking , let 's say, at health product opportunities where we can sell - oh, I remember we were making some pacemakers here and Harco Electronic was one . For years we've been working with this company . This is a health products field .

Is this what the Minister's saying, that we've got someone who is designated for health products and he does the research , contacts the companies , make them available to export markets, or does that person actually go out into the field , into the potential market areas and do some prelimina ry market researc h, market surveying on his own and then come back, or are they all in-house? In other words , are they mainly Winnipeg based doing research and advising Manitoba business of opportunities to export out of the province , or are they also engaged in going out themselves , survey ing the situation first-hand?

MR. JOHNSTON: No, they 're not research and they 're not in-house . They maintain and expand or increase export for Manitoba , identify market destribution and channels , and I'm reading now but 1 think I've kind of touched on that for both foreign and domestic . They identify markets. They identify source of Manitoba suppliers , and they co-ordinate and utilize Federal services , both 3636

' ., .. .. .. .. ..... " ... Thursday, May 3, 1979 and foreign, and utilise Provincial Inter-department resources. They are not in-house researc h people; they are people that go out and try to identify markets for businesses in Manitoba . I might add that they certainly must be going somewhere; I seem to sign enough expense accounts for them, but they are moving around. MR. EVANS: Could the Minister give us, you know , an example. You know, one, two examples. Maybe his staff could give him some examples of - I don 't care whether it's health products or food products, you know .

Just like, how does the process - how does that process work? I think the Minister has fairly well explained it but, you know, you can sit in the office and identify opportunities and communicate to Manitoba businessmen. That's almost like a kind of research in a sense, eh? But it's another thing to get out there and test the market, so to speak , for the would-be exporter . MR. JOHNSTON: Well, you know , May 29, electronics , Mexico , Micro. We were involved with the financing of Romicon, Argentina, Harco , Gelaine Military Hospital, Turkey , Harco.

As I said we have been working mainly with two or three companies but the activities of companies assisted between February 28, 1979, or from April 1st, 1978 to February 29 - Companies Assisted , 289 versus 242 in 1977-78; Merchant and Agent transactions, 41; Number of Shipments, 59; Formal quotations made, 109; Countries sold, 20; Agents and Distributors appointed - we have appointed 19; Trade Fair participation - and I might say to the member that in this particular appropriation we have grants to help companies in Manitoba participate in Taade Fairs; Missions, about 10 to 13; and Seminars, 7 seminars , 215 people.

Now the member asked me a specific question of examples. I could give him the countries - well , Dubois Wild Rice, Edison Industries, Harco Electronics , Kipp Kelly , ManWest Engineering, Marco Tool , Natura Soil Conditioner , Northland Wild Rice, Sprague Wild Rice, those are what we have been dealing with and , as I said, we'd certainly like to expand that. MR. EVANS: I'll just interject for a moment. The Minister has given us various examples, which is fine, but I was wondering about the procedure .

Does that Trade Officer working in a specific area , whether it's electronics , or whatever it is, does he then go out to Turkey , to Mexico , with the businessman, or is he pretty well confined to Winnipeg? I'm just wondering, how is the procedure worked now? Just give one example of how the procedure works. MR. JOHNSTON: He doesn't necessarily go out with that company. Their mandate is to continually try to identify markets. Now I know that that's hard to explain . We just don't have them running around looking for markets, but we have a procedure and I'm sure it's fairly common.

We have a procedure where we might have companies in Manitoba, first of all, that are making a product. We try to identify markets for them. We also try to identify natural markets for things thtt are being made in Manitoba . I guess I would have to say that they're not out continually running around on their own trying to find a market. If there 's a Manitoba business that is producing something, they will work to try and find a market.

They don't necessarily have the people that they're working to find the market for with them the first trip , but certainly if we identify it, we take it to the company and we work with the company to try and go from there. But I wouldn't like the member to think that they're just sitting in Winnipeg thinking of things; they are working with people all the time . MR. EVANS: Well, it's my view , Mr. Chairman, that th is area is a very critical area for the department and I'm not suggesting some of the other areas aren't also critical , but this is one area, you know, if we could only pull it off .

This is a great potential for providing a basis of growth for Manitoba business because, if anything, we're limited - the size of our companies, the size of the operations of our manufacturers are limited by the relative ly small local market that we have, and if somehow you could break out, you know, break out of this and be able to search out opportunities beyond our borders, whether it be in Canada , the United States, or elsewhere. You know, we are doing something that's - you know, we're not just taking in one another's washing .

Let me give you an example: The Food and Beverage Industry in Manitoba is essentially a local market industry. The people who work manufacturing bread and biscuits, or soft drinks or beer, or whatever, in that industry sector , they 're Manitobans who are producing goods , foods and beverages for Manitobans . It's strictly a local market. There are some exceptions, but 1 doubt if we sell much bread, for example, outside of the Province of Manitoba . We make the bread here and we consume it here .

So that to that extent we are busy helping one another but it doesn't have the same potential for increasing the level of income in the province to the extent that we could have industries here who would sell their products outside of Manitoba . 3637

Thursday, May 3, 1979 You know, I think that this is - I don't really want to get off the topic , but it's not off the topic either - but I want to talk just for a minute about McKenzie Seeds Limited. This is a kind of industry I wish we had a little bit more of, where we bring the raw material into Manitoba, we process it, we package it, and 90 percent of the product is sold outside of the Province of Manitoba . I don 't know what the exact numbers are, but 90 percent's a good figure . Mr. Blicq can tell us; he's on the Board. It's a big number . It's 85, 90, 95, whatever , but this is an ideal industry.

We bring the raw material into Brandon . We process it. We package it. And then we sell it right across Canada from coast to coast , and we earn revenues for the provincial economy . And this is to me an ideal sort of set-up , so I say if we could identify more industrial opportunities where we could have our manufacturers making the product and earning revenues by selling the products not only in Manitoba but outside of the province so that we're bringing in new revenues , bringing in cash , bringing in moneys into the province . And we've had one or two compan ies that have been rather successful.

Kipp Kelly 's an excellent example of a company that's been successful , and if we could have more Kipp Kellys and if we could have more McKenzie Seeds , if we could have more of these companies that have some ability to make a product that has to be a fairly high value product to overcome the cost of transportation .

That 's why if you 're into the higher technology stuff , electroni c equipment , pacemakers , for example, and medical electronics , you know , they 're valuable enough that they could overcome the cost of transportation from Winnipeg , let's say, to Mexico City or to Turkey Or wherever they're going to. So I say, personally I'd like to see this area built up. I'd like to see - I know there 's a limit to how much you can do , but this is one area that really I commend to the Minister for further development.

I would also observe that , thus far at least , this government has chosen to foll ow the policy of the previous Administration , and that is, not to set up Trade Offices in other cities in North America , Europe , and elsewhere in the world as has been the case for Ontario, Quebec , Alberta, British Columbia.

Many , many Canadian provinces have Trade Offices , if you would believe, in London, Paris , Chicago , New York , Los Angeles , you name it, and in fact it gets a bit embarrassing when you go to some of these American cities , you see Minneapolis, the Ontario Trade Office next door to the Canadian Trade Commissioner's office. The Canadian Trade Commissioner's office is presumably serving all of Canada, including Manitoba, and down the hall is Ontario 's representative. There was some pressure a few years ago that we should set up an office perhaps in London - well , we used to have an office in London .

This was back in the sixties . Murray Armstrong was our Cons ul Trade Representative there , I think the term is Consul-General. Some provinces, as I say , continue to have offices in London and elsewhere . It was dec ided, I guess in around 1968, '69, to close that office and to continue to rely on the Federal Government , and I maintain that the Federal Government actually does have a very good Trade Commissioners ' service around the world - one of the best. . But the point is, in order to get full use of those Trade offices you have to be there . Your Manitoba business men have to be there .

Your Manitoba Department of Economic Development representatives have to b-e there in order to make those Trade reps knowledgeable and aware and understand that we have something here to sell, or that we're out there looking for some markets , and that seems to me to be one of the secrets of success . I would not advocate , and I hope the Minister will tell us in a minute that there is no intenti on to put offices around North America or Europe because I think that's very , very expensive and could be wasteful and duplicative of what's already in existence .

But I do say to him that it's very vital that your staff get out there and our Manitoba businessmen get out there and make sure that those Trade officers of the Federal Government , wherever they may be, whether they 're in Japan, or in Turkey , or in France or Mexico , wherever they are, that , you know , we have something to sell and we want their assistance in doing so.

And my own experiencE! is, once they are aware of what Manitoba wants to do , or some company wants to do , they will put their shoulder to the wheel , but if you don 't go to them , if they 're not made aware of it, then you don't get the service . They will respond , but you have to go after them . So I guess I'm asking the Minister ' (

a) Is there any intention to develop offices outside of Manitoba , as Ontario has done or Alberta has done? And (

b) Is there any program for making better use of the Canadian Jrrade Commissioner offices? MR. JOHNISTON: Well , yes, you know , we had the representative , not in my time, in Mexico, which is not with us any more . We have preferred to work for the Canadian Trade offices in Mexico and preferred to work with them everywhere . The Minister of Agriculture was in Mexico about two months ago with agricultural products and worked through the Canadian Trade office , and very successfully . We don't have any intention at the present time of setting up trade offices anywhere. When I say intention at the present time , it would have to show an awful cost-plus benefit in order to do it, 3638 ..

.. • .. Thursday, May 3, 1979 and we have just in the past two weeks had the Dutch Ambassador spend four day s in the Prov ince of Manitoba working with us. We've had some liaison with the European Common Market, we've had people here from Sweden, all working with us and looking at Manitoba. At the present time, we feel that we can service and work with those people with our particular em ployees who have to go there, if we had to go there or work with them .

But the re'd have to be shown a real cost benefit for us to start opening up offices that are very expensive to maintain, 1 agree it can be a pretty embarrassing. I wouldn't mind having a Manitoba House, same as Alberta has a London House or Alberta House in London , and that sort of thing, but we can 't at th e present time justify that lusury. I think I mentioned earlier on in the Estimates that we've identified certain markets to the west of us, to the sou th of us and the Latin American companies, and certainly worked with all the others, and we haven't closed our options .

I've used that term quite frequently. If you're in the selling and servicing game , you just don't close off all your options, but we have no intention at the present time to spend that kind of money. MR. EVANS: I'm glad to hear the minister make that statement because I agree with that position. We shouldn't spend that money . Dust one final question on this area , and that is: What is the plan for the forthcoming year in terms of participation in fairs and exhibits? There's usually a plan of action for the year ahead .

Without going into all the detai l, are there any major fairs or major exhibits that Manitoba will be participating in? There used to be, whether it be furniture or metal products or whatever. MR. JOHNSTON: Well, yes. I'm told and I was aware of this. We get applications from industries in Manitoba that would like to participate in different fairs that would be beneficial to their industry. I don't think the member was saying that the province goes in and parti. cipates in every fair because there's all kinds of different fairs for different products.

When we get a request from industry in Manitoba to participate in a fair, we have funds available to assist businesses to participate in the ~air and on the basis too that we want to see either them setting up, if they're a small company, have the ability, or through that fair to set up a selling organ ization or an agency throughout areas where they can sell their products, and we also get back from those companies a complete rundown of how many requests they had for products , etc .

But we as Manitoba don't really set up a Manitoba booth as such all that much, and I don 't want to be corrected here - well, let's just take a look at it - Manitoba participated in the Pipeline Show in Edmonton, Jun 1979 , will be, but that's Manitoba booth. Farm and Ranch Show, Edmonton, in March 1980, that's the plans at the present time for the Province of Manitoba. The other fairs that we work on are requests from industry. MR. EVANS: Well , fine . I don't want to really belabour it, but I gather there's really been no change in the policy in participating in exhibition and fairs.

In other words, we go in there, possibly get 'x' number of square feet, and presumably encourage some of our manufacturers, or whoever, to participate and they pay their own shot in bringing their merchandise there , and they have to have their people there, and so on . But we provide the space , and we say here's the Manitoba

section of that fair, and to that extent we are subsidizing or encouraging those would-be manufacturer-exporters. So really there's no change I gather, it's more or less the same procedure. MR. JOHNSTON: Yes, that's correct. The honourable member says no change. I'd like to say to him that the Department of Economic Development is one of a service department to industry in Manitoba. It's one of trying to identify areas where products that are manufactured Manitoba can be made and it's one of trying to attract manufacturers to Manitoba.

I think on those three basic points, I don't know how anybody in Manitoba could maybe disagree with our objectives in that point of view . I think probably we've identified certain industries . The member says that they were identified and have been identified before. We feel that right now we'll never be in a better position to advance it, and we can't lose the opportunity. I'd like to answer one question that had me concerned before the break about the Southam Business Publications $5,738 trade fair.

Southam sponsored the Western Canada Farm and Ranch Show in Edmonton, and our $5,738 was used - and I'm having trouble reading your writing John - we rented the space for provincial exhibit, the manufacturing staff exhibit provided the equipment, space approximately 3,500 feet, and we had six Manitoba industries involved in that space. That's what there was to Southam. MR. EVANS: Well, I didn 't ask that question , but that's fine, it's on the record and my colleague will read it. 3639

Thursday, May 3, 1979 MR. JOHNSTON: Yes, I know but I think it was a question that deserves an answer. MR. EVANS: Yes, well one, I keep on saying a final question - a final question , supplementary . Is there going to be an annual report of the Manitoba Trading Corporations? It seems to me by law there has to be a report published of the MTC, and is that report going to have some details as to some of the companies you 're working with , you know , so that one could read it without asking a lot of detail quest ions here, just to read it and get some idea of some of the things that are going on . MR.

JOHt~STON: The member hit me with something when he said by law. I'm informed that yes, it has to be done and .. . when fellows , when can we have it? - (Interjection )- It has to be produced three months after the end of the fiscal year , and it will be. MR. EVAINS: Will it include some data , apart from the financial statements , which are not really that interesting , I'm more interested in just the companies they 're working with and some of the possibiliti es, some of the developments and that sort of thing? And if it will , that's fine. MR. JOHINSTON: I'm told it will, Mr. Chairman. MR.

CHAIRMAN: OX1)- pass; (jX2)-pass ; (i)-pass - the Honourable Minister . MR. JOHNSTON: Mr. Chairman , I wonder if I could request a five-minute break . MR. CHAIRMAN: Committee agreed. We have a five-minute recess . MR. CHJliRMAN, Mr. Morris McGregor (Virden): Call the committee back to order . We 're discussin g (kX1) - the Membe r for Transcona . MR.

PARASIUK: . .. the synopsis of the Canada-Manitoba Industrial Agreement as the minister promised a couple of days ago, and in going through it I was wondering if the minister could, if he has that synopsis , if he has a copy of that synopsis , perhaps we could use that and go from it. On Pa~Je 1, you have Industrial Development and it says what the general objective is to accelerate the industrial development process and it indicates that the 1979-80 cost is $1 million , which with an amount being voted in unde r this item , and an amount being voted under the DREE Enabling Vote , I understand .

But what isn 't explained is what the actual expenditures will be, because it says no staff will be required. What will the expenditures be? What will this $1 million of expenditures be over the course of this coming fiscal year , or the present fiscal year? MR. JOHINSTON: I think what the member is asking, if I'm not wrong , he sees a figure of $1 ,002,000 , of which $841 ,000 is voted in the economic development appropriation. We're on Page 26 and if he would refer down to - there 's $6,000 ,012.00.

If he would refer to Note 1, it says an additional $1 ,061 ,000 included in the Canada-Manitoba Enabling Vote for the Canada-Manitoba Industrial Sub-AgrElement for the authorization of $7 million . Now the first figures he sees will add up to that $7 million figure ; the second figures he sees will add up to the $6 million. 0 him to Page 79; he'll find in the Canada-Manitoba Enabling Vote under Industrial Development Agreement , $1 ,061 ,000. So what we are saying is that in this program we have a figure that we can spend up to $1 ,002 ,000 .oo .

We have put in our vote what we really feel is very accurate of $841 ,000 , and we can draw from the appropr iat ion on Page 79 if we require more moneys . Now the program is designed in this particular one to accelerate industrial development process in food and beverage , in health , etc . In this one we would be involved in agreeme nts with industr ies to do research and studies as to the viabilit y of expansion or the viability of bringing a new industry in.

We a1'e not completely sure that we will spend that $1 million but we are relatively sure or very sure that we will come close , with what knowledge we have now , to the $841 ,000.00 . The Minister of Finance can 't use it anywhere but in the agreement , but we can draw on it if it's required . MR. PAFlASIUK: I understand how the enabling vote works , and to clarify something from the Minister , the $1 million , up to $1 million will be spent , really , on research and studies . This is applied work to determine whether you can get expansion .

There won 't be any grants , as such ; there won 't be ince ntive grants under this program . This is basically technical work. 3640 !.'

.. .. .. Thursday, May 3, 1979 MR. JOHNSTON: Yes. As 1 explained to the member earlier und er Enterprise Manitob a $5 million is forgiveable loans in this. Now , the Member for Brandon East mentioned a couple of days ago that research should be done , probably, to take a very close look at the expansion of the aerospace ind ustry in the Province of Manitoba. That' the type of thing that we would work with , on the basis of research to benefit the developm ent of that particular industry - it might be the food industry or some othe r industry - but it is not a grant as such .

It is used for research, for development of industry in the province. We have set up six Boards of business people in the sectors that we mention here to advise us, not make the decisions of spending money but to advise us as to whether this should be looked at or whether it shouldn 't, working with our people in the department. There is no grant in this approprittion. It will be done on the basis of moneys for research for expansion of industry in the province. MR. PARASIUK: Yes, I assume then, if you just go quickly to commercial development , it will be the same type of activity. MR. JOHNSTON: Yes. MR.

PARASIUK:

(3) Technology Centre. Just a quick comment on that? MR. JOHNSTON: Let me first say commercial development to accessed accelerating expansion and capabilities of rural communities, when we have - which we had from Swan River; which we've had from Russell; we 've had one from Dauphin; we've had one from Thompson; we have done one in Steinbach . This - and I don't want to divert - this program , it's 1979, but it did start in 1978, actually. The agreement you see here was signed April 21st, 1978. So we have done some under this, and this is what we expect to do this year .

And those are the group of people supervised by our staff and the people involved working in it, which I could give you, but are doing actual research with communities as to the best potential for expansion of businesses in those communities. MR. CHAIRMAN: The Member for Transcona. MR. JOHNSTON: I was going to carry on with (3). MR.

PARASIUK: Okay , I have looked at them, and, frankly, the synopsis is pretty thorough now and I can get an understanding of what's entailed in this agreement, and it brings to light the material that I read when the agreement was signed, and the explanatory material, so I don't want to really go into the specifics that much . It's late and I want to make a specific general statement and that is that this particular approach, by itself, was something that I think had been talked about before.

I can recall trying to negotiate the industrial infrastructure component, oh, about five, six years ago, as a replacement or a substitute for DREE incentives . And I think it's a very useful and worthwhile coonent of this overall agreement. I think that that component will probably be the most valu able . However , and this has to do with the Canada-Manitoba Industrial Sub-Agreement, and it reflects on the sour taste I have in my mouth towards DREE as a means of really promoting economic development in a region , in that the department itself , in my estimation , is a federal sop .

It's a federal sop to, in a sense , placate a region or a government for activity that it really won't do with res pect to fundamental policy areas like tariffs; with respect to fundamental areas like transportation; and w ith respect to the fundamental bias towards central Canada , of hhe federal Department of Industry and Commerce , and of institutions like the Export Development Corporation.

And I would invite the Minister to have his staff take a quick look over the background documents prepared by all western Premiers and submitted to the Prime Minister of Canada at the Weszern Economic Opportunities Conference in 1973 , because despite differences in political labels of the governments involved, there was a great degree of unanimity in terms of presenting the western case for economic development to the Prime Minister at that time. And the papers presented were the product ot a fair amount of homework done between the provinces.

I think it's the best co-operative effort that probably has taken place between provinces since Confederation on a topic like that. And, if you have the staff just give you a synopsis of some of the recommendations and have your staff go over the transcript of the proceedings ; you will find that time after time when items like freight rates came up, or items like tariffs came up, the federal Minister of Transportation didn't want to rock the boat. He would say, yes, but you know that would create difficulties with the rest of Canada if we brought about this bias in favour of western Canada.

They tended to talk about 3641

Thursday, May 3, 1979 a bias in favour of western Canada, in terms of promoting economic development, when in fact often what we were arguing about was removing a bias that existed against western Canada.

And tirne after time , Minister after Minister , was called forward and we talked about government purchasin9 and the fact that the Export Development Corporation really didn't spend very much money ; we talked about the Business Development Bank and the fact that it didn 't spend proportionately very much money in western Canada; we talked about Capital formation in western Canada ; we talked about possible changes to the Bank Act to try and force banks to free up more Capital for western Canadian development.

Time after time , very fundamental economic points were raised and each time the Prime Minister would sort of call on the federal Minister resp onsible for DREE at the time and say, well , I'm sure you 've got some problems ther e but maybe the Minister of DREE can find some money, in a sense , to tide you over. And I gues, to put it crassly, almost to buy you off . And despite the co-operation that you 're getting with the regional staff of DREE, who have a lot of knowledge of Manitoba , I still think that a $40 million program over five years really will not provide the catalyst.

It will provide something ; I'm not saying it won't provide anything, but it won 't provide the catalyst for real economic development in Manitoba. I think that some more fundamental things have to be tackled , and the reason why I raise them here - and I will be raising them in discussion on the budget , in the Budget Debate - is that we will not have economic developme nt in the type of federation we have right now unless some of the policies are changed to provide for more economic development in western Canada. Freight rates are a very impo rtant point ; tariffs were an important point.

The tendency to want to , in a sense , accommodate the growth of Quebec and Ontario with economic development in Quebec and Ontario, even though in many instances the raw resources aren 't there , and what western Canadian provinces were arguing is that you can't always bias things that way . If the resources are in western Canada maybe the processing has to take place . And because some of the examples are probably more glaring in other provinces I will use them, but I think they apply to Manitoba as well.

Alberta , which has petroleum , wants to really develop the petrochemical industry - and the Minister probably has heard this complaint from the Alberta Minister of Industry and Commerce - and they have had an incredibly difficult time with the federal govern ment in trying to do that. The federal government would like the petrochemical industry to be expanded in Sarnia, and there has been this tremendous conflict taking place , and I think that's part of the western alienation that exists right now .

And it's just not a political thing; it has to do with policies that exist in Ottawa which really, I think, tend to discriminate against economic development in western Canada . So, although something like this exists and it 's highlighted fairly significantly within this Minister's Estimates and within this department's Estimates - and I'm not saying you should say "no" to it. You have got it; there are some good components to it. I have objected to certain components and I have indicated my objections before .

This , to me, will not really provide for the type of economic development that I think we are capable of achieving in Manitoba and in western Canada . I think that we have to deal with other departments. And you see, unfortunately, although a Committee on Economic Development existed within the previous administration - and I see now that the provincial government here has created a Committee on Economic Development - the federal governme t really doesn 't have that type of counterpart.

It's quite easy for the Minister here to get a co nsensus from his fellow Ministers - and I would assume the Premier sits in on this Committee - and come up with an idea of where you want to go on a par ticu lar topic or a particular area. Then you have to go to Ottawa with some consensus and try and deal with that very badly fragmented system there , where often DREE isn't in agreement with the federal Department of Industry and Commerce , where often neither of those two departments are in agreement with the federal Department of Transport.

I don 't want to blame this Minister for the fact that Ottawa can 't get its house together and establish some type of coherent regional policies with respect to Economic Development , because they haven 't done so to date . But at the same time what I'm warning the Minister is don 't put all your eggs in this basket because this really, when you get right down to it, is a very small basket. It's a very small basket when you think of the different types of instruments that exist within the federal government to promote Economic Developmen t.

The seaway - there is just area after area where thi ngs could be changed to better accommodate and prov ide a catalyst for western economic development. The Minister , I think , has to keep attacking on those larger fronts . You don 't look a gift -horse in the mouth . You have negotia ted agreement. An agreement exists. But to the extent that you say, well , now we have economic development because of this , I think you will weaken the case that 1 think has to be made , not just can be made but has to be made, for changes in those other policies .

And in my remarks a couple of days ago I pointed out the fact that the Export Development Corporation really doesn 't have much of a hresence in Manitoba or in Saskatchewan , and really 3642 .·

Thursday, May 3, 1979 in Alberta . It has some presence in B.C. And it's B.C., Alberta and Ontar io who p ush at those major departments . They push very hard at Industry , Trade and Commerce. They push very hard and exert a lot of pressure on the Departmen t of External Affairs , Departm ent of Transp ort. They push those major departments , because they recognize that in terms of overall economic development , DREE isn't that importa nt to them. That's why Ontario has never really complained that much, because DREE hasn't been that operational in its jurisdiction .

It would scream bloody murder, however, if Industry, Trade and Commerce started paying much more attention to the western sectors of industry which showed promise, and possibly didn't pay as much attention to to say, Autopact. And all of these things in GATT, and I didn't raise this before, are trade-offs, and I think that traditionally, western interests have been traded off to eastern interests. This is an old complaint. But my point is that DREE, and DREE's program isn't sufficient compensation for the extent to which we've been traded off.

So I don 't want to belabour that point, I just make it, I think that the Minister has this particular program, it's got some weaknesses , it's got some strengths , especially the community infrastructure strength , I'm going to look forward to seeing what happens over the course of the next year. Obviously we're in a state of great uncertainty, and we've been in that state of uncertainty over the last complete year with respect to dealings with the federal government, because we've never known when there is going to be an election , and you never could really follow anything up systematically.

However, after May 22nd, there will be certainty one way or another and I will be much more demanding , I guess of the Minister in terms of what's happening in these other areas, like what's happening with the Export Development Corporation . What's happening with Transport , Federal Transport , and what's happening in those areas . I won't be that critical now , I'm just serving notice about those areas and I'll be raising them much more rigorously next year . MR. JOHNSTON: Mr.

Chairman, I would like to assure the member that the subsidiary agreement of Enterprise Manitoba is one that we have , it's $44 million over five years as he mentioned, but I would not like him to get the impression that that is the major thrust. It is a thrust but the major thrust of the department is in the Estimates that we've gone through to this date. You've mentioned transportation, you've mentioned the exports , you 've mentioned GATT , you've mentioned the economic development , which is being carried on by the department daily .

I, as the Minister, would not , at any time say that this subsidiary agreement is the economic development of the province of Manitoba . It's a tool that can be used within the department to do the job that we hope it will do, such as infrastructure, etc ., help stabilize communities in the rural area of Manitoba, help keep the population there and increase jobs in that area. When he mentions DREE, I've said the co-operation with DREE, and we have it, we use it, but there's one thing that the federal government seems to ignore .

We have tremendous co-operation with DREE and we have had, and I expect we will continue to while it's there, but while they say to us, here 's some dollars to help expand industry in Manitoba with DREE, on the other side of the fence, the federal government doesn 't say, we'll spend more money in Manitoba to help you support the businesses that we gave money to develop. And so you basically get down to that problem.

There is one area that is being recognized, but completely forgetting the other side when you get to the regional purchasing , regional economic development , regional R and D, transport, freight rates , export , the whole bit. So on the one hand , the federal government, I have to say, we have been working with very well in that area . But on the other hand , when you say to them , as the member says, are you going to purchase from the company you put money in to build, it doesn't happen, as the honourable member knows, it doesn't happen as much as it should .

So I can assure you that the department is recognizing that and will continue to press. When we attended the Ministers' meeting , the Industry Ministers' meeting, we had a communique representing the needs for recognizing regional problems throughout this province. I am not here to be critical of my counterparts in Quebec or Ontario, but they come back and say, you know, you 'd be making a very great mistake if you reduce or harm that industrial belt that is so valuable. We keep coming back with the argument , that no, that's not the case .

You're wasting your money if you 're going to give it here and not follow through with the whole thing . So I'd like to assure the honourable member that we've, eleven times , communiqued and argued with them that these things have to be done. I don 't know what really more 1 can say, other than I appreciate the member's comments and I think he's saying to me, in six or eight months from now, he's going to be looking at it . I guess I'm going to say, I accept the challenge and hope 1 can satisfy him . I know if I don't, I'll hear from him . But we recognize that that's the position it's been in.

I think you mentioned the Sarnia situation where Alberta all of a sudden said , enough of this, it'll be processed here, you won 't get it type of thing . We haven 't got the same whack . We have a power but we certainly have resources in Manitoba and we want them to recognize 3643

Thursday, May 3, 1979 it. There's no question about it. MR. CHAIRMAN: The Member for Brandon East. MR. EVANIS: I don't want to belabour the particular

section at any great length. There 's a lot of interesting developments that could come out of the agreement , particularly with regard to the food products centre and the industrial technology centre, and when we were talking earlier this evening about more R and D being done in Manitoba, of course this is where it can happen . This does provide moneys for that sort of thing to happen . The real trick of course , is to go from the applied research, the applied development and to make it commercially applicable in the province .

In other words, it's fine to develop a new food process , a new type of canning or some difference in taking a particular food and being able to process it in a certain way, that 's fine but the real trick is to say, okay , can we commercially produce this in Manitoba, because that 's the bottom line, so to speak. Can we make some jobs , can we get some jobs out of this. But you know , nothing ventured , nothing gained. And the food products development centre , as the Minister knows , is an extension of something that was started a few years back with the Department of Industry , Trade and Commerce .

It was a few hundred thousand dollars , I was disappointed , it goes back to 1973 when we first got some money , first indication from the feds that they would be prepared to put some mone y into a Canadian - it was called a Canadian food products development centre . And this was supposed to be the centre for Canada. But the amount of money was really , in my estimation , a joke , if it was really and truly to be a Canadian food products technology centre .

To that extent, I share the comments of my colleague from Transcona , that in many , many ways, Manitoba is deserving of a better deal from the federal government.

The fact is that a lot of the things that will happen here , a lot of the developments that will occur in Manitoba are dependent on federa l policies, whether they be transportation policies , whether it's water or air or rail , whether it be the tariff policies, whether it be the policies of supply and services where that's the major purchasing department - you know they all have a great impact , and I believe that we have not had our fair share , fair share of positive attention by Ottawa for many a year . There are always examples you can bring up.

The federal government can always say, well look, we built a hangar for you over at the Winnipeg International Airport , or we've done this or that. They had Operation Access . I'd like to ask the Minister, has the Department of Supply and Services recently, or the Department of Small Business of Ottawa recently offered to have another big seminar that would bring a lot of people in to again push the possibility of selling more Manitoba products to Ottawa? MR. JOHIIISTON: Well , it certainly hasn 't come to my desk, and I'm informed by my officials that it hasn't come before us before October.

They have not made any approach to do anything like that again. I won't say they won 't, but they haven 't made any approach to us at the present time . The member touched on a little bit, not just a little but , but the enterprise development centres in Winnipeg and the one in Portage Ia Prairie . I have said , and I would say it to you that I don't want to see anybody in, well , I guess I've said white coats , standing around working on something that's going to take 20 years to develop .

These particular enterprise centres , if somebody has a product and they have to weld those two pieces together to make it a viable product and a saleable product, that we feel is something that's of benefit to Man itoba , we want to have the expertise to help them do that. But research, as such, we haven 't gone into in these centres. That 's what the centres are basically for .

Porta~Je Ia Prairie - when you mention the food industry , the food industry people , when we bring people to it that are in the food industry that haven 't seen it and see the equipment in the small building we have now, they 're very excited about it and want to use it, and the expansion of it is being done. And we've had the opportunity to expand it with 60 percent federal dollars, and that's really the way we're going. So I've mentioned that that the member mentioned and I would say to him , no, we haven't had anything from the federal government by way of another one of those seminars . MR.

EVANS: The reason that I asked is because in reading today 's issue of the Globe and Mail Report on Business , Thursday , May 3rd , here , lo and behold on Page BS, is an advertisement by Mr. Tony Abbott , Minister of State for Small Business , Department of Supply and Services in association with the Small Business Secretariat , invites industrial representatives and small business to attend a seminar on subcontracting opportunities , and the day is to be spent at the downtown Holiday Inn in Toronto where there are different business people , different members of the 3644 .. ..

Thursday, May 3, 1979 of Supply and Services, I guess more or less telling those people how they can sell. I guess you can 't knock them, but the fact is that they need to do more of this in Winnipeg . Toronto, they're already in there . They 're close geographically to Ottawa, a coulle of hundred miles . They're in the industrial heartland and so on. And it seems to me, my colleague from Transcona has said, it's true that there hasn 't been enough attention paid by these other departments. DREE, yes, everything is left on the shoulders of DREE.

If you want regional economic expansion, it's always DREE, DREE, DREE. Trudeau talks about DREE, the other federal ministers talk about DREE. That's always the solution, always the out, whether it's a transportation problem, we'll solve it with DREE. If it's a tariff discrimination problem, we'll solve it with DREE. And the fact is that that isn't good enough, and there has to be better co-ordination .

I'm not saying hhat we, in Manitoba, shouldn 't help ourselves , because I believe in theoold adage, God helps those who help themselves, but you know , we do have a federal government and it does have a lot of spending power and really, in my view , if they were very serious about regional economic balance in Canada, proper economic growth in a balanced way , that is not allowing areas to lag .behind unnecessarily , provid ing opportunities, let's say, for Manitobans so they can live and work in Manitoba , then we need to have a greater commitment from whoever is in government in Ottawa with regard to buying goods made in Manitoba , and with regard to transportation policies and so on.

I don't want to be repetitious, but I mentioned the aerospace industry and I also mentioned other forms of transportation equipment. Those two areas alone are greatly dependent on federal government policy. Railway Equipment: You know they're spending millions of dollars, tens and hundreds of millions of dollars on railway equipment. It would seem to me that a decision could be made to have a lot of that done in the Canadian National or the Canadian Pacific Shops here, or some other associated company . And aerospace, as we know, we have the basis of a good aerospace industry.

But that, to a large extent, is dependent on federal government policy and I would hope that in the future we can be more successful in pursuading the powers that be in Ottawa to pay more attention to this area. Because the fact is, you see, we're not advocating that they spend more money; all we're advocating is that they redirect the money, because they 're going to spend it anyway . They 're spending millions of dollars on those hopper cars and they're going to be spending a lot of money on that military aircraft. They 're going to spend it, eh?

So we want not just our fair share , we need more than a fair share to over-balance, to somewhat outweigh! the already overly-centralized industrialization of Canada that has developed historically in the provinces of Ontario and Quebec. Just one final question that I have, Mr. Chairman , unless the Minister wanted to say something. I just have one specific question regarding MR. JOHNSTON: No, go ahead . MR. EVANS: With regard to Brandon . This is Item 5 on the sheet that you distributed , the Enterprise Development Centre in Brandon. There is an estimated 1979-80 cost of $376,700 , six staff required, and so on.

The total cost over five years 1.7. I gather that this is along the lines of what we were talking about previously for Dauphin and then maybe some day for Brandon . These are the incubation centres that they have tried, to some extent, I think, with success in Prince Edward Island. And where you have a certain amount of space, where you have technical staff available on-site , and that new enterprises or possibly expanding small enterprises can come in, get relatively cheap rent and free technical services, and presumably develop in this incubation centre.

And at some point , presumably , if they develop successfully , at some point, then that they leave, making room for some other enterprise to come in. So my question is: (

a) Is my description of it a correct one, and if it isn't I'd like to be advised and, secondly, just exactly where does this Enterprise Development Centre stand now? Where is it now? Has the building been acquired, space been rented yet? Just what is the degree of progress in this particular item? MR. JOHNSTON: The member is correct. It's the same principle being used in Dauphin to be used in Brandon, and we hope to have one in Winnipeg. Well, we will have one in Winnipeg.

Where it stand in Brandon at the present time: We have invited proposals from builders or developers to present us with a building that would be suitable for this operation, and they would own it and we would rent the space on a five-year lease basis . It would be five years because that's all we will go to because that's the length of the agreement at the present time . Hopefully , it will carry on, but we can't commit ourselves at the present time to any more . .

The tenders will be opened on May 17th , under the guidance of the local Board that has been set up to work with us, and it is the same principle as we have in Dauphin at the present time . 3645

Thursday, May 3, 1979 MR. EVANS: Have there been any applications or firm enquiries made to the local Board from local entrepreneurs who may wish to use these facilities . And if the answer is " yes", what sort of enterprises are interested in coming into this facility? MR. JOHNSTON: We have announced the program, as the member knows I did in Brandon, and we have ad definite express ion of interest from different industr .ies. We haven 't got any firm applications at the present time.

You know , when we know when the building will be there we intend to make it known again that that's available for this type of an operation . We have had a fellow graduating . . . It seems funny to be talking about graduating industries but we've got a fellow graduating in Dauphin at the present time , where he is now paying the economic rent. One of our problems is that if we move him out tomorrow he might be out of business for a month . We've got to find some place for him to go in that area , where he can operate , and we still won't leave him completely on his own .

He will still have the access to some management consulting, but he is doing well on his own . Firm applications we don 't have for Brandon , as yet , but the Board has been pressing me. We have advertised , I might say, for a manager for that centre in Brandon . I know we have advertised through the Civil Service . It's on the boards at the present time . We're expecting to have the proposals by the 17th and a manager in place when we're ready to go . We would hire the manager even before the building opens up, so that he could start to do spade work , work in the area and look at applications with the Board .

MR. EVANS: Well , that's fine . I don 't want to belabour this , but it occurred to me why, because it's a five-year agreement , why would the department not want to hire the staff on a contract basis? Because it seems you've got more flexibility. It's like you are operating your own private business . I mean , you've got a lot more flexibility than hiring people under the Civil Service Commission . MR. JOHNSTON: It's a term basis, but we have to advertise it . Yes, it's a term basis. MR.

EVANIS: Yes, and I just assumed , because I see Peter Letkeman as one of the members of the Board ; no , or is he with the Research Council? I just assume there will be the maximum possible co-operation or hopeful co-ordination with the University of Brandon and the Assiniboine Community College, where there are a lot of technical services and ability and talent available, I think , which could be of some assista nce here. MR. JOHNSTON: Absolutely , very definitely . As I said , we want to work with those people, to get them involved . MR.

CHAIRMAN: 2.(k)(1)-pass; 2.(k)(2)-pass ; 2.(k)(3)-pass - the Honourable Minister. MR. JOHNSTON: Well , just let me say this : I have made a commitment for a list of memberships. The Member for St. Johns hasn 't been here , but I will see that he has them . A statement on the principle of confidentialit y, the Manitoba Bureau of Statistics material to be read for the Member for Elmwood. Advertising costs for 1976-77 published in the Public Accounts was $58 ,000 .00. Exports for the last three years, major products , for the Member for Brando n East, we will see that you have that .

And new jobs in manufacturing , 1978 calendar , and first quarter 1979, the Member for Brandon East , we will have that for him, too . I'd like to say, Mr. Chairman , that I'd like to thank all the honourable members and the staff for the time put in. 1 would like to say that the Member for Brandon East says " God help those who help themselves ", he is sounding more like a Conservative every day , and we appreciate that very much . 1 would like to say also that we can talk about the federal government's assistanc e as much as we like but we have to keep doing things in Manitoba .

And I would only ask that all of us, every time we seem to have criticism of Manitoba, it seems to come from our neighbours that live here , or your neighbours that live here, and we seem to be the greatest people in the world for downgrad ing ourselves , and I don 't think there is any need to. I think that we can move beneficially for all of Manitoba at the present time . So , again , thank you very much . And if you pass 37, Mr .

Chairman , 1 am going to move Committee rise because my Housing staff isn't here and the Member for Transcona , who is the critic , has kindly said we won 't go in tomorrow morning , because I have an obligation tomorrow morning and we will probably go in tomorrow afternoon at two-thirty . 3646

Thursday, May 3, 1979 MR. CHAIRMAN: The Member for St. Vital. MR. WALDING: Thank you, Mr. Chairman. I have been waiting to get onto MHRC because I had a few questions for the Minister . My questions had to do with the insurance aspect of MHRC properties. 1 wonder if the Minister will have this information with him tomorrow , so that he wou ld be able to answer any detailed questions . MR. JOHNSTON: Yes. Thank you, thank you for telling me. We will see that the information is there. ~ MR.

CHAIRMAN: Resolved that there be granted to Her Majesty a sum not exceeding $8,801,500 for Economic Development operations- -pass . Committee rise. SUPPLY - NORTHERN AFFAIRS MR. CHAIRMAN: I would direct the honourable members' attention to Page 74 of the Main Estimates, Resolution 100: Executive . Clause (

b) Salaries and Wages - pass - the Honourable Member for Ste. Rose. MR. A. R. (Pete) ADAM: Thank you, Mr. Chairman. I just wanted to make a few comments before we moved on into the Estimates. There are a number of communities in my constituency, which are in the boundaries of the Northern Affairs. There are three reserves in the constituency, as well as, I believe, four or five communities that are under the jurisdiction of Northern Affairs .

I've listened to my colleague, the Member for The Pas and the Member for Rupertsland , and they, I believe, have very articulately expressed the situation that prevails pretty well throughout the rural Northern Affairs communities. I also want to put on the record what I believe is a situation in the Northern Affairs communities in my constituency, and it's pretty well as indicated by the two previous speakers on our side.

I have spoken to two or three of the councils, and there seems to be a malaise of - actually I don 't know whether it's malaise because of what 's being done, or rather that nothing is being done . I think that is the major concern - well , the way it was expressed to me, when I spoke to two of the councils in my area, was that absolutely nothing was going on and everything was dead. And I believe this is unfortunate, because this has gone on for too many years that nothing has gone on in the north .

The main objection of what was happening in the north was that white people were coming in and telling the natives and the remote communities what was good for them, and this has been going on during the time of the Hudson Bay Company, for two or three hundred years, and it went on after government was formed and since Confederation. This has been what has been happening in the north. There is always some outsider coming in.

First of all, it was the fellow that came down with the $2 bills, the Indian agent, came down once a year and passed out $2 bills at $5 a head, and this, by treaty signed during the time of Queen Victoria, treaties that have been broken systematically and disregarded, broken time and time and again . This is a situation that we found in 1969, the same situation prevailing throughout the rural communities. People coming in, whenever they did go in, there were hardly any programs, but very little was happening in the north. I can speak from experience, because I was raised at a place called Crane River.

Just across the river from an Indian reserve, and some of my best friends - I was raised with native people; some of my best friends are of native ancestry, and I regard them very highly as friends, and 1 have very high respect for them.

I've got to know their way of life and the hardships that they had to cope with in regard to the trapping, the fishing, a diminishing trapping industry, a diminishing fishing industry that had diminished to an extent many years gone by, perhaps even before the time of the Selkirk Settlers , which was the reason why the Hudson Bay encouraged immigratoon and colonization of the Red River community. But we found not much change in 1969 and I believe there was a most ardent effort to try and change that situation from going in and telling local people what's good for them, what will solve their problems.

We tried to change the way of dealing with these remote communities by giving them more say in their affairs. There had been some sort of local advisory committees that had actually no power , even at the local level, they acted - and I speak now in the LGDs, such as Alonza and in the Interlake country, in southern Manitoba, many areas where there were LGDs and in Northern Affairs they did have some kind of advisory committees at a later date. But in the LGDs we found - which was a bit similar to what was in place in the Northern Affairs but they had really no power .

Document details

Collection	Manitoba — Debates (Hansard)
Citation	31-3-53b
Type	hansard
Volume / chapter	31st 3rd hansardpdf 53b.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	7b3de161ffc8f70bda8ee44a3de1ed6f94a048f4

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